[Congressional Record Volume 143, Number 105 (Wednesday, July 23, 1997)]
[Senate]
[Pages S7886-S7888]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                TAX CUTS

  Mr. GRAMS. Mr. President, I come to the floor this morning after 
hearing some of my colleagues earlier talking and debating about the 
proposed tax cuts that is now in conference. The question is always: 
Who qualifies for the tax cut? How much is that tax cut going to be? 
Who is going to receive what share of that tax cut?
  I would like to start out by saying that it is kind of ironic to hear 
some on the floor arguing about these tax cut packages because these 
are the same individuals who, along with President Clinton, just 4 
years ago were on this floor arguing for the largest tax increase on 
Americans in history.
  When we look at this major tax increase of just 4 years ago, I would 
like to relate to the comments made by the minority leader, the Senator 
from South Dakota, earlier this week when he argued that the $77 
billion tax cut was not fair. That is what we have heard here this 
morning on the floor--it is not fair. While I don't believe it was fair 
in 1993 to raise the largest tax increase in history on Americans, they 
say, ``Well, it was only aimed at the rich.'' But let me tell you.
  Let me remind my colleagues what happened in 1993. After campaigning 
on middle-class tax relief in 1993, President Clinton turned around and 
then raised taxes by $263 billion, again making that the largest tax 
increase in history. But he said it was only for the rich. But 
everybody paid more, including $114 billion in new income taxes, $24 
billion in new gasoline taxes, $35 billion in new business taxes, and 
$30 billion in new payroll taxes. Then you add on top of that nearly 
$25 billion more in Social Security taxes. In other words, if you work, 
if you are retired, if you drove a car, if you owned a business, or if 
you paid any kind of income tax, you paid for the 1993 income tax 
increase.
  I heard also this morning that what we are talking about today in 
this tax package is that about $77 billion so far of net tax relief is 
``substantial'' tax relief. Well, when you get back only $1 on every $4 
that was raised in 1993, I don't call this ``substantial.'' This is a 
meager tax package that we are talking about. The reason that it is not 
fair, in my opinion, is because there is not enough in this tax package 
to go around.
  It does not take a mathematician also to calculate that if taxes 
raised were $263 billion 4 years ago and you get $77 billion back now, 
that is not a good deal. If you look at since the tax reduction that 
everybody blames for the deficits, and that is the Ronald Reagan tax 
cut in 1981, they say since that tax cut it has resulted in all these 
deficits: We have these deficits today because of the Ronald Reagan tax 
cut. In fact, we have had 10 tax increases since 1981--10, over $850 
billion in new tax increases since 1981. And now we are talking about 
$77 billion. This is less than $1 on every $10 of tax increases over 
the last 10 years.
  We also hear about, well, who is going to be getting these tax 
breaks?

[[Page S7887]]

 The top 20 percent, they say, are going to get over 60 percent of the 
tax cut. And as we just heard the Senator from Texas say, the top 20 
percent of wage earners in this country, which is $60,000 and over--and 
most people do not consider making $60,000 rich, but they pay 80 
percent of income taxes in this country today.
  I also heard about a couple of instances--and I did not have time 
this morning to bring to the floor pictures of families, but let me 
read a couple that were mentioned here today. They showed pictures of a 
young family making about $25,000 a year, and they said under the 
Republican tax plan they were going to get no tax cut this year. But 
for that family making $25,000 a year, they pay total, with two 
children, about $3,000 in income taxes and payroll taxes, but they 
receive $1,100 in EITC. EITC, that is earned income tax credit, an 
earned income tax credit that was passed in 1986, increased in 1993. So 
this family making $25,000 a year does receive a tax refund, a tax 
refund of $1,100, not zero but $1,100.
  What they want to do is to add to that. Now, I will talk about that 
later. They also spoke about and had the pictures of a young family 
making $20,000 a year, and they said, under the Republican plan, they 
would get no tax refunds this year. But in fact that family making 
$20,000 a year will pay this year about $1,800 in payroll and income 
taxes, but they will receive a refund under EITC of over $2,150. So 
that family, granted, a hard-working middle-class family, but they are 
receiving some tax relief under the current system.
  Let us go to the family making $31,000 a year. Say the husband is 
making $9 an hour, the wife $6, or vice versa, they are working 40 
hours a week trying to raise a family of two children, have to pay 
child care, et cetera. And what does this family get? They are going to 
pay this year about $4,300 in payroll and income taxes and they receive 
zero under EITC. Now, those two children will not get, under this plan, 
any tax relief if they are 13 or 14 years old. So who is not getting 
the relief here?
  And when they talk about making it fair, we do want to make this 
fair, but we want to make sure that those families making $31,000 to 
$60,000 a year are also going to join and also receive some kind of tax 
relief today.
  Now, I would like to see every family get a $500 per child tax credit 
refund. That would be great. But if we are going to talk about fairness 
what we are going to have to do is make this pie larger. The $77 
billion is not enough to make sure that all families will enjoy some 
kind of tax relief. Now, if we want to start talking about class 
warfare, and that is what we hear in the Chamber all the time, that is, 
we are going to give it to the rich but not the poor, that is not true. 
We want to make sure that all families are going to get some kind of 
tax relief.
  So along with the tax relief already in the system under the earned 
income credit, we also need to expand that so other working families 
also are going to receive some kind of tax relief this year. Everybody 
needs to share, not only the low income but also middle-income working 
families. If my colleagues are serious, let us enlarge the tax cut.
  When we talk about the $77 billion that is in this package, if you 
want to spread that over what this economy is going to generate over 
the next 5 years, a $7 or $8 trillion a year economy and we are saying, 
well, we are going to have this substantial tax package, it would be 
comparable to looking for a new car and the car dealer said, well, this 
is the sticker price, but I am going to take a penny off from that and 
I am going to make you a real deal on this car.
  That is exactly about what the $77 billion is equal to when you put 
it into context of what this economy is going to do over the next 5 
years. You are going to get a penny back on the purchase of a new car. 
So what makes the entire debate over what is fair and equitable in this 
tax relief package so ridiculous is that Washington is not willing to 
give up more of the money.
  So I just wanted to come to the floor and talk a little bit about how 
we do not want to make this a class warfare issue, that we want to make 
sure all Americans receive some kind of tax relief. And again, as I 
said, since 1981, American families have seen their taxes go up 10 
times--$850 billion in new tax increases in the last 16 years. Now we 
are talking about tax relief, and we want to make sure that tax relief 
is fair and it is broad based, and that those families making between 
$30,000 and $60,000 a year will also have an opportunity to share in 
some reduction in their tax burden.

