[Congressional Record Volume 144, Number 95 (Thursday, July 16, 1998)]
[Extensions of Remarks]
[Page E1317]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          TAX CUT OPPORTUNITY

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                           HON. NEWT GINGRICH

                               of georgia

                    in the house of representatives

                        Thursday, July 16, 1998

  Mr. GINGRICH. Mr. Speaker, I would like to commend to the attention 
of my colleagues the following article, ``Tax Cut Opportunity,'' 
written by Pete Du Pont for the June 18, 1998, edition of the 
Washington Times. This article notes the opportunity before us to 
reduce the tax burden on American citizens at this time of peace and 
prosperity.

               [From the Washington Times, June 18, 1998]

                          Tax Cut Opportunity

                           (By Pete Du Pont)

       As any healthy liberal will tell you, in times of war, 
     pestilence, recession or social disorder, government spending 
     must increase to meet the challenge. And so taxes must 
     increase as well to pay the costs of government intervention.
       But what of good times? In times of peace, prosperity, 
     growth and harmony, should government spending and taxes 
     still increase?
       Surely the answer is no. In good times the rate of 
     government should shrink. And so it is time for a significant 
     tax cut.
       There are many ways to cut taxes: end the marriage penalty, 
     reduce the capital gains tax rate, or eliminate death taxes, 
     for example.
       But the best way is to cut income tax rates across the 
     board by 23 percent. Why that amount? Because that would 
     bring tax revenues as a share of gross domestic product (GDP) 
     back to what they were when President Clinton took office. 
     But since government tax receipts have increased 35 percent 
     since 1993, the 23 percent tax cut is far less than the five-
     year increase in revenues.
       Recall that when Mr. Clinton took office in 1993, one of 
     his first legislative acts was to increase taxes. Revenues 
     have increased by approximately a tenth of a percent of GDP 
     every single quarter since Bill Clinton became president.
       Revenues were 19 percent of GDP in the first quarter of 
     1993 when he took office. They have risen almost continuously 
     each quarter since then, and federal revenue now stands at 
     21.5 percent of GDP as of fourth-quarter 1997. With the GDP 
     at $8 trillion, this is equivalent to a tax increase of $8 
     billion every three months for the last five years.
       But suppose instead the fiscal policy of the Congress had 
     been to hold the percentage of GDP consumed by taxes 
     constant. Government revenues would have increased over the 
     five years by $292 billion (24 percent), and the taxpayers 
     would have received a tax cut of $419 billion, which is 
     $1,558 per person or $6,230 for a family of four. We could 
     have cut federal taxes by $172 billion last year, and taxes 
     as a share of GDP would have been no lower than they were 
     before Mr. Clinton became president.
       Despite the small tax cut enacted by Congress in 1997, 
     forecasts indicate revenues as a share of GDP will remain at 
     historically high levels for the foreseeable future. Last 
     month, the Congressional Budget Office reported that revenues 
     will be at least 21 percent of GDP until at least the year 
     2000, and are expected to be at least 20 percent of GDP until 
     the year 2050. To borrow a phrase, rapidly increasing 
     revenues stretch as far as the eye can see.
       We are living in the best of times, in peace and 
     prosperity. Our budget is balanced, our revenues are in 
     surplus. Yet our tax burden is as high as it has ever been--
     in times of peace and war, in good times or bad. Now is the 
     time to restore some balance in our fiscal policies. Now is 
     the time to reduce the percentage of GDP taken by taxes back 
     to its 1992 level.
       Congress could do many things with the tax code to reduce 
     its burden on us. But the best thing, the fairest thing, is 
     to enact a 23 percent cut in federal income taxes. By 
     reducing federal income tax rates by 23 percent, we would 
     effectively restore the tax burden to its pre-Clinton level.
       The United States is experiencing an unprecedented economic 
     boom, and an unprecedented period of peace. Our current 
     federal tax levels reflect neither of these realities. When 
     the world is at peace, the budget is balanced and the economy 
     the strongest in decades, tax policy should reflect the times 
     in which we now live: peace and prosperity.
       The time for a tax cut is today.

       

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