[Congressional Record (Bound Edition), Volume 146 (2000), Part 5]
[Senate]
[Page 6483]
[From the U.S. Government Publishing Office, www.gpo.gov]



                 MARKING THE ARRIVAL OF TAX FREEDOM DAY

  Mr. GRAMS. Mr. President, today is Tax Freedom Day, the day on which 
working Americans stop working just to pay their State, Federal, and 
local taxes and actually begin keeping their earnings for themselves.
  This is an important day for American taxpayers, but it is certainly 
not a happy occasion because every year--since 1913--Tax Freedom Day 
has arrived later and later. This means that Americans are working more 
hours and more days every year just to pay their tax bill. This year, 
Americans had to work 124 days for their local, State and Federal 
governments before they could finally start working for themselves and 
their families on May 3.
  What is even more troubling is that in 13 States--including my home 
State of Minnesota--Tax Freedom Day will arrive 2 or more days later 
than the rest of the Nation. That means Minnesota taxpayers have to 
wait longer before they can start working for themselves, not for the 
Government.
  Despite the fact that Americans work so long for the Government, we 
have recently heard a lot of talk on the Senate floor and in the media 
that the Federal tax bite is the smallest in 40 years and that the era 
of big government and high taxes is over. If that is true, why hasn't 
Tax Freedom Day arrived earlier than last year?
  The stark truth is that the Federal Government's tax collecting--and 
spending--are still too high.
  The facts speak for themselves. Although the total Federal tax burden 
is slightly lower thanks to our tax-relief initiatives, particularly 
the bill I authored to provide a $500 per-child tax credit, the 
combined burden of Federal personal income and payroll taxes is well 
above the figures of both World War II and 1980 prior to the Reagan tax 
cut. Federal taxes consume 20.4 percent of GDP, compared to 17.5 
percent of GDP when President Clinton took office. Since 1993, federal 
taxes have increased by 54%, which for the average taxpayer translates 
into a $2,000 tax hike.
  The combined personal income and payroll tax soared to 16.3% of GDP 
in 1999, up from 14.2% in 1992. Measured as a share of GDP, the 
personal income tax rose from 8% in 1981 to 9.6% in 1999. The payroll 
tax now takes 6.8% of GDP, up from 4.5% in 1970.
  On average, each American is paying $10,298 this year in Federal, 
State, and local taxes. A typical family now pays more of its income in 
total taxes than it spends on food, clothing, transportation, and 
housing combined. More and more middle-income families are being pushed 
into higher tax brackets each year.
  Even for most low- and middle-income families, federal payroll taxes 
take a huge bite of their income, and it keeps growing. For example, in 
1965, a family earning wages of $10,000 paid $348 in payroll taxes. 
Today, that family would pay $1,530 in payroll taxes--an increase of 
340 percent.
  According to the Tax Foundation, a nonpartisan group that tracks the 
government tax bite at all levels, the total tax burden has grown 
significantly since 1992. While State and local taxes have grown 
somewhat, Federal taxes account for the largest share of the increase.
  Federal, State and local taxes claim 39.0 percent of a median two-
income family's total income and 37.6 percent for a median one-income 
family, according to a Tax Foundation study.
  During the Clinton administration, Tax Freedom Day has leap frogged 
almost 2 weeks from April 20 in 1992 to May 3 this year. The Clinton 
Presidency means working Americans have to spend an extra 13 days 
working for Government. Not since the era of the Vietnam War and 
President Johnson's ``Great Society'' programs has Tax Freedom Day been 
pushed back so far in such a short period of time--and this is from an 
administration that claims it has put an end to ``big government.''
  The Government is getting bigger, not smaller. Some people claim that 
big Government is over because Government spending as a percentage of 
GDP is shrinking. The real question is how do we measure the size of 
the Government? Is it the number of employees, the number of dollars 
spent, the tax burden, the hidden costs of regulations, or all of the 
above? I believe it should be all of the above. The growth of the 
economy does not have to be linked to the growth of Government. In 
fact, I have always said that we can streamline the Government and 
still provide all the Government services we need.
  A more meaningful way to measure Government spending is to look at 
the number of dollars spent. Since President Clinton took office in 
1993, Government spending has increased from $1.40 trillion to $1.83 
trillion in 2000, a 30-percent rise. During the same period, Government 
revenue increased from $1.15 trillion to $2.08 trillion, a 75-percent 
increase.
  The growth for domestic nondefense spending was 6.3 percent between 
1990 and 1995. In the last 2 years alone, nondefense spending grew by 
5.3 and 6.8 percent. President Clinton has proposed a 14-percent 
increase in his last budget. If this is not big Government, what is?
  If President Clinton's spending frenzy continues, it will wipe out 
the entire $1.9 trillion non-Social Security surplus in less than 3 
years, leaving none of these tax overpayments to return to taxpayers in 
the form of debt reduction, tax relief and Social Security reform. But 
our colleagues on the other side of the aisle do not say this increased 
spending is risky. They instead claim that our tax relief efforts to 
let the people keep a little more of their own money is risky.
  People today work hard, and then are penalized for their work. With 
punitive taxes, Washington makes the American dream of working hard for 
a better life more difficult, and for some, impossible. How can anyone 
call the elimination of the marriage tax penalty for 21 million 
American families risky?
  It is clear that the American people are still overtaxed despite the 
progress we have made to reduce taxes. Congress must provide meaningful 
tax relief to help alleviate the tax burden on working Americans.
  But the only way we can effectively push back Tax Freedom Day is to 
terminate the tax code and replace it with one that promotes tax 
freedom and economic opportunity. We must repeal the 16th amendment and 
abolish the IRS. We must create a new tax system that's fairer, 
simpler, and friendlier to taxpayers.
  Tax Freedom Day--it should be more than just another reminder of the 
high cost of Government. We owe it to the American taxpayers to work 
together to fix the system. Only when we begin to shorten the number of 
days that Americans work for Government, and allow them to own the 
fruits of their labor, can we truly celebrate Tax Freedom Day.

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