[Congressional Record Volume 144, Number 5 (Tuesday, February 3, 1998)]
[Extensions of Remarks]
[Pages E82-E83]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




THE MIDDLE CLASS TAX RELIEF ACT OF 1998 AND THE TAXPAYER CHOICE ACT OF 
                                  1998

                                 ______
                                 

                           HON. JOHN R. THUNE

                            of south dakota

                    in the house of representatives

                       Tuesday, February 3, 1998

  Mr. THUNE. Mr. Speaker, in 1994, the American public spoke loudly and 
clearly about their dissatisfaction with the direction Washington was 
headed. Their voice came in the form of an historic change of control 
in both the House and Senate from the Democratic, to the Republic 
Party. It was that election that brought the President to proclaim in 
his State of the Union in 1995 that the era of big government was over. 
But for how long?
  It seems clear here in 1998 that he would like to bring that era 
back. In his State of the Union address, the President outlined his 
policy goals. Now that his budget is out, we know his ideas translate 
into some $150 billion in new Washington spending. Most of us can agree 
with his goals. They include important priorities like caring for and 
educating our children, to providing health care for an aging 
population. These are important issues. On that we all agree.
  However, the differences are clear in trying to determine how best to 
achieve those goals--particularly in the context of a potential revenue 
surplus. The President's programs mark an incredibly expansive reach by 
the federal government into the lives of Americans. At the same time, 
he seems remarkably inconsistent as he refers to reserving a potential 
surplus for Social Security, while on the other hand talking about 
increasing the size and reach of government by $150 billion in new 
Washington spending and bigger government. While I agree Congress must 
begin to restore the Social Security Trust Fund, the juxtaposition of 
saving and spending sends mixed signals to me and to the American 
public.
  I believe there is a responsible public policy approach to dealing 
with any potential surplus. Accordingly, I am cosponsoring Congressman 
Mark Neumann's H.R. 2191, the National Debt Repayment Act, which is 
consistent with a number of important policy objectives. The Neumann 
legislation would apportion any potential surplus in three ways. First, 
it would allocate two thirds of any surplus to paying off debt and 
restoring the various federal trust funds--including Social Security, 
transportation and environmental trust funds. The final third would go 
toward reducing taxes on hard working Americans.
  H.R. 2191 further puts into place a systematic plan to completely 
retire our $5.5 trillion debt over the next 30 years. The plan 
establishes that spending be 1 percent less than the government 
collects in revenue every year and applying that 1 percent surplus to 
paying down debt. Assuming moderate economic growth rates, we can be 
completely debt free by 2026. In addition to winning the war on drugs, 
that would be the most important thing we could do for our children and 
grandchildren. Paying down the debt also would free up the nearly $250 
billion Congress appropriates every year just to pay interest on our 
$5.5 trillion debt.
  Moreover, the National Debt Repayment Act would allow us to actually 
give something back to the taxpayers of this country. After all, it is 
their money.
  The plan certainly seems reasonable. If the President is able to 
build $150 billion in new Washington spending into his budget, it would 
necessarily follow that Congress and the President could give that 
money back to the taxpayers. The best solution to helping working 
families deal with tough issues like child care is to let them keep 
more of what they earn, and allow them to choose how to address this 
important need. The President's proposal tends toward employing Uncle 
Sam as your children's nanny. His plan would have Washington determine 
which children and which child care providers receive Washington's 
assistance. Who would you rather have raising your kids, the federal 
government or the American family? The answer seems easy to me.

  If you give some inside the Beltway long enough, they try to create a 
risk free society. They would have the government guarantee child care, 
education, health care, jobs, income, retirement, and big screen 
televisions. But the cost will be high. There will be a corresponding 
decrease in freedom and more and more taxes to pay for all that so-
called security.
  There is a better way, and that is to say to the people of this 
country: We trust your judgement. We believe you are capable of caring 
for your children and making good decisions about their future. We 
believe that as a matter of principle, America is infinitely better off 
when families are making decisions rather than bureaucrats. In the same 
way we believe that America is infinitely better off when parents are 
teaching values rather than bureaucrats.
  The president was clear in his State of the Union address how he 
feels about tax relief. He wants relief targeted. I find that 
troubling. Why? Because targeted tax relief creates winners and losers. 
Every tax break he mentioned is targeted. However, we should strive 
toward a more perfect union by looking for ways to allow all 
Americans--irrespective of marital status, age, or heritage--to 
participate in the benefits of the greater freedom that comes with 
lower taxes. We should strive to make all taxpayers equal under the 
law.
  Furthermore, we should take a consistent approach to making the tax 
code simpler. Too many relief proposals further complicate the tax 
code. Such efforts do not take us down the road toward making 
government less intrusive and more user friendly.
  For these reasons, I am proud my friend from Washington, 
Congresswoman Jennifer Dunn, has joined me in introducing two pieces of 
tax relief legislation that I believe will serve as alternatives to the 
new Washington spending in the President's budget. At the same time, 
these bills are consistent with the dual goals of distributing tax 
relief in a broad and even fashion, while not adding to an inordinately 
complicated tax code.
  Both Democrats and Republicans in Congress that sincerely want to 
lower the tax burden on working families should be 100 percent behind 
these two bills. The bills do not target behavior and do not contain 
gimmickry or loopholes. The bills represent plain and simple common 
sense. The first bill addresses the issue of bracket creep by allowing 
working Americans to make more money before they fall into the higher 
tax bracket. It lowers taxes by raising the income threshold at which 
the 28 percent tax bracket would apply. Simply put, more income of 
working Americans would be subject to the 15 percent tax bracket rather 
than the much higher 28 percent bracket.

