[Congressional Record (Bound Edition), Volume 147 (2001), Part 6]
[Senate]
[Pages 7942-7944]
[From the U.S. Government Publishing Office, www.gpo.gov]



                               TAX RELIEF

  Mr. CRAIG. Mr. President, today I join with several of my colleagues 
to talk about an issue that has dominated the Senate and the Congress 
of the United States for many months. That dominance, I think, has been 
shared in most of the minds of our American citizens as we have worked 
to complete a budget for fiscal year 2002. Tax relief is an important 
component of that budget and an important issue to the American people.
  As a matter of fundamental fairness, the most heavily taxed 
generation in America's history, in my opinion, deserves tax relief. 
There is plenty of room in this budget for tax relief. Listening to 
some of the speeches in this Chamber last week, one would assume we 
were dramatically cutting the budget of the American people in order to 
give some of that money back. That is simply not true.
  The budget resolution increases overall spending by about 5 percent. 
Important national needs will be met. We are taking less than a third 
of the total surplus--surplus tax dollars--to provide tax relief. 
Without question, there is room in this budget to provide tax relief to 
that overtaxed American consumer taxpayer and to adequately fund a 
budget for America's citizens.
  According to the Tax Foundation, May 3 was tax freedom day this year. 
In other words, the average working American had worked from January 1 
through May 3 just to pay his or her taxes. Said another way, on May 3, 
the American worker finally was beginning to put money in his or her 
pocket and provide money for the breakfast table of his or her family.
  The average American works the first 123 days--the first one-third of 
the year--to support the appetite of Government, and still we heard in 
this Chamber this past week the siren song saying that appetite was not 
big enough, that somehow it needed to grow ever increasingly larger.
  May 3 is the latest tax freedom day in the history of this country. 
Tax Freedom Day occurred as early as April 18 in 1992, before the 
record tax hike enacted in 1993. But from 1992 to now, another half-
month has been added to the amount of time the average worker is 
required to work just to meet his or her tax obligation.
  May 3 is actually a national average because, because it brings in 
the State and local tax burdens. In Idaho, for example, at least that 
burden is less than in other States, and Idaho's Tax Freedom Day fell 
on April 25, making its citizens the tenth least taxed group of 
citizens of any State in the Nation. There is no wonder Idaho is a 
fast-growing State. Somehow the word is out that if you live and work 
in Idaho, because of our attitudes about government and the way we 
manage our government in Idaho, and thanks to my colleague, our 
Governor, Dirk Kempthorne, who once served with us in the Senate, we 
tax citizens less, even though we provide adequate government for their 
needs.
  Americans have never been more heavily taxed than they are now. The 
average American family pays 37 percent of its income in all taxes at 
all levels, half again as much as our parents paid in the 1950s.
  Stop and think about that. Compare the wages, compare the cost of 
living, compare everything else then relative to now, and yet today 
taxes have dramatically increased, by about half, compared to our 
parents' generation.
  No wonder the personal average savings rate in America is now a 
negative 1 percent. Government is taking away what the people otherwise 
would save - what they would save for their retirement, for their 
children's education, for their parents' care, or to build a better 
standard of living. Oftentimes we hear economists analyze the negative 
savings rate in our country compared with other nations of the world, 
and they say: It is a matter of culture. Certain nations have a culture 
of savings.
  My suggestion to our citizens is this: If you were granted the 
opportunity or the incentive, my guess is you would be saving a great 
deal more than you are saving now. When you are paying 37 percent of 
your income for taxes at all levels, you simply have less to live on, 
less to save, and, therefore, you are using more of what you have for 
necessities.
  The total Federal tax take this year will be 20.7 percent of the 
total economy. In other words, 20.7 percent of the gross domestic 
product of this country is required to pay for Government, the highest 
level ever, except for one year, 1944. Of course, we can all remember 
where the nation was in 1944. We were at the peak of World War II. We 
had committed this country to saving the world and saving the free 
world from

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tyranny and knocking down the powers of fascism. We had committed all 
of our resources to doing that. Only at that time, compared with now, 
did we have comparable tax burdens.
