[Congressional Record (Bound Edition), Volume 147 (2001), Part 7]
[House]
[Pages 9617-9618]
[From the U.S. Government Publishing Office, www.gpo.gov]



                          HISTORIC TAX RELIEF

  The SPEAKER pro tempore (Mrs. Biggert). Under a previous order of the 
House, the gentleman from Indiana (Mr. Pence) is recognized for 5 
minutes.
  Mr. PENCE. Madam Speaker, today we stand on the brink of an awesome 
opportunity, the opportunity to lift the burden of taxes off families, 
small businesses and family farms, the opportunity to pass the largest 
tax cut package in over 20 years. We have a moral obligation to act on 
this opportunity and remove Uncle Sam's hand out of the pockets of 
hard-working men and women.
  Under the current tax system, Madam Speaker, the average dual-earner 
family will pay more than $26,000 in taxes to the government. This 
equals out to be the first five months of their annual salary. This is 
more than the family will spend on food, clothing and shelter combined.
  Madam Speaker, we often talk about the progress we have made. Yet, 
according to the Washington-based tax foundation, taxes at all levels 
now consume 39 percent of the average dual-earners' family income. This 
is more than the amount that serfs were obligated to pay to their mid-
evil lords. This, simply put, is wrong.
  As we enter into the final stages of the bill's passage that is being 
debated in conference committee today, I implore the Congress to stand 
firm in our commitment to working families. The House bill was a great 
start, but it is the bare minimum of what we can and should accomplish.
  The decision to scale back tax relief over the next 10 years means 
that less than 25 percent of the surplus will be returned to taxpayers. 
Therefore, it is not only important, but imperative that we lower 
marginal rates on income if we are to improve the economy's lagging 
performance.

[[Page 9618]]

  It does not matter how you look at it, Madam Speaker; the tax burden 
is excessive and tax rates are too high. Now is the time for across-
the-board reductions in the rate of taxation.
  While some argue that a 3.5 percent reduction in the top tax rate is 
adequate for what ails our economy, history tells another story. 
Woodrow Wilson once said, ``The Congress might well consider whether 
the higher rates of income and profit taxes can in peace times be 
effectively productive of revenue, and whether they may not, on the 
contrary, be destructive of the business activity and productive of 
waste and inefficiency. There is a point at which, in peace times high 
rates of income and profit taxes discourage energy, remove the 
incentive to new enterprise, encourage extravagant expenditures and 
produce industrial stagnation with consequent unemployment and other 
attendant evils.''
  Woodrow Wilson was right. During the 1920s, Wilson's leadership led 
to massive tax rate reductions. Amazingly, revenues actually increased. 
This is a fact that continues to resurface throughout the taxation 
history of this country.
  The tax cuts which President John F. Kennedy passed in the 1960s 
ignited a huge economic expansion. The economy grew by more than 40 
percent and tax revenues climbed by more than 62 percent.
  The effects of the Reagan tax cuts, Madam Speaker, were just as 
impressive. The economy was pulled out of a severe downturn and a 7 
year economic boom of record growth took its place.
  During the 1980s, the goal of tax reformers on the left and the right 
was to reduce marginal rates as much as possible. At the beginning of 
the 1980s, the top marginal income tax rate was 70 percent; by the end 
it had fallen to just 28 percent. Support for low marginal tax rates 
was so widespread that virtually every major nation followed the United 
States and cut marginal tax rates in the 1980s.
  The reasoning behind this phenomenon is simple: If history has taught 
us anything, it is that a high top rate reduction seldom produces much 
revenue. The principal effect is to make higher taxes on the poor and 
the middle class more palpable. In fact, because of inflation and real 
growth in the economy, in just a few years tax rates originally imposed 
on the rich often apply to those with middle incomes. The rich, 
meanwhile, often evade higher rates by making increased use of 
deductions and other legal tax shelters. In short, Madam Speaker, 
higher rates tend to encourage the government to add new deductions to 
the already too-complex Tax Code.
  Tax relief, Madam Speaker, could not be a more bipartisan issue. 
President Franklin Roosevelt warned of an increase in rates when he 
said, ``Taxes are paid in the sweat of every man who labors because 
they are a burden on production and are paid through production. If 
those taxes are excessive,'' President Roosevelt said, ``they are 
reflected in idle factories, in tax-sold farms, in hordes of hungry 
people trampling the streets and seeking jobs in vain.''
  Madam Speaker, we must pass this tax relief for all Americans.

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