[Congressional Record Volume 147, Number 28 (Tuesday, March 6, 2001)]
[Extensions of Remarks]
[Pages E287-E288]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 INTRODUCTION OF A BILL TO REDUCE THE CORPORATE TAX RATE TO 33 PERCENT

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                          HON. PHILIP M. CRANE

                              of illinois

                    in the house of representatives

                         Tuesday, March 6, 2001

  Mr. CRANE. Mr. Speaker, today I am introducing three pieces of 
legislation to refine the tax proposal put forward by President Bush. 
Let me state at the outset that I fully support President Bush's tax 
proposal as he laid it out. I think it is appropriate for the times and 
well-designed. Even so, there is no legislation or proposal that cannot 
be improved upon. And so I offer these three bills in this spirit and 
in the belief that the President in all likelihood would and should 
support them.
  The bill I am introducing takes as its starting point the income tax 
rate reductions proposed by President Bush, phased-in over ten years. I 
have included these rate reductions to provide the context for my 
proposed refinement, which is to reduce the top corporate income tax 
rate to 33 percent to be consistent with the top individual income tax 
rate in the Bush proposal of 33 percent.
  The driving force of the Bush tax program is the importance of 
reducing tax rates. This is manifested in the reduction in the 
statutory tax rates, but also in such provisions as the doubling of the 
per child credit, the effect of which is to soften the high effective 
tax rates many lower-income taxpayers face due to the phase-out of the 
Earned Income Tax Credit (EITC). When we reduce these ``marginal'' tax 
rates, we reduce the most important disincentives our tax system 
imposes on work effort, saving, and investment. Think of it! Just as an 
individual or a family starts to climb the economic ladder they face a 
marginal tax rate of almost 50 percent thanks to the combination of the 
federal individual income tax, the

[[Page E288]]

phase-out of the EITC, the payroll tax, and any state income taxes 
imposed.
  When it comes to tax policy, reducing marginal tax rates is the best 
insurance policy we can buy for ensuring a strong economy in the 
future. By reducing tax rates as he has proposed, the President would 
reduce disincentives for individuals, partnerships, sole 
proprietorships, and even for a special brand of economic organization 
called an S Corporation. However, his program does not provide similar 
relief to the more common corporate form, known as the C corporation. 
The bill I am introducing today extends the principle of reducing tax 
rates to the top corporate income tax rate faced by C corporations, 
which currently stands at 35 percent. My bill would reduce this tax 
rate to 33 percent, and in so doing would provide tax relief to almost 
all corporate taxpayers.
  Reducing the corporate income tax rate to 33 percent would reduce the 
disincentive facing corporations to invest in new plants and equipment. 
Thus, the level of investment would increase, helping America out of 
its current economic slowdown and putting us on a path of stronger 
growth in the future. The extraordinary growth we experienced prior to 
the current slowdown was driven largely by productivity growth that is 
largely attributable to increased capital formation. Reducing the 
corporate income tax rate would encourage a resumption of this capital 
formation and, in the process, would increase the competitiveness of 
America's corporations and America's workers.
  As the corporate community searches for tax relief that is broad in 
application, defensible in principle, and conducive to prosperity at 
home and greater competitiveness abroad, they can hardly do better than 
to reduce the corporate income tax rate as I have proposed in this 
bill. That is not to say that other changes would not also be 
beneficial. For example, repeal of the corporate Alternative Minimum 
Tax, reform of our international tax laws, and a thorough modernization 
of our system of capital cost recovery system would each be highly 
beneficial and worthy of consideration. However, in the context and an 
era of individual tax rate reduction, I believe a simple reduction in 
the corporate income tax rate has the greatest chance for success at 
this time. And so I urge my colleagues to support this legislation, 
modest though it is, to permit America's corporations and America's 
shareholders to share in tax relief while ensuring our companies remain 
strong and competitive.

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