[Congressional Record Volume 148, Number 8 (Wednesday, February 6, 2002)]
[Senate]
[Page S385]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             REDUCING TAXES

  Mr. GRAMM. Mr. President, back in January of last year, Senator Zell 
Miller of Georgia and I started working together in support of the 
President's tax cut. Obviously, I am awfully happy and awfully proud 
that we succeeded.
  Taxes are being reduced for working Americans. The marriage penalty, 
which my dear colleague from Texas just talked about, is being 
eliminated. The death tax is being phased out. Rates are being reduced 
for every American. The net result is that working people are getting 
the opportunity to keep more of what they earn.
  I think that was the right policy. It was supported on a bipartisan 
basis. It got a strong vote in both Houses of Congress, but because of 
a technicality in the Budget Act, we have this incredible anomaly that 
10 years from now all of that tax cut goes away.
  Nothing could be more destabilizing than having a tax system which is 
not permanent. Nothing could have a greater impact on the economy that 
would happen 10 years in the future, that you could know about today, 
than having the specter of a massive tax increase occur automatically.
  Congress never intended that. It was a technicality in the budget 
that forced it. So when the debate started to occur about how do we 
deal with the recession, how do we stimulate the economy, Senator 
Miller and I got back together and tried to come up with a simple 
program that did not cost money during the recession and drive up the 
deficit but yet stimulated the economy dramatically, in the process 
putting people back to work and putting money back in the Treasury.
  We concluded there were two simple things we could do that would 
achieve both those goals: put people back to work, have them paying 
taxes into the Treasury, and at the same time would not cost the 
Federal Government much money.
  We concluded that the strongest stimulus package that could be 
adopted that would meet those goals was to make the tax cut permanent 
by repealing the sunset provisions in the Tax Code so that when we 
eliminate the marriage penalty, it is forever, and people know it. When 
we eliminate the death tax, it is gone, and people can plan on it. 
These new rates are going to be permanent so you can invest and save 
and work harder knowing it.
  The second proposal we had was cutting the capital gains tax rate. I 
am not sure that is politically correct in an era where the first thing 
we debate is, would anybody who has any money, make any money. But 
cutting the capital gains tax rate in the entire 20th century never 
failed to put money in the Treasury, never failed to stimulate the 
economy. And based on that experience, we were proposing that we cut 
the top bracket from 20 percent to 15 and the bottom bracket from 15 to 
7.5 percent.
  That simple proposal would have raised Federal revenues in the next 2 
years--no one debates that--and would have provided a very strong 
stimulus to the economy. It appears we are not going to have an 
opportunity to offer it because the debate is going to be ended. We 
thought it was important that there be a vote on a real stimulus 
package. We have debated a stimulus package, but no one has really 
proposed one.
  The President, very much to his credit, thought, in light of 
September 11, that we had enough bipartisanship that he could take half 
of the ideas the Democrats had, take some ideas Republicans had, make a 
proposal, and it would be adopted on a bipartisan basis. That turned 
out not to be the case. But if you wanted a real stimulus package that 
would stimulate and that would make money for the Government at the 
same time, our proposal--making the tax cut permanent and cutting the 
capital gains tax rate--is that proposal.
  I am proud of it. I wish we had had an opportunity to vote on it. I 
don't believe it would have been adopted. But if we are going to debate 
stimulus, we ought to have a vote on something that will stimulate. If 
you are trying to produce an economic response, you want something that 
is going to produce it. We had it, and I am very proud to have had an 
opportunity to work on this with Senator Miller.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Georgia.

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