[Congressional Record (Bound Edition), Volume 148 (2002), Part 1]
[Extensions of Remarks]
[Pages 864-865]
[From the U.S. Government Publishing Office, www.gpo.gov]




    PRESIDENT BUSH INSISTS ON MORE TAX CUTS FOR THE WEALTHY EVEN AS 
  ECONOMISTS SHOW THAT THE RICH ARE GETTING RICHER AND PAYING LESS IN 
                                 TAXES

                                 ______
                                 

                           HON. GEORGE MILLER

                             of california

                    in the house of representatives

                       Thursday, February 7, 2002

  Mr. GEORGE MILLER of California. Mr. Speaker, I would encourage 
Members of the House and all Americans to pay attention to two very 
disturbing stories this week that illustrate the tremendous burdens on 
working families that this Congress continues to fail to address.
  Yesterday, the House voted a symbolic and politically motivated 
resolution upholding the grossly unfair and deficit-producing tax 
windfall for wealthy Americans that President Bush pushed through 
Congress last year. Over the course of that year, the economy has 
faltered, millions have lost their jobs or significant parts of their 
income, and we have rearranged our spending priorities because of the 
need to combat terrorism. Despite all of this, however, Washington 
still will not reconsider whether we should spend a trillion and a half 
dollars in tax cuts mainly aimed at the wealthiest Americans.
  That Bush tax law has exacerbated the growing inequality of incomes 
in America that has become an emblem of the Enron decade of the '90s. 
According to economist Edward N. Wolff of New York University, wealth 
in America is more highly concentrated today than at any time since 
1929.
  While the number of Americans earning over a million dollars more 
than doubled in the last half of the '90s, the percentage of their 
income that the wealthiest paid in federal income taxes actually fell 
by 11 percent, thanks to tax changes.
  Meanwhile, those who earned less paid more in taxes, according to the 
Internal Revenue Service.
  And now President Bush wants even more permanent tax cuts for the 
wealthiest Americans.
  Yet, while this House has time for legislation to expand tax cuts for 
the wealthiest, it has failed to pass legislation to benefit the 
millions or workers who have lost their jobs and exhausted their 
unemployment benefits. The Center for Budget and Policy Priorities has 
just released a report showing that two million working men and women 
will lost their unemployment benefits in the first half of this year 
alone, adding to hundreds of thousands who lost unemployment insurance 
benefits last year and tens of thousands more who were denied any 
benefits. As a result, the number of exhaustees who have been denied 
any additional weeks of benefits in the first quarter of this year is 
higher than in any other first quarter since the early 1970s. That is a 
crisis that the federal government can and should respond to but has as 
of now failed to do so.
  Mr. Speaker, these are very, very disturbing trends: more wealth for 
the wealthiest, and more tax cuts for wealthiest; growing income 
disparity and higher taxes for the middle class working family; no 
extended benefits for the unemployed and no coverage for millions of 
workers who paid into unemployment insurance but got no benefits when 
they lost their jobs.
  The federal government spend tens of millions of dollars trying to 
instruct people overseas how to build democracy in their countries, and 
one of the basic lessons we teach them is that you cannot build 
political democracy without economic justice. Frankly, the policies of 
this Congress are so inconsistent with any concept of economic justice 
that we should be concerned about the effect on our own democracy.
  Attached is an article from today's New York Times.

                [From the New York Times, Feb. 7, 2002]

                  More Get Rich and Pay Less in Taxes

                        (By David Cay Johnston)

       The number of Americans with million-dollar incomes more 
     doubled from 1995 through 1999, as their salaries and their 
     profits from stocks soared, government figures to be 
     published today show. The percentage of their income that 
     went to federal income taxes, however, fell by 11 percent. 
     The incomes of Americans who made less grew as well, though 
     by far less, and the share of their income that went to taxes 
     rose slightly, according to Internal Revenue Service income 
     tax data for the five years through 1999, the latest year 
     available. The wealthiest Americans paid a smaller share of 
     their income in taxes because in 1997 Congress reduced taxes 
     on capital gains, which account for a significant share of 
     their income.
       Congress also cut taxes for the middle class, but only one 
     in five taxpayers qualified for those cuts, which involved 
     new tax credits for children and education expenses. So, as a 
     group, the portion of their income

