[Congressional Record Volume 152, Number 73 (Friday, June 9, 2006)]
[Senate]
[Pages S5682-S5683]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DISCUSSING TAX CUTS
Mrs. CLINTON. Mr. President, in the wake of yet another contentious
debate over the size and scope of the Republican tax cuts, I believe
that it is high time that this Chamber engages in a serious discussion
about the fiscal condition of our Nation and that Senators make an
objective assessment of what the economic policies of the last 5
[[Page S5683]]
years have wrought on our Nation's long-term economic security. It is
critically important that we realize that every tax cut we debate or
enact today, will have a cost for workers and future generations down
the road. Despite the best wishes of some Senators, there is no such
thing as a tax cut that pays for itself and the fiscal profligacy of
the last few years will have a dramatic effect on the economic
opportunities for the next generation of Americans. Indeed, what has
made this Nation great is only the result of the commitment of each
generation of Americans to leave a country for their children and
grandchildren that was a little better than they found it. We need to
ask whether our economic choices today will enable us to fulfill that
commitment.
A recent article in U.S. News and World Report magazine has clearly
laid out what is at stake with the fiscal decisions that we have made
and will continue to make in the months and years to come. Therefore, I
ask unanimous consent that this article be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From U.S. News and World Report, May 1, 2006]
Playing Fair on Taxes
(By Mortimer B. Zuckerman)
Millions of Americans breathe relief at having filed their
tax returns. Once again they were face to face with the
complexities of compliance, which is why the average American
family spends about 26 hours on the task. Every
administration promises it will simplify the tax codes, but
60 percent of Americans still need professional help, at a
cost of $150 billion a year. They are not dummies. They are
busy, honest people who have to cope with grotesquely swollen
federal tax regulations. The number of rules has risen by
over 40 percent in the past four years, from 46,900 in 2000
to 66,498 last year. Is there anyone, really, who can figure
out the complicated and tricky alternative minimum tax?
Designed to stop rich people from claiming too many
deductions, it now ensnares millions of middle-class
families.
There is no point in expecting Congress to simplify the tax
code. Why? Because congressmen need lobbyists to get elected,
which means they need millions of dollars, and the lobbyists
are intent on inventing new complexities to give tax breaks
to well-connected companies and individuals or for
fashionable public crusades.
Even more lamentably, Congress, over the past five years,
has diminished the progressivity of our tax system, which has
always required richer people to pay a higher rate than
poorer ones. A progressive tax has long supported an
expanding middle class and should provide the greatest
rewards for the people who work hardest. But the Bush tax
cuts have made it less so.
The 2001 income tax rate cuts and the 2003 capital-gains
and dividends cuts have lowered the average tax rate for the
richest one tenth of 1 percent of Americans by 3.8 percent
but reduced taxes just .03 percent for the bottom 20 percent.
Of the tax savings on investment, the lion's share--more than
70 percent--went to the top 2 percent. Of the 90 percent of
taxpayers who make less than $100,000, only 14 percent
benefited from the dividend-tax cut and only 5 percent from
the capital-gains-tax cut. People who own stocks hold them in
retirement accounts, which are ineligible for investment
relief, and when withdrawn, the profits are reduced by the
higher rate applied to wage earnings.
In this way, the tax burden on the richest has been reduced
to where those who earn $10 million or more pay at a lesser
rate than those who earn between $500,000 and $1 million.
(And the top 400 pay at an even lower rate!) In part, that's
why the share of income going to the top 1 percent of
Americans has jumped from 9 percent to 14 percent of our
national income, an increase of 50 percent. It is
inequitable, reprehensible, absurd, and unfair. Is it any
wonder that an NBC News / Wall Street Journal poll last year
found that most Americans, 54 percent, believed the Bush tax
cuts weren't worth it?
Class warfare? Yes, these cuts have helped stimulate the
economy. But they have also turned the impressive fiscal
surplus when President Clinton left office into a long-term
budget deficit now trillions of dollars, of which about 60
percent can be attributed to the ``Bush effect.'' These
deficits are mortgaging workers'' future pay gains to fund
baby boomers' retirement payments.
And they're being financed with borrowed money, which will
have to be repaid, with interest, by taxpayers of the future.
All of this as we face an aging population that will drive up
the cost of government retirement programs with serious
consequences for our future living standards in the form of
higher taxes or lower benefits. Social Security will provide
less of a safety net; Medicare will not be able to guarantee
healthcare to older Americans; and Medicaid will no longer be
able to help the poor.
The tax cuts on investment income should not be extended
after they expire in 2010. One argument in favor of keeping
the cuts in place is that eliminating them would hurt
economic growth. Yet, when President Clinton raised the
marginal rate on high incomes, the opposite occurred:
Unemployment dropped without causing inflation; productivity
and growth accelerated to levels not seen since the 1960s,
and the budget deficit was converted to an impressive
surplus. Government borrowing stopped draining the capital
markets, freeing up money for private investment.
Nor can it be said that taking these new tax cuts from the
wealthy would amount to class warfare. It is hardly class
warfare to suggest that some of the $750 billion a year that
the top 10 percent of income earners are taking in now should
go to sustain the fiscal health of the country and the
expansion of our middle class and to maintain America as a
true land of opportunity.
Remember that job security, private pensions, and employer-
provided healthcare coverage are being cut back. Remember
that there is significant erosion in public services such as
schools, colleges, transportation, health, recreation, and
job training. Understand why large numbers of people in our
society are feeling increasingly vulnerable. It is time to
redress the balance.
____________________