  In fact, in the six years of highest taxes in American history, two 
fell during World War II and the other four have been the most recent 
four.
  Where is the war today? Are we committed to saving all of the world 
from the direct threat of a powerful enemy of the kind we saw in World 
War II? That is not at all the case. Simply, our Government's domestic 
appetite has dramatically grown from 1944 to today, and as a result of 
that, our hard-working Americans have fallen victim to that appetite.
  Can anyone seriously claim that the Federal Government is now engaged 
in a life-and-death struggle, compared to World War II? I don't think 
so. Oh, we have a lot of problems to solve and challenges to meet. 
There is no doubt about it. We are attempting to address them. On the 
floor this week we are debating education and are committed to putting 
a substantial increase in Federal funding into what is a traditional 
State and local funding priority, to help enhance the ability of State 
and local educators and education-providers to improve the conditions 
under which our children learn.
  Still, on top of all that, we have the opportunity to provide the tax 
relief that will go a long way toward helping our economy and freeing 
the American people.
  The new budget provides for paying down more than $2.4 trillion worth 
of debt in the next 10 years. Some Senators said we are going to give 
all the money back to the taxpayers, that we are not going to deal with 
the debt. Somehow in the midst of all this debate, somebody did not 
look at the plain numbers in the budget resolution to recognize that, 
if we stay this course, over the next 10 years we are paying down $2.4 
trillion of that debt. That is nearly twice the amount of tax relief 
that is in the budget and 50 percent more in debt relief than in the 
amount of tax relief requested by the President.
  So we clearly will have more debt paid down than tax relief. But in 
the balance of both, my guess is Alan Greenspan is going to say: ``Good 
job. That means Government will not grow larger. That means the 
appetite of Government has been curtailed. That means a freeing up of 
the domestic productive economy of this country, which means that 
monetary policy and fiscal policy are a good deal more in synch.''
  This Senator is glad we are paying down the debt. I hope in my time 
of service here I can turn to my children and grandchildren and say: Of 
all the things my generation and I have not done for you, there is one 
good thing we did do for you in my lifetime, and that was to rid our 
country of debt and therefore to rid you of your obligation as current 
and future taxpayers of having to respond to that debt by a very large 
chunk of your tax dollars being consumed by it. That ought to be the 
responsibility and obligation of my generation. Clearly, we have set a 
course with this budget and this budget resolution for doing so.
  I think we have to go even further than that. The budget already 
calls for paying down debt at a fast pace - the fastest pace at which 
the debt can be paid down.
  The budget includes overall spending increases of about 5 percent. 
Frankly, in my State of Idaho, folks are not so sure why Government 
should grow at all, that 5 percent is maybe even too large. There is no 
question there are some very real needs out there. We are going to meet 
some of those needs. At the same time, it is important to recognize we 
can in fact give tax relief and pay down debt.
  This year's tax relief will only be about 5 percent of total revenues 
over the next 10 years. It will be about one-half of President John 
Kennedy's tax cut, adjusted for the times and the size of the economy. 
Yet we hear people now suggesting this is a devastating tax cut, that 
this simply destroys the revenue flow of Government. Yet in another 
era, another time, comparing economies in a fair way, the Kennedy tax 
cut was nearly double the one we are dealing with today.
  This year's tax relief will be about a third of the package that was 
enacted under President Ronald Reagan. Yet of course it was the Ronald 
Reagan tax cut that fueled the booming economy of the late 1980s.
  The PRESIDING OFFICER. The Senator has reached 10 minutes.
