[Congressional Record (Bound Edition), Volume 152 (2006), Part 8]
[Senate]
[Pages 10645-10646]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          DISCUSSING TAX CUTS

  Mrs. CLINTON. Mr. President, in the wake of yet another contentious 
debate over the size and scope of the Republican tax cuts, I believe 
that it is high time that this Chamber engages in a serious discussion 
about the fiscal condition of our Nation and that Senators make an 
objective assessment of what the economic policies of the last 5 years 
have wrought on our Nation's long-term economic security. It is 
critically important that we realize that every tax cut we debate or 
enact today, will have a cost for workers and future generations down 
the road. Despite the best wishes of some Senators, there is no such 
thing as a tax cut that pays for itself and the fiscal profligacy

[[Page 10646]]

of the last few years will have a dramatic effect on the economic 
opportunities for the next generation of Americans. Indeed, what has 
made this Nation great is only the result of the commitment of each 
generation of Americans to leave a country for their children and 
grandchildren that was a little better than they found it. We need to 
ask whether our economic choices today will enable us to fulfill that 
commitment.
  A recent article in U.S. News and World Report magazine has clearly 
laid out what is at stake with the fiscal decisions that we have made 
and will continue to make in the months and years to come. Therefore, I 
ask unanimous consent that this article be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             [From U.S. News and World Report, May 1, 2006]

                         Playing Fair on Taxes

                       (By Mortimer B. Zuckerman)

       Millions of Americans breathe relief at having filed their 
     tax returns. Once again they were face to face with the 
     complexities of compliance, which is why the average American 
     family spends about 26 hours on the task. Every 
     administration promises it will simplify the tax codes, but 
     60 percent of Americans still need professional help, at a 
     cost of $150 billion a year. They are not dummies. They are 
     busy, honest people who have to cope with grotesquely swollen 
     federal tax regulations. The number of rules has risen by 
     over 40 percent in the past four years, from 46,900 in 2000 
     to 66,498 last year. Is there anyone, really, who can figure 
     out the complicated and tricky alternative minimum tax? 
     Designed to stop rich people from claiming too many 
     deductions, it now ensnares millions of middle-class 
     families.
       There is no point in expecting Congress to simplify the tax 
     code. Why? Because congressmen need lobbyists to get elected, 
     which means they need millions of dollars, and the lobbyists 
     are intent on inventing new complexities to give tax breaks 
     to well-connected companies and individuals or for 
     fashionable public crusades.
       Even more lamentably, Congress, over the past five years, 
     has diminished the progressivity of our tax system, which has 
     always required richer people to pay a higher rate than 
     poorer ones. A progressive tax has long supported an 
     expanding middle class and should provide the greatest 
     rewards for the people who work hardest. But the Bush tax 
     cuts have made it less so.
       The 2001 income tax rate cuts and the 2003 capital-gains 
     and dividends cuts have lowered the average tax rate for the 
     richest one tenth of 1 percent of Americans by 3.8 percent 
     but reduced taxes just .03 percent for the bottom 20 percent. 
     Of the tax savings on investment, the lion's share--more than 
     70 percent--went to the top 2 percent. Of the 90 percent of 
     taxpayers who make less than $100,000, only 14 percent 
     benefited from the dividend-tax cut and only 5 percent from 
     the capital-gains-tax cut. People who own stocks hold them in 
     retirement accounts, which are ineligible for investment 
     relief, and when withdrawn, the profits are reduced by the 
     higher rate applied to wage earnings.
       In this way, the tax burden on the richest has been reduced 
     to where those who earn $10 million or more pay at a lesser 
     rate than those who earn between $500,000 and $1 million. 
     (And the top 400 pay at an even lower rate!) In part, that's 
     why the share of income going to the top 1 percent of 
     Americans has jumped from 9 percent to 14 percent of our 
     national income, an increase of 50 percent. It is 
     inequitable, reprehensible, absurd, and unfair. Is it any 
     wonder that an NBC News/Wall Street Journal poll last year 
     found that most Americans, 54 percent, believed the Bush tax 
     cuts weren't worth it?
       Class warfare? Yes, these cuts have helped stimulate the 
     economy. But they have also turned the impressive fiscal 
     surplus when President Clinton left office into a long-term 
     budget deficit now trillions of dollars, of which about 60 
     percent can be attributed to the ``Bush effect.'' These 
     deficits are mortgaging workers'' future pay gains to fund 
     baby boomers' retirement payments.
       And they're being financed with borrowed money, which will 
     have to be repaid, with interest, by taxpayers of the future. 
     All of this as we face an aging population that will drive up 
     the cost of government retirement programs with serious 
     consequences for our future living standards in the form of 
     higher taxes or lower benefits. Social Security will provide 
     less of a safety net; Medicare will not be able to guarantee 
     healthcare to older Americans; and Medicaid will no longer be 
     able to help the poor.
       The tax cuts on investment income should not be extended 
     after they expire in 2010. One argument in favor of keeping 
     the cuts in place is that eliminating them would hurt 
     economic growth. Yet, when President Clinton raised the 
     marginal rate on high incomes, the opposite occurred: 
     Unemployment dropped without causing inflation; productivity 
     and growth accelerated to levels not seen since the 1960s, 
     and the budget deficit was converted to an impressive 
     surplus. Government borrowing stopped draining the capital 
     markets, freeing up money for private investment.
       Nor can it be said that taking these new tax cuts from the 
     wealthy would amount to class warfare. It is hardly class 
     warfare to suggest that some of the $750 billion a year that 
     the top 10 percent of income earners are taking in now should 
     go to sustain the fiscal health of the country and the 
     expansion of our middle class and to maintain America as a 
     true land of opportunity.
       Remember that job security, private pensions, and employer-
     provided healthcare coverage are being cut back. Remember 
     that there is significant erosion in public services such as 
     schools, colleges, transportation, health, recreation, and 
     job training. Understand why large numbers of people in our 
     society are feeling increasingly vulnerable. It is time to 
     redress the balance.

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