[Congressional Record Volume 143, Number 157 (Sunday, November 9, 1997)]
[Extensions of Remarks]
[Pages E2276-E2277]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 THE WORKING AMERICAN'S TAX RELIEF ACT

                                 ______
                                 

                            HON. MAX SANDLIN

                                of texas

                    in the house of representatives

                       Saturday, November 8, 1997

  Mr. SANDLIN. Mr. Speaker, I rise today to introduce legislation to 
improve take home pay and reduce taxes for every working American 
earning a paycheck. The bill, titled the Working American's Tax Relief 
Act, allows taxpayers to deduct from their taxable income that portion 
of their income withheld for payroll taxes.
  The economic report of the Census Bureau this fall had good news for 
many Americans. The economy is growing, median income rose for the 
second straight year, unemployment is low, and welfare rolls are 
dropping.
  However, the working families and small businesses of America are not 
reaping the rewards of our recent prosperity. Average wages for full-
time male workers fell last year, and median income has not fully 
rebounded since the last recession, leaving the living standard of a 
typical family below 1989 levels. For the 60 percent of American 
households in the lower- and middle-income brackets, the situation is 
even more grim. Real income for these families has fallen for the past 
7 years.
  Mr. Speaker, this is why people seem to be working harder and longer 
and not getting ahead. This is why Americans working a 40-hour week 
struggle to make ends meet. There were many good provisions in the 
Taxpayer Relief Act of 1997, and I supported the bill. However, the 
Working Americans Tax Relief Act builds on our success and offers much 
needed tax relief to every American bringing home a paycheck.
  Including both the employee and employer contribution, over 70 
percent of Americans pay more in payroll taxes than in Federal income 
tax. Even worse, the burden of this tax falls most heavily on the over 
90 percent of Americans who earn $65,400 or less. Working, middle-class 
Americans earning up to $65,400 a year pay a combined 15.3 percent of 
their income to fund the Social Security and Medicare programs. For 
taxpayers earning more than that, every dollar earned over $65,400 is 
earned payroll tax free. Small businesses pay this tax regardless of 
the profits they make in a year, and for many small businesses payroll 
taxes have become the greatest tax burden. Small business owners and 
employees need relief from the tax. I am not proposing to change the 
structure of payroll taxes in America, but I am proposing to make the 
burden of the tax easier to bear.
  American taxpayers currently pay income taxes on the portion of their 
income withheld from their paychecks for payroll taxes. Compounding the 
injustice of this tax is the fact that many of these taxpayers will 
again pay taxes on this income when they receive it back in the form of 
Social Security benefits after retirement. To eliminate this double 
taxation and offer the average American worker over $1,000 in tax 
savings, my bill grants all workers, including the self employed, a 
deduction from taxable income equal to the amount of that worker's 
payroll taxes.

[[Page E2277]]

  I urge my colleagues on both sides of the aisle to join me in 
supporting legislation to end double taxation of income and offer real 
tax relief for middle-class Americans and small businesses.

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