  I thank the Chair. I yield the floor.
  The PRESIDING OFFICER (Mr. Smith of Oregon). The Senator from 
Georgia.
  Mr. COVERDELL. Mr. President, I rise in part to join my colleagues' 
reflections on what we heard this morning from the other side of the 
aisle and what we have been hearing basically as a definitional 
exercise from the White House in their attempts to define the 
congressional tax relief proposal and the congressional balanced budget 
act proposal.
  I am encouraged in that it does appear we are making very rapid 
progress with regard to these two historic bills--a balanced budget 
act, which if signed by the President will be the first time in about 
30 years, and the tax relief act, which if signed by the President 
would be the first in over a decade and a half. And, as has been noted 
here this morning, that following massive tax increases over the last 
10 years.
  To put this in some sort of historical perspective, I have only been 
here a short period of time, as has the Presiding Officer, and it has 
been a rather dramatic 4 years. Half the time was under the 
congressional leadership of the other side and half the time has been 
under our side, 2 years each, and they make an interesting comparison.
  In the first 2 years under their side, we fought and lost the largest 
tax increase in American history. I remember the night very vividly. 
The Chair of the evening was Vice President Gore, who cast the vote to 
secure the victory for this huge tax increase, which was characterized 
by the Senator from Minnesota. The following year was spent, Mr. 
President, defending the Nation from Government-run health care which 
would have been the single largest expansion of Government in the 
history of the world. It would have surpassed the size of Social 
Security in 24 months, become the largest entitlement in the history of 
the world.
  Well, the American people prevailed and by the narrowest of margins 
that was defeated.
  So those 2 years were filled with large tax increases, large 
expansion of Government, and the view that Government was the ultimate 
solution and resolution to all America's needs and woes.
  Now we come to the last 2 years. The leadership changed, and the 
discussion has been about balancing our budget, lowering the economic 
burden on American workers and families and restraining the size and 
growth of the Federal Government. And we are making progress, because 
we now have a President who has said the era of big Government is over 
and he has said he wants to support a balanced budget act and a tax 
relief act. And we have agreed on the general premises. We are getting 
very close now to crossing the ``t'' and dotting the ``i.''

  I hope the President will come forward in a spirit of cooperation 
that was exemplified by what happened on these measures in the U.S. 
Senate. To watch the leadership of both parties vote for a balanced 
budget act and a tax relief act, to watch the leadership of the 
committees of jurisdiction on both sides, the Finance Committee and the 
Budget Committee, all vote for the balanced budget act and the tax 
relief act, and then, in almost unprecedented behavior, to have 73 of 
our 100 colleagues vote for the Balanced Budget Act and 80 join hands 
and vote for the Tax Relief Act--in all this debate about whether or 
not it is a fair form of tax relief, I would suggest the empirical 
evidence that it is is the fact that the leadership of both parties in 
the Senate and that 80 Members of the Senate could vote for this 
substantive piece of policy. It is just inconceivable, given that 
bipartisan, broad, huge majority, that the legislation could be 
anything less than fair. It almost demonstrates its broad nature and 
evenhandedness, to secure that kind of support. The President should 
take note of this.
  The country needs to balance its budgets and American workers need 
relief. An average family in my State,

[[Page S7888]]

and I would say across the country, makes in the range of $40,000, 
often with both parents working, and after they pay their direct taxes 
and their cost of Government and their share of higher interest rates 
because of the huge national debt, because we have not had balanced 
budgets, they have barely half of their paychecks left to provide for 
their families. If the Founding Fathers were here today and discovered 
that Government in America had come to the point that it was taking 
over half the wealth of our workers away from them, they would be 
stunned. And I think they would be angered.
  What this boils down to is that we are taking about $8,000 a year out 
of every average family's checking account, and we are making it very 
difficult for them to provide their fundamental responsibilities, which 
are getting the country up in the morning and raising it and getting it 
ready for stewardship. They can barely get that done because of 
Government policy removing those resources. This legislation goes in 
the right direction. It does not go as far as it should, I agree with 
the Senator from Minnesota, but it goes in the right direction. It 
equates to a refund of that last tax increase of about a third of it. 
We tried to refund all of it last year, but the President vetoed that. 
So he has now agreed to refunding about a third of it, and that is good 
policy. I am very hopeful that the White House will not politicize, 
``partisanize,'' seek political gain and advantage over this policy for 
which so many on both sides of the aisle have come to agree in the 
Congress.
  This is the right thing to do for America, and this is the time to do 
it.
  The PRESIDING OFFICER (Mr. Smith of Oregon). The Senator from 
Kentucky.

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