[Congressional Record Volume 148, Number 106 (Tuesday, July 30, 2002)]
[Senate]
[Page S7583]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DORGAN (for himself and Mr. Warner):
  S. 2825. A bill to amend the Internal Revenue Code of 1986 to allow a 
nonrefundable tax credit for contributions to congressional candidates; 
to the Committee on Finance.
  Mr. DORGAN. Mr. President, earlier this year we enacted a bold new 
campaign finance reform bill. After years of debate and delay, the 
Congress passed and the President signed this far-reaching legislation, 
known as McCain-Feingold. This new law eliminates the large ``soft 
money'' contributions from our campaign finance system and it expanded 
the role that some individuals can play by raising the individual 
campaign contribution limits.
  But there is one critical area that the McCain-Feingold bill didn't 
address, one important problem that the new law doesn't solve: how to 
give low- and middle-income families an incentive to contribute to the 
candidate of their choice.
  Today, I am introducing a bill with my colleague from Virginia, 
Senator Warner, that will do just that. It will empower millions of 
working Americans to become engaged in our political system, by 
providing a tax credit to those who donate money to congressional 
candidates.
  As campaigns become more and more expensive, the number of small 
contributors is actually decreasing. The current campaign finance 
system is becoming dominated by big dollar contributors. This is not 
healthy for our campaigns and it is not good for our democracy.
  My bill would make middle income Americans more able to donate to 
candidates. Specifically, my bill would provide a maximum $400 tax 
credit to married couples earning up to $120,000 for their campaign 
contributions. For singles with income up to $60,000, the tax credit 
would apply to contributions up to $200. This credit will provide a 
dollar for dollar offset for contributions, an incentive that could 
encourage the vast majority of working families to consider 
contributions to the candidates of their choice.
  This is not a new idea. This type of credit was a part of our tax 
system for more than a decade in the 1970s and 1980s. It has been a 
part of many campaign finance reform proposals over the years, 
proposals that have been introduced and supported by both Democrats and 
Republicans. And this policy proposal is the focus of a new study by 
the American Enterprise Institute, AEI, which concluded that this 
approach would help to elevate small donors from the supporting role 
that they now play. So, our proposal has been successful in the past, 
and it has had broad support from both parties over the past thirty 
years.
  Participation in the political process is key to a strong democracy. 
This bill will help broaden participation and will provide an incentive 
for more Americans to be included in political campaigns. That is 
healthy for our form of government.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2825

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. CREDIT FOR CONTRIBUTIONS TO CONGRESSIONAL 
                   CANDIDATES.

       (a) General Rule.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     nonrefundable personal credits) is amended by inserting after 
     section 25B the following new section:

     ``SEC. 25C. CONTRIBUTIONS TO CONGRESSIONAL CANDIDATES.

       ``(a) General Rule.--In the case of an eligible individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to the 
     total of contributions to candidates for the office of 
     Senator or Representative in, or Delegate or Resident 
     Commissioner to, the Congress.
       ``(b) Maximum Credit.--The credit allowed by subsection (a) 
     for a taxable year shall not exceed $200 ($400 in the case of 
     a joint return).
       ``(c) Verification.--The credit allowed by subsection (a) 
     shall be allowed, with respect to any contribution, only if 
     such contribution is verified in such manner as the Secretary 
     shall prescribe by regulations.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Candidate; contribution.--The terms `candidate' and 
     `contribution' have the meanings given such terms in section 
     301 of the Federal Election Campaign Act of 1971.
       ``(2) Eligible individual.--The term `eligible individual' 
     means any taxpayer whose adjusted gross income for the 
     taxable year does not exceed $60,000 ($120,000 in the case of 
     a joint return).''.
       (b) Conforming Amendments.--
       (1) Section 642 of the Internal Revenue Code of 1986 
     (relating to special rules for credits and deductions of 
     estates or trusts) is amended by adding at the end the 
     following new subsection:
       ``(j) Credit for Certain Contributions Not Allowed.--An 
     estate or trust shall not be allowed the credit against tax 
     provided by section 25C.''.
       (2) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting after the item relating to section 25B the 
     following new item:

``Sec. 25C. Contributions to congressional candidates.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2002.
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