  Mr. CRAIG. Mr. President, let me wrap up. With the passage of the 
budget resolution, and now with the beginning of the work of the 
Finance Committee to produce a tax bill, we are clearly receiving the 
message from the American people. We are acting on their goal for us, 
to deliver back to them in both the immediate and long term, some tax 
relief--to offer up to them the right--government may act like it is a 
privilege, but it is a right to keep a little more of their own, hard-
earned money.
  Now is the time to stop the government tax man from being the 
uninvited guest at every wedding, the unwelcome intruder at family 
funerals, and the rude bill collector at every graduation. Maybe, just 
maybe, next year's Tax Freedom Day will come not in May but in April 
once again. If that is true, we will have accomplished a great deal 
more than anyone thought we could, not too long ago.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. ALLARD. Mr. President, I join my colleagues to talk a little 
about taxes this week since we are expected to bring up some tax relief 
legislation here the latter part of this week. I think it is time for 
us to remember that tax freedom day was May 3 of this year. This is the 
latest it has ever been.
  What does that mean? It means the average American family will work 
the first 123 days of the year to pay the combined tax bill from all 
levels of government. That is Federal, State, and local. Obviously, the 
Federal bite out of the family's budget is the largest of all three of 
those. I hope I have time to get into a little more detail on that. But 
certainly it is time for a tax cut.
  We frequently discussed the budget surplus, but I think it is more 
accurate to refer to it as a tax surplus. The tax surplus represents an 
overpayment by taxpayers and should be refunded to those who overpaid. 
Tax cuts will benefit all Americans by making the economy stronger. Low 
taxes help reward work, savings, and investment. Low taxes provide the 
fuel for our economy to create new jobs and raise our standard of 
living. I think it is reasonable to conclude if we raise taxes, just 
the opposite is going to happen.
  In today's economy, it would be ill advised if we did not make a 
sincere effort to cut taxes. This allows people to keep their own money 
and helps our economy. It makes sense. People are in a better position 
than the Government to know what they believe. I believe in the 
people's priorities instead of Washington's priorities.
  This tax cut we are going to be talking about is real money that can 
be used for things such as helping to buy a home, helping to pay for a 
college education, or help in purchasing a computer to help the kids 
through school so they can learn math and become more proficient in 
English. Some have attempted to shift the focus on tax cuts by claiming 
we cannot afford tax cuts. In fact, tax cuts do not jeopardize debt 
repayment or the Government's other obligations.
  I would like to take a moment to look at that. The budget that has 
been proposed now allows the Government to return a major portion of 
the surplus to its rightful owners, the taxpayers. It continues to pay 
down our national debt, and it continues to protect Social Security and 
Medicare surpluses. The Congressional Budget Office forecasts the 10-
year surplus is large enough to allow the Federal Government to retire 
all available debt held by the public.
  I would like to refer my colleagues to my efforts over the past 4 
years. Four years ago, I introduced legislation to pay down the debt in 
30 years. Then I looked at the amount of revenue that

[[Page 7944]]

was coming into the Federal Government, part of this tax surplus, and I 
determined 2 years ago we ought to be able to pay down this debt within 
a 20-year period. So I introduced legislation to pay down the debt 
within 20 years. This year, we are looking at paying down the debt in 
10 years and still being able to provide for a $1.6 trillion tax cut.
  The Congress has backed off on what was originally proposed by the 
President and finally agreed on somewhere between $1.35 and $1.4 
trillion in tax cuts. Certainly we have allowed ourselves plenty of 
margin.
  The tax bill that is supposed to be coming to the Chamber contain 
many important provisions. Many of them have been referred to by the 
President. First, the tax rates are lowered across the board. This will 
benefit Americans in all categories who pay taxes. This year, taxpayers 
will get immediate relief when the 15-percent rate is lowered to 10 
percent on a significant portion of that income.
  The tax bill also lowers the top rate significantly, increases the 
child tax credit, provides tax relief for education expenses, and 
eliminates the death tax.
  I am particularly pleased to support repeal of the death tax.
