[Congressional Record (Bound Edition), Volume 149 (2003), Part 6]
[House]
[Pages 7420-7421]
[From the U.S. Government Publishing Office, www.gpo.gov]




    TAX CUTS AND SPENDING PRIORITIES NEED NOT BE MUTUALLY EXCLUSIVE

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Connecticut (Ms. DeLauro) is recognized for 5 minutes.
  Ms. DeLAURO. Mr. Speaker, when the House considered the Republican 
budget last week, there was a lot of debate regarding whether the 
President's tax cut proposal was coming at the expense of other 
obligations, obligations to pay for child care, for public schools, 
college loans and nutrition programs that help children get a good 
start in life.
  Lost in the argument was the fact that nearly everyone in this body 
is for tax cuts in some form. Our differences are about who these tax 
cuts go to. Who needs them and why. Tax cuts and our spending 
priorities need not be mutually exclusive.
  But who do the tax cuts in the President's dividend tax plan go to? 
By and large, no matter how we look at it, they go to Americans who do 
not need them. Specifically, two-thirds of the benefits of the tax cut 
would flow to the top 5 percent of the population. That is individuals 
with an average income of about $350,000 per year. The top 1 percent of 
people who, on average, have an average income of $1 million, this is 1 
percent of tax filers, they would receive 42 percent of the benefits; 
and people with incomes that exceed $3 million would receive nearly a 
quarter of the tax cut benefits. The top 2 percent of tax filers would 
receive nearly as much from this tax cut as the bottom 90 percent of 
all tax filers combined.
  How much is that exactly? Well, millionaires could receive up to 
$90,000 in a tax cut. But if one's income is between $40,000 and 
$50,000, people who could really use a tax cut, they would receive an 
annual average benefit of $84; and people with incomes between $30,000 
and $40,000 would receive only $42.
  Mr. Speaker, I think most of us recognize those who pay more into the 
system will get more out of the system, but a $42 tax cut for some and 
a $90,000 tax cut for others is simply beyond all reasonable bounds of 
proportion and fairness, particularly in this economy when these tax 
cuts mean that vital services are being reduced at a time when so many 
families are struggling to make ends meet. $42 will not go far for a 
family worrying about paying the rent or putting food on their table. 
At the very least, we have an obligation to do something for these 
families.
  Mr. Speaker, that is why I offered an amendment during the Committee 
on the Budget markup to expand the child tax credit from $600 to $1,000 
per child, to make it available to low-income families with children 
who are currently not eligible because they do not pay enough in 
Federal income tax to qualify for the full credit. They pay taxes, they 
pay payroll taxes, State taxes, local taxes, and excise taxes, but they 
do not pay enough in Federal income tax. My amendment would have built 
on the President's tax plan to help working families, while at the same 
time stimulating the economy.
  As a matter of fact, the President's tax plan includes a proposal to 
increase the child tax credit to $1,000 per child for some families. In 
fact, he allocated $7.4 billion for this purpose in fiscal year 2003. 
But, today, 20 million children will not receive the full increase, 
including 10 million who will not receive any increase at all, because, 
as I have said, these families do not pay enough in income taxes to 
have the credit count.
  I want to be clear, these working families do pay taxes. They pay 
FICA, payroll taxes, State and local taxes, excise taxes, all of which 
place a far heavier burden on those with the lowest incomes. This is 
not an issue of income redistribution. Even taking into account the 
Earned Income Tax Credit, about two-thirds of low- and moderate-income 
families with children still face a net tax burden. They deserve to 
receive the full amount of this tax credit.
  Over three-quarters of these children are in working families who are 
struggling to make ends meets. The President's proposal will also leave 
out about one-half of African American children and over 40 percent of 
Hispanic children.
  My amendment would have reaffirmed President Bush's proposal to 
increase the child tax credit to $1,000, but it would make the credit 
fully refundable so every single eligible family could benefit from it.
  In addition to being the right thing to do for working families, this 
tax cut would stimulate our economy, which continues to flounder. Only 
about one-fourth of the $300 rebate in the last tax cut were put back 
into the economy. The rest was saved. Giving tax cuts to families who 
would spend the money immediately, typically low- and middle-income 
families, would be the best stimulus we could give to our economy right 
now.
  This proposal would have been offset by reducing other aspects of the 
President's tax plan, such as the dividends tax cut which, as I have 
said, would give nearly two-thirds of its benefits to the top 5 percent 
of the population. The top 5 percent with average incomes of $350,000 
do not need another tax cut.
  Mr. Speaker, this week is being touted as a week to focus on our 
children. We should take this opportunity to provide relief to families 
who need it the most. When this body takes up the tax cut legislation 
next week, the least we can do is consider the working families who are 
the backbone of our economy.

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