  This legislation would help Americans who are achieving success and, 
as a consequence, have graduated from the 15 percent tax bracket to the 
higher 28 percent tax bracket. Due to bracket creep, 28 cents of each 
additional dollar they earn now goes to the federal government. Talk 
about a disincentive to improving your lot in life. Under our 
legislation, many of these hard working people

[[Page E83]]

will have an incentive to continue to be hard working people. How? They 
would be liberated from the higher tax rate on each additional dollar 
they earn. The real beauty is the legislation gives no preference based 
on status, marital or otherwise. Presently, the higher 28 percent tax 
rate begins to apply to a single person making more than $25,350. Our 
legislation would raise that threshold to $35,000. For heads of 
household, the 28 percent rate starts at $33,950. We would raise that 
to $52,600. For married couples, the 28 percent rate starts at $42,350. 
We would raise it to $70,000.
  According to the Tax Foundation, over 29,000,000 filers would see 
their taxes lowered under this proposal, with the average savings of 
approximately $1,200 per filer. Over 10 million filers would move out 
of the 28 percent bracket to the 15 bracket. Again, this initiative 
represents an infinitely better approach to assisting families with 
their child care needs than the discriminatory Washington-knows-best 
approach embodied in the President's plan. A $1,200 tax cut could pay 
for sixteen weeks of child care, four car payments, up to three months 
of housing bills, or fourteen weeks of grocery bills. That is real help 
for working families.
  The Taxpayer Choice Act would raise the personal exemption from 
$2,700 to $3,400. Again, this simple change would reduce taxable income 
by $700 and allow them the freedom to choose how best to use the 
benefit of their tax reduction. This legislation would deliver broad 
based relief to taxpayers in the lower and middle income ranges.
  This change is straightforward and easy to calculate. For someone in 
the 15 percent tax bracket, the benefit would result in an estimated 
savings of $100, or for a family of four, $400. That reduction gives 
taxpayers a choice of spending on what is the approximate equivalent of 
five weeks of child care, a car payment, housing payment, or five weeks 
of grocery bills. That's real relief and those are real life choices. 
For someone in the 28 percent tax bracket, that's $200 per individual, 
or $800 per family of four. That return could be used for ten weeks of 
child care, almost ten weeks of grocery bills, three car payments of a 
couple of housing payments. As is true today, the deduction would phase 
out for wage earners whose incomes exceed $124,500.
  Let me reiterate an important point. We agree with the president that 
working families in America need relief. However, the President has 
mistakenly interpreted that need as a request for more Washington 
spending. We, on the other hand, know that what working families are 
really asking for is not more federal government, but relief from more 
federal government.
  American families, we have heard you. We agree with you that your 
family should not have to sacrifice one more dime of your hard earned 
money to build new government bureaucracies that will further undermine 
your ability to care for yourself and your family. We will stand with 
you. The bills we have introduced today make it abundantly clear that 
no surplus government revenues should go to more government in 
Washington. Rather, they should go into your pocket. That's common 
sense government.

  The legislation I introduced today should also fit nicely with what I 
believe ought to be a reality before the turn of the century, and that 
is a new tax code that is simple and fair. Americans waste too much 
time and money filling out tax returns. It is a dream for lobbyists, 
lawyers, and tax preparers. It is a nightmare for the American 
taxpayer. Ultimately, the only way to get real reform is to kill the 
beast and start over. Every time Congress starts chipping around the 
edges like we did last summer, we make the code more complicated. We 
now have some 480 different forms, 6,000 pages, and 34 and one half 
pounds. It is time to say, ``Enough already.''
  Reform will not be easy. There is tremendous internal resistance to 
changing the status quo. But it must be done. Some certified public 
accountants from South Dakota were in my office last week and they 
agreed. That profession probably is in the best position to benefit 
from the complexity of the code, and they agree that the current code 
is an abomination.
  The two bills I have introduced today are consistent with a simpler, 
fairer approach to the tax code. At the same time, I hope these bills 
would begin the discussion about replacing the code with a view of 
taxation that invites all Americans to participate in the benefits of a 
growing economy that will spur investment and create jobs by limiting 
taxes and minimizing the burden of tax compliance.
  These are our goals, and I look forward to working with this Congress 
to making them become a reality. To that end, I ask for your support of 
this legislation.

                          ____________________