[Congressional Record Volume 146, Number 118 (Thursday, September 28, 2000)]
[Senate]
[Pages S9474-S9475]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRAMS:
  S. 3138. A bill to amend the Internal Revenue Code of 1986 to 
increase the amount and availability of the child tax credit and make 
the credit refundable; to the Committee on Finance.


                       helping american families

  Mr. GRAMS. Mr. President, I will talk for a couple of minutes about 
one of the issues about which I am most passionate, and that is taxes, 
or the overtaxation of the American people in a time of surpluses, and 
the refusal of this Congress, this President, to even make an attempt 
to have meaningful tax cuts or meaningful tax relief before the end of 
this Congress.
  In 1997, the Congress passed and the President signed into law my 
$500-per-child tax credit legislation. As a result, today about 40 
million children in this country receive this tax credit every year, 
and it returns a total of about $20 billion a year in tax savings to 
families. That is money that families can use for savings for their 
children's education, for day care, for tutors, for braces, a new 
washer, dryer--anything--a family vacation. But it is what the family 
decides to spend their hard-earned money on, rather than waiting for a 
handout from Washington.
  In fact, for the first time since the 1980s, this tax credit and 
other Republican-initiated tax cuts have reduced the tax burden for 
low- and middle-income families. I have heard many of my colleagues on 
the other side of the aisle bragging about how some people in the 
United States are paying less taxes today--and that is true--but it is 
mainly true because of the $500-per-child tax credit, nothing else that 
this administration or this Congress has done.
  Despite this tax credit, the total tax burden is still way too high 
for working Americans. Today, let's look at an average two-income 
family. The median two-income family pays $26,759 in Federal, State, 
and local taxes. Let's compare this with back in 1992. Those taxes were 
$21,320 a year--a 26-percent increase in the tax burden for average 
families in just the last 8 years of the Clinton administration. That 
is according to the Nonpartisan Tax Foundation. To date, $26,759; 8 
years ago, $21,320.
  That shows the increase in taxes to the median-income family--not the 
rich of this country. They are paying more in taxes, as well. But it is 
the average working family that is paying the brunt of the tax 
increases imposed by this administration. Again, that is according to 
the Nonpartisan Tax Foundation. Total taxes nationwide claim 39 percent 
of hard-earned income, and that is more than the typical family in this 
country pays for food, clothing, shelter, and transportation combined.
  In the past few years, over 20 million Americans earning between 
$30,000 and $50,000 have been pushed from the 15-percent tax bracket 
into the 28-percent tax bracket due to our unfair tax system. They are 
paying almost twice as much for those incomes, pushed from the 15-
percent to the 28-percent tax bracket. As low-income and minimum wage 
workers work harder and pay more, their payroll taxes also increase, 
taking a huge bite out of their hard-earned dollars--dollars that I 
believe are desperately needed to keep those families above the poverty 
line.
  Taxes collected by the Federal Government have reached 20.6 percent 
of all national income. That is the highest level since World War II. 
The government takes one-fifth of every dollar produced in this country 
every year. In the next 10 years, working Americans will pay taxes that 
will contribute to an over $2.2 trillion non-Social Security surplus. 
This non-Social Security surplus will be $2.2 trillion and that is even 
after assuming government spending is increasing along with the level 
and rate of inflation. This non-Social Security surplus comes from 
increased personal taxes and the realization of our capital gains 
taxes.

  I believe this money should be returned to working Americans in the 
form of some tax relief, debt reduction, and also Social Security 
reform. Yes, overtaxed American families still need tax relief today. I 
believe using some of the non-Social Security surplus to expand the 
$500-per-child tax credit is one of the right things to do because 
Washington, again, is taking more taxes from American families at a 
time when it doesn't need the money as bad as families do.
  I have repeatedly argued in this Chamber that the family has been and 
will continue to be the bedrock of our society. Strong families make 
strong communities, strong communities make for a strong America, and 
our tax policies should strengthen families and should be there to 
reestablish the value of families.
  Between 1960 and 1985, Federal taxes on American families increased 
significantly. For families with 4 children, the Federal income tax 
rate increased 223 percent; for families with two children the rate 
increased 43 percent. The inflation-adjusted median income for families 
with children also decreased between 1973 and 1994. So its income was 
going down and taxes were still going up.
  While the 1997 Taxpayer Relief Act, which included my $500-per-child 
tax

