[Congressional Record Volume 149, Number 66 (Tuesday, May 6, 2003)]
[House]
[Pages H3643-H3644]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       REJECT REPUBLICAN TAX PLAN

  Mr. PALLONE. Mr. Speaker, I did not think it was possible, but 
chairman of the Committee on Ways and Means, the gentleman from 
California (Mr. Thomas) came up with a worse tax plan than the one that 
President Bush proposed earlier this year. Neither the President's plan 
nor the House Republican plan, scheduled to be marked by the Committee 
on Ways and Means today, will jump-start the economy.
  Mr. Speaker, since the President took office, more than 2.7 million 
private sector jobs have been lost, the worst record in 40 years. Any 
tax cut passed by Congress should be fair, fast-acting and fiscally 
responsible. The Republican plan fails this test.
  Mr. Speaker, the Republican tax plan is simply unfair. The wealthiest 
Americans will fare better under the Republican tax plan than the 
President's plan, while middle class Americans, Americans with annual 
incomes between $30,000 and $100,000, will actually receive less under 
the Republican plan than they would have under the President's plan. 
According to a report released this week by the Center on Budget and 
Policy Priorities, households with incomes of more than $1 million per 
year would receive an average tax cut this year of $105,600 under the 
House Republican plan, and that is $15,000 more than they would have 
received under the President's proposal.
  Contrast those benefits with the middle fifth of households that will 
receive an average tax cut of $218 under the Thomas plan, slightly less 
than under the Bush plan. And let me reiterate, a millionaire under the 
Republican plan would see a tax benefit of more than $105,000, and an 
American making between $40,000 and $50,000 would receive a cut of only 
$456.
  At a time when we should be doing everything possible to jump-start 
the economy, the Republican solution centers around tax cuts on 
dividends and capital gains, two cuts that are targeted towards the 
wealthiest Americans, and according to economists will not create any 
new jobs. Do not just take my word for it, consider that more than 400 
economists earlier this year said, ``The tax cut plan proposed by 
President Bush is not the answer to the problem.'' The economists 
concluded that the permanent dividend tax cut in particular is not 
credible as a short-term stimulus.
  Mr. Speaker, like the Bush economic blueprint, the House GOP plan is 
fiscally irresponsible, saddling our children with debt and hurting 
long-term economic growth. What a reversal of fortune we have witnessed 
over the last 2 years. When the Bush administration came into office, 
there was a projected $5.6 trillion 10-year surplus. With this tax 
package, coupled with the huge tax cut in 2001, Republicans will 
produce a record $1.4 trillion deficit over the next 10 years. That is 
a $7 trillion reversal in our country's fortunes.
  Today, based on the tax proposal this House will debate later this 
week, it is clear the House Republicans have changed their tune. No 
longer are skyrocketing deficits a concern, this despite the fact that 
Federal Reserve Chairman Alan Greenspan last week agreed that huge 
deficits will threaten economic growth. He stated, ``If through tax 
cuts you get significant increases in deficits which induce a rise in 
long-term interest rates, you will significantly undercut the benefits 
that would be achieved from any tax cut.''
  Finally, Mr. Speaker, the Republican tax plan is full of gimmicks 
designed to hide the true cost to taxpayers. In fact, the only 
proposals within the Republican plan which are beneficial to America's 
middle class; that is, the Marriage Penalty Relief and the Child Tax 
Credit, would expire after 2005. Instead, Republicans would come back 
and probably extend the benefits which would raise the total cost of 
the package to at least $760 billion through 2013. The Washington Post 
editorial page called these gimmicks ``tax cut trickery'' just this 
morning in their editorial.
  Mr. Speaker, at a time when our economy needs a true jolt to reverse 
American's fears of losing their jobs, the Republicans once again plan 
to give a huge tax cut to the wealthiest Americans. This plan offers 
very little to families and middle class Americans, and instead saddles 
them with a

[[Page H3644]]

huge deficit, a deficit that risks the future of Social Security and 
Medicare and means likely future interest rate increases.
  Democrats have proposed a true economic stimulus plan that is fair, 
fast acting and fiscally responsible. Our plan would create 1 million 
new jobs this year, provide an extension of unemployment benefits to 
millions of Americans still looking for jobs, provide tax relief to 
small businesses to invest in new equipment this year and provide 
assistance to cash-strapped States and municipalities.
  I do not think there is any question about the choice; but 
unfortunately, the Republicans have the majority and will likely be 
able to push their tax cut plan through the House later this week. I 
think it is very unfortunate because it will do nothing to reverse the 
economic downturn.

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