[[Page 865]]

     going to taxes rose. For those with million-dollar incomes, 
     the share of their income that went to taxes fell to 27.9 
     percent in 1999, from 31.4 percent in 1995. For those 
     Americans who did not make a million dollars, the portion of 
     their income going to taxes edged up in those years, to 12.8 
     percent from 12.5 percent. About 205,000 taxpayers made $1 
     million or more in 1999, up from less than 87,000 in 1995. 
     The average income of those who made $1 million or more rose 
     by $568,000 to $3.2 million.
       Critics of the latest Bush administration economic stimulus 
     and tax cut plan, announced this week, regarded the latest 
     figures as evidence that the wealthy have received too many 
     breaks.
       ``Congress cut taxes on rich people in 1997,'' Robert 
     McIntyre, director of Citizens for Tax Justice, a nonprofit 
     Washington organization with labor union backing, said. ``The 
     rate that they pay fell by quite a bit, while they didn't do 
     much for everyone else and their taxes went up a little. The 
     law did what Congress intended. Their intent was to make sure 
     the wealthier people paid less in taxes and they weren't 
     worried about the rest of the people.''
       President Bush, who won a major tax cut from Congress last 
     year, and his supporters argue that permanent cuts in tax 
     rates encourage investment, which results in more jobs and 
     economic growth.
       ``We need to pass a bill that will help workers and help 
     stimulate the economy,'' Mr. Bush told reporters on Tuesday.
       The president's new tax cut plan appeared to die on Tuesday 
     when Senator Tom Daschle, Democrat of South Dakota and the 
     majority leader, moved to shelve it. Those making a million 
     dollars or more, just one of every 625 taxpayers in 1999, 
     more than doubled their slice of the nation's income to 11.2 
     percent that year, from 5.4 percent in 1995. These high-
     income taxpayers also captured a quarter of the nation's 
     total personal income growth from 1995 through 1999. The 
     incomes of taxpayers making less than $1 million also rose, 
     though not as sharply. The income of everyone making less 
     than a million dollars averaged $41,000 in 1999, up from 
     $33,500 in 1995, a 22 percent increase, the data, using 
     adjusted gross incomes, showed. The tax return data show that 
     the number of taxpayers reporting incomes of less than 
     $25,000 declined slightly, while those reporting incomes at 
     higher levels increased.
       William Beech, an economist at the Heritage Foundation in 
     Washington, which supports lower tax rates to foster economic 
     growth, said that these figures may be misleading in several 
     ways. The data fail to capture the growing number of the 
     working poor, and their meager incomes, because many of them 
     are immigrants who work off the books, he said.
       ``The reported income that the I.R.S. picks up from tax 
     returns reflects people who are making their way up the 
     economic ladder,'' Mr. Beech said. ``If we had fully accurate 
     reporting of income, we would see that within the poorest 
     fifth, the median income would be falling because of the 
     millions of people coming into the United States, who mostly 
     earn low incomes.''
       He also noted that among those who file income tax returns, 
     many of who appear poor may actually be retirees with 
     substantial investments. But they need only modest incomes 
     because their mortgages are paid off and their children are 
     grown.
       The stock market played a large role in creating more 
     million-dollar annual incomes, the figures show. Capital 
     gains over all more than tripled during the five years, with 
     almost three quarters of the increase going to those with 
     million-dollar incomes. The capital gains tax cut of 1997 
     appeared to favor the 400 richest taxpayers most of all. 
     Harvesting 7 percent of all capital gains in 1998, these very 
     rich Americans paid just 22 percent of their incomes in taxes 
     that year, down from 30 percent in 1994. Although more than 
     half of all families are investors in the stock market, 
     largely through 401(k)'s and similar retirement plans, wealth 
     in America is more highly concentrated today than at any time 
     since 1929, said Professor Edward N. Wolff, a New York 
     University economist.

     

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