[Congressional Record Volume 144, Number 85 (Thursday, June 25, 1998)]
[Extensions of Remarks]
[Pages E1236-E1237]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              RESTORE TAX RELIEF FOR SMALL COACH BUILDERS

                                 ______
                                 

                          HON. PHILIP M. CRANE

                              of illinois

                    in the house of representatives

                        Thursday, June 25, 1998

  Mr. CRANE. Mr. Speaker, I rise to commend to the attention of my 
colleagues a bill I am introducing today which will correct an inequity 
in the tax code which punishes certain small businesses.
  The 1990 Omnibus Budget Reconciliation Act taught Congress a number 
of tough lessons. At the time, I took on the leader of my party, then 
President Bush, and, along with every other House Republican, opposed 
the 1990 bill because of its huge tax increases. The bill enacted the 
infamous luxury taxes on boats, automobiles and other goods in order to 
``tax the rich.'' What I predicted at the time was confirmed when the 
U.S. boat and aircraft industries were hit hard economically as a 
result of these so-called ``tax the rich'' policies. The rich were not 
harmed, rather U.S. workers were out of jobs when consumers stopped 
buying goods subject to luxury taxes.
  While Congress has since worked to repeal these harmful luxury taxes, 
there are a few remaining tax inequities from that 1990 bill. The 
federal gas guzzler tax attempted to force better gas mileage from 
automobiles in the U.S. by overtaxing cars that exceeded government 
mandated fuel economy standards. Congress in 1986 provided an exemption 
from the gas guzzler tax for small automobile manufacturers. Those 
benefitting from this tax relief were the small coach builders who 
modify existing automobiles into limousines. Unfortunately, the 1990 
tax bill repealed this small business exemption, thus subjecting the 
small coach builders again to the gas guzzler tax.
  Like the other luxury taxes, the negative consequences of this new 
tax increase fell hardest on the workers of the coach building 
industry. In the late 1980s, there were 35 builders producing up to 
9,000 autos. Today, only 12 builders remain and they produce less than 
2,400 vehicles. The gas guzzler tax adds, on average, $1,800 to the 
cost of one of these vehicles. This cost must also be borne by the 
small businesses who operate limousine services and must replace a 
vehicle every 18 to 24 months.
  The bill I introduce today will restore that exemption for small 
coach builders from the gas guzzler tax. Specifically, my bill will 
exempt

[[Page E1237]]

coach builders who annually manufacture fewer than 10,000 vehicles from 
this onerous tax.
  I urge my colleagues to join me in providing this tax relief for 
small businesses by cosponsoring this legislation.

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