[Congressional Record Volume 147, Number 52 (Tuesday, April 24, 2001)]
[Senate]
[Pages S3833-S3834]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           THE ARKANSAS PLAN

  Mrs. LINCOLN. Mr. President, today I am announcing my vision for the 
design of the tax cut and I am sending a message to my Chairman and to 
the President that I am willing to work with them on a tax cut as long 
as it recognizes that Arkansas taxpayers

[[Page S3834]]

also work hard and have earned a share of the surplus in the form of a 
tax cut.
  The President's tax rate cuts are skewed to the rich and the average 
Arkansan won't see a real cut, if at all, until 2006. Forty-nine 
percent of Arkansans have adjusted gross incomes under $20,000 and the 
average household income in Arkansas is $29,019. About 85 percent of 
Arkansas families don't make enough to qualify as one of the ``model 
families'' that President Bush has been talking about in his speeches. 
In other words, only about 15 percent of Arkansans would get a $1,600 
tax cut. The other 85 percent of Arkansans deserve a real tax cut too.
  I believe in creating a new ten percent bracket like the President, 
but under my plan it be fully implemented this year. That will bring 
thousands of dollars to Arkansas families immediately and over the next 
5 years will mean significantly more to the Arkansas economy than will 
the Bush plan.
  I also want to expand the 15 percent bracket by $10,000. This will 
mean that 85 percent of Arkansas taxpayers and small businesses never 
make it out of the 15 percent bracket and will never pay more than 
about an 11 percent effective Federal tax rate. Expanding the 15 
percent bracket would mean that a couple earning $55,000 would get $980 
more than they would under the Bush plan, regardless of whether they 
have children or not. The only way for average citizens to get a 
significant tax cut under the Bush plan is to have children. Single 
people and people who are no longer raising their children deserve a 
tax cut too, and I propose to give them one.
  I do believe in doubling the child tax credit as the President 
proposes. However, I believe it should be partially refundable for 
working taxpayers as their Earned Income Tax Credit is phased out. 
Approximately 140,000 Arkansas families, or 37 percent of Arkansas 
families with children, will not benefit from the President's plan 
because their incomes are too low to owe federal income taxes. By 
making the child tax credit partially refundable, low-income working 
parents would get the benefits of the child tax credit just like I do. 
At the same time, I believe it is unfair to phase out the value of 
exemptions and credits for high income individuals. What's good for the 
goose is good for the gander. If we are going to give a $1,000 per-
child tax credit to working families, then we should give that credit 
to all working families, rich and poor.
  We also must fix the Alternative Minimum Tax, AMT. I have asked the 
President in person, I have asked him in writing, ``How will your 
Administration address the AMT?'' Many of you may not know that the 
AMT, which is designed to prevent affluent taxpayers from sheltering 
their tax liability in credits and deductions, will soon have an 
unintended consequence for 37 million Americans. These middle income 
workers will be paying higher rates and filing out more forms if we do 
not act. At a minimum, the AMT exemptions should be raised and indexed, 
and family credits should be protected from the AMT's bite.
  With our private savings rate at a negative for the first time in our 
history we should encourage more private savings by increasing the IRA 
and 401(k) contribution limits as part of an overall retirement 
security and expansion act. Increasing private savings is an important 
way to keep capital reserve up and interest rates low. The fiscally 
conservative thing to do is include the pension bill in this year's tax 
relief.
  I support eliminating the so-called marriage penalties in the tax 
code, but we should do it in a way that is fair to widows and singles. 
Taxpayers should not be punished for getting married, but nor should 
they be punished when their spouse dies or if they choose not to get 
married.
  Lastly, the estate tax should be repealed within the next three 
years. While the revenue estimates of repealing the estate tax have 
been high, I believe there are many ways we can ensure that death is no 
longer a taxable event without breaking the treasury. In the short run, 
we may have to provide for a mark-to-market fee to provide for a 
stepped-up basis for inherited property or a higher capital gains rate 
for inherited property, but no tax would be paid unless the asset was 
sold. In short, the U.S. tax code should not be an obstacle to family 
farmers and small business people who want to pass on their legacy.
  At the end of the day, Vice-President Cheney would get about a $1 
million tax cut under my plan, instead of the $2.4 million he would get 
under the Bush plan. However, average Arkansans would see thousands 
more and those dollars will be spent and saved in Arkansas where they 
belong. A family of four with a $30,000 income would get a $1,600 per 
year tax cut which is approximately $484 more per year than they would 
get under President Bush's plan. My plan would put more money in 
Arkansas and the South, and would cost $400 billion less than the 
President's $1.6 billion plan. That cost savings is important, because 
ultimately, I will not support any tax cut plan that would endanger the 
long-term solvency of Social Security and Medicare and inhibit our 
ability to retire the national debt.

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