[Congressional Record Volume 147, Number 18 (Thursday, February 8, 2001)]
[Extensions of Remarks]
[Pages E142-E143]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           PAYROLL TAX CREDIT

                                 ______
                                 

                         HON. THOMAS M. BARRETT

                              of wisconsin

                    in the house of representatives

                       Thursday, February 8, 2001

  Mr. BARRETT of Wisconsin. Mr. Speaker, it is with great pleasure that 
I introduced legislation yesterday to provide much needed tax relief to 
America's working men and women. Unlike other proposals currently under 
consideration, my bill would offer fair, across-the-board tax relief 
while providing a stimulus to the economy, without risking a return to 
the budget deficits of the 1980's and 90's.
  In this period of substantial budget surpluses, most of us agree that 
Americans deserve a break in their taxes, but we are divided on the 
best way to accomplish this. President Bush has proposed a $2 trillion 
package of tax cuts, the centerpiece of which is a reduction in income 
tax rates. Unfortunately, this proposal is flawed in two important 
ways: first, it relies on almost all of the Congressional Budget 
Office's recent forecast of an on-budget surplus of $2.7 trillion over 
ten years, an amount that is by no means guaranteed. Second, the great 
majority of the tax relief would go to the wealthiest Americans.
  The Bush proposal is not the only way to implement an across-the-
board tax cut. The legislation I have introduced would provide tax 
relief to all working Americans in the form of a tax credit based on 
the amount paid in Social Security and Medicare payroll taxes, up to 
$300 per individual and $600 per couple filing jointly. At a cost of 
approximately $40 billion per year, this credit would mean tax relief 
for each and every American who pays into Social Security and Medicare, 
but would not tie up the entire expected surplus. If for some reason 
the surplus does not meet current projections a few years down the 
road, we will not face a sudden deficit. In addition, there will be 
enough left over for other top priorities such as creating a 
prescription drug benefit under Medicare and improving America's 
schools.
  Importantly, this proposal will benefit the three-quarters of 
Americans who pay more in

[[Page E143]]

payroll taxes than in income tax. Unlike the Bush proposal, in which 
the top five percent of Americans would receive fifty percent of the 
tax cut, my bill will offer everyone who currently pays into Social 
Security and Medicare a credit of up to $300, even if they owe no 
income tax. The worker at the bottom of the income scale will receive 
the same dollar credit as the highest-paid CEO. Of course, $300 means 
much more to someone making the minimum wage.
  Much has been said recently about the need for an across-the-board 
tax cut to stimulate the economy. Experts agree that the best way to do 
this is to put more money immediately in the hands of those who will 
pump it back into the economy. A $2 trillion tax cut for the wealthy 
that provides only $21 billion in relief in the first year will not 
accomplish this goal. A refundable payroll tax credit, which does not 
exclude lower- and middle-income workers, is what our country needs. I 
urge my colleagues to support this common-sense proposal.

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