  The United States retains among the highest estate taxes in the 
world, and top estate tax rates can reach over 55 percent. This is 
money that was already taxed when it was earned.
  The estate tax can destroy a family business. This is the most 
disturbing aspect of the tax. No American family should lose its 
business because of the estate tax.
  Similarly, more and more large ranches and farms are facing the 
prospect of breakup and sale to developers in order to pay the estate 
tax.
  We feel it acutely in Colorado, especially because of the rapid 
growth and demand for real estate in Colorado.
  One change which is not included is a reduction in the capital gains 
tax. I hope that this can be added to this tax bill or one later in the 
year. This change would actually increase revenue to the Treasury.
  I support a reduction in the top rate from 20 to 14 or 15 percent. I 
also believe that we should include indexing so that taxes are paid 
only on real capital gains, not those which result only from inflation.
  In 1997 we reduced the capital gains tax from 28 to 20 percent.
  Many of you will recall the debate over whether this would raise or 
lower revenues. We now have the answer--revenues from capital gains 
increased dramatically after the rate cut.
  In fact, in just the 4 years since the rate cut, 1997 through 2000, 
the Government has received $200 billion more capital gains revenue 
than forecast before the rate cut.
  That is $200 billion of added revenue in just 4 years.
  I think the Tax Foundation does some very good work. I have been 
looking at a chart that was put out by the Tax Foundation.
  From 1992 until the year 2001, we actually see a large spike in rates 
of increases for taxes and the total tax revenues that are being paid 
to the Federal Government.
  We see the tax burden days go from April 18 to May 3--within a period 
of a little less than a decade. I think this is a phenomenal amount of 
revenue increase that has come from working Americans.
  Of the 123 days that America spends laboring for Federal, State, and 
local taxes, it is interesting how this breaks out. Fifty days of that 
goes toward individual income taxes, 42 days goes to Federal and State, 
and for local it is 8 days.
  For social insurance taxes, 29 days goes to that category. And all of 
that is Federal. There is no State or local part in that aspect of the 
tax.
  Of the 123 days, 16 days go toward sales and excise taxes. Three days 
of that is allocated toward Federal and 13 days is allocated toward 
State and local. Property taxes--the Federal Government has no property 
taxes, but State and local governments do. Ten days out of that 123 
days goes for property taxes for State and local governments.
  Let's look at the corporate box that has been analyzed by the Tax 
Foundation. Corporate income taxes make up 12 days of the total of 123 
days. The Federal part of it is 10 days and the State and local part of 
it is 2 days.
  If we look at other business taxes, there is a total of 3 days put in 
that category. The Federal Government doesn't have any, but State and 
local has a total amount of 3 days. For all other taxes is that general 
category. There are 2 days allocated to that box. One of them is 
Federal and one is State and local.
  I think those are some interesting factors coming out.
  Then there are those who say the tax cut is way too much. We know 
what happens.
  If we go with the President's tax cut that he proposed--I remind the 
Senate that it hasn't gone as much as the President proposed--then 
basically what you are doing over the next 9 or 10 years is holding the 
tax burden day on May 3, 2001.
  What happens if we don't have any tax cuts? Suppose we didn't go with 
any tax cut at all? We would see the tax freedom day move out to May 9. 
This is not a particularly remarkable tax cut, but it is something that 
certainly is badly needed.
  I am looking forward to the debate because I think it is very 
important that we move forward with the tax cut right now. If my memory 
serves me correctly, we have raised taxes retroactively. I don't see 
what the problem is with trying to cut taxes retroactively, 
particularly in light of the fact that we have the surpluses we are 
facing today.
  In summary, Americans are spending more than ever on taxes. In fact, 
we now pay more taxes than we do for food, shelter, and clothing 
combined. Since when did the Federal Government become more important 
than life's essentials? It is time to reverse this trend by cutting 
taxes across the board. Lower taxes would help our economy and would 
also help America's families.
  Thank you, Mr. President.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.

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