[Congressional Record (Bound Edition), Volume 150 (2004), Part 2]
[House]
[Page 1512]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       AMERICAN MIDDLE-CLASS TAX

  Mr. BLUMENAUER. Mr. Speaker, listening to the President's State of 
the Union speech and the Republican leadership in Congress, I have been 
struck by the false choices and misplaced priorities that have been 
presented to the American public.
  We heard pledges from the Presidential candidates on the campaign 
trail in the year 2000 to save the Social Security surplus and put it 
in a lockbox.
  The reality of the President's 2005 budget proposal is that he feels 
it is more important to reward those who need help the least, instead 
of correcting, for example, the looming crisis in Social Security. 
Perhaps, a cynic would say, because it does not explode until after the 
expiration of the next Presidential term.
  Rather than protect future retirements for American workers, this 
administration would instead borrow more from the Social Security trust 
fund to finance tax breaks for people who already have gained the most. 
But the most disingenuous, insidious, and destructive of all of these 
policies to American middle-class families is the refusal to deal with 
the alternative minimum tax, which has become a cruel penalty on middle 
America.
  This tax was established 35 years ago after a study revealed that 
there were 155 people who paid no Federal income tax at all despite 
having an annual income, in today's dollars, of over a million dollars. 
This led to the alternative minimum tax passed in 1969. It was designed 
to ensure that a few ultra-rich people at least paid something. This 
alternative minimum tax, the AMT, has now morphed into a money-raising 
bonanza for the Federal Government and a nightmare for middle America.
  Because it was never indexed for inflation, more people pay this 
every year, people who were never designed to be subjected to it. 
Congress now uses these tax revenues to finance other tax cuts for more 
privileged people. The goal of the administration and the Republican 
Congress is to make dividend and investment income tax free, 
inheritances tax free.
  As recently as 1997, less than 1 percent of the American tax payers 
were subjected to the alternative minimum tax. Because of inflation, 
rising incomes, and added gimmicks to the tax system, today, almost 
2\1/2\ million families pay the AMT. By 2005, we will have five times 
as many people, over 12 million families; by 2010 over 33 million 
American families are going to be providing half the Federal income tax 
through the alternative minimum tax. By 2013, 10 years from now, 37 
percent of all taxpayers, 41 million families, will pay it.
  The tragedy is that instead of catching a few who avoid paying taxes, 
the alternative minimum tax is specifically penalizing hard-working 
families who are doing exactly what government and this administration 
ask. Rather than strike people who avoid paying taxes, the alternative 
minimum tax penalizes families who are because they pay high local 
property and income taxes. It penalizes people with children who take 
advantage of the child care deductions and family credits. It penalizes 
those who save for their own future with 401(k) or other tax-deferred 
programs. These things trigger the alternative minimum tax for doing 
exactly what people are asked by this government to do.
  Finally, many people are going to pay more to a CPA to make complex 
calculations than the tax itself will cost them, thus a double tax 
penalty.
  Where is the outrage from this administration and from the Republican 
leadership in Congress about this disaster that is befalling American 
families? They claim that they are for tax fairness and justice, yet 
they are addicted to the Federal Government raising revenues unfairly 
while they are cutting taxes for people whose taxes have already been 
cut and who need the help least of any Americans.
  Federal taxes overall as a percentage of government spending are at 
the lowest level of national income since the 1950s; but they are being 
shifted. Because of the policies of my Republican friends in Congress 
and this administration, they are being shifted to America's hard-
working families who deserve better.
  There ought to be no more talk about tax cuts for the most well-off 
until we fix this nightmare. The failure to address the alternative 
minimum tax makes a mockery of alleged concern for middle America, for 
families, and for tax fairness.

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