[[Page S9475]]

credit, has helped to change this situation, there is still room for 
improvement, a lot of room for a lot of improvement. For example, 
combined with the dependent exemption, the tax benefits for families 
raising children still falls well below both the inflation-adjusted 
value of the original dependent exemption, and also the actual cost of 
raising children according to Minnesota's Children Defense Fund.
  In addition, this child tax credit and the income threshold for 
families qualifying for credit are not indexed for inflation. As a 
result, the value of this child tax credit would also shrink in the 
future and fewer families would qualify for the credit.
  That is why I am introducing tonight legislation aimed at expanding 
the tax credit. My legislation would increase the tax credit from $500 
per child to $1,000, and it would be adjusted for inflation every year. 
It would also index the income threshold for families qualifying for 
this tax credit.
  While I strongly support this increase as well as the marriage 
penalty repeal and getting rid of the death tax, the only way we will 
achieve meaningful tax relief is to reform our entire tax system 
completely. Even my legislation today, I look at as just an interim 
step toward this very essential goal of having a tax system that is 
simple, fair, and easy to understand.
  With these proposed improvements we would allow overtaxed working 
families with children to keep a little bit more of their own money--
give them the opportunity to spend it on their own priorities, not 
looking for a handout from Washington, not saying they need another 
program from Washington, not that they want another big government 
approach--but allowing them to keep some of their dollars so they can 
make the determination on how they want to spend their money, a little 
bit more of their own money, to spend on their own priorities. I urge 
my colleagues to support this legislation.
  Mr. SESSIONS. Mr. President, I say to Senator Grams, I think this is 
another insightful bit of tax relief policy you are promoting. I look 
forward to studying it. People think sometimes this is not possible. I 
don't think we stop to celebrate enough the wonderful thing that 
happened when, under your leadership and that of a lot of others who 
worked on it, we were able to provide a $500-per-child tax credit to 
working families in America. A mother with two children will now have, 
today, $1,000 more a year--nearly $80 a month with which they can buy 
shoes or fix the muffler on the car, take the kids on a trip or to a 
movie or out for a meal. It is the kind of thing that was really great. 
People said it could not be done and it was done.
  I think these other proposals the Senator makes are realistic and 
also can be done.
  We need to continue to work at this. The question is whether the 
American people are going to be able to keep this money or are we going 
to allow more and more to come to Washington as it grows more and more 
powerful and the power and wealth and independence of American citizens 
grows weaker and weaker.
  Mr. GRAMS. The Senator from Alabama is right. If we look at it, at a 
time of overtaxation, when American workers are getting up every 
morning, working hard, and sending this money to Washington, and then 
it is overtaxed--we are not talking about cutting taxes at all. We are 
talking right now about returning some of the surplus to make sure 
those people who worked hard and produced this windfall get it back.
  We tell our children: If you find a wallet on the street with $1,000 
dollars in it, the first thing you should do is try to return it to the 
owner. Make sure you give the money back. Washington has found a wallet 
with $2.2 trillion in it, and they won't give it back. They are trying 
to find a way to spend it. I think our hard-working families deserve 
some tax credit along with debt reduction and securing Social Security, 
rather than leaving it for the big spenders in Washington to decide how 
they want to divvy up and dole out their money.
  Mr. SESSIONS. I think my colleague also makes an excellent point 
about this percentage of the total gross domestic product. People say 
we cannot afford a tax cut, but we have reached record levels of a 
total gross domestic product that is being taken by the Government. 
These suggestions the Senator makes are worthwhile. We need to be 
working on that and the marriage penalty and the estate tax and a lot 
of other things around here which we can afford. I thank my colleague.
  Mr. GRAMS. I thank the Senator from Alabama for his support.
                                 ______