U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

64–349—PDF 2009

S. HRG. 111–864 

THE MIDDLE -INCOME TAX RELIEF QUESTION: 

EXTEND, MODIFY, OR EXPIRE? 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

THURSDAY, MARCH 26, 2009 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

KENT CONRAD, North Dakota 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

BLANCHE L. LINCOLN, Arkansas 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

CHUCK GRASSLEY, Iowa 

ORRIN G. HATCH, Utah 

OLYMPIA J. SNOWE, Maine 

JON KYL, Arizona 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

JOHN ENSIGN, Nevada 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

RUSSELL SULLIVAN, Staff Director 

KOLAN DAVIS, Republican Staff Director and Chief Counsel 

(II) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee 

on Finance ............................................................................................................ 1 

Grassley, Hon. Chuck, a U.S. Senator from Iowa ................................................. 2 

WITNESSES 

Taylor, Paul, executive vice president, Pew Research Center, Washington, 

DC .......................................................................................................................... 5 

Yin, George, Edwin S. Cohen distinguished professor of law and taxation, 

University of Virginia, School of Law, Charlottesville, VA .............................. 6 

Greenstein, Robert, executive director, Center on Budget and Policy Priorities, 

Washington, DC ................................................................................................... 8 

Viard, Alan, resident scholar, American Enterprise Institute, Washington, 

DC .......................................................................................................................... 10

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Baucus, Hon. Max: 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 29 

Grassley, Hon. Chuck: 

Opening statement ........................................................................................... 2 

Prepared statement .......................................................................................... 31 

Greenstein, Robert: 

Testimony .......................................................................................................... 8 

Prepared statement .......................................................................................... 33 

Responses to questions from committee members ......................................... 42 

Nelson, Hon. Bill: 

‘‘No Pity for Rich Tax Cheats,’’ Wall Street Journal article by Martin 

Vaughan, February 11, 2009 ........................................................................ 47 

Taylor, Paul: 

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 50 

Responses to questions from committee members ......................................... 63 

Viard, Alan: 

Testimony .......................................................................................................... 10 

Prepared statement .......................................................................................... 67 

Responses to questions from committee members ......................................... 79 

Yin, George: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 83 

Responses to questions from committee members ......................................... 92 

(III) 

(1) 

THE MIDDLE-INCOME TAX RELIEF QUESTION: 

EXTEND, MODIFY, OR EXPIRE? 

THURSDAY, MARCH 26, 2009 

U.S. SENATE, COMMITTEE ON FINANCE, Washington, DC. 

The hearing was convened, pursuant to notice, at 10:03 a.m., in 

room SD–215, Dirksen Senate Office Building, Hon. Max Baucus 

(chairman of the committee) presiding. 

Present: Senators Wyden, Nelson, Menendez, Carper, Grassley, 

and Snowe. 

Also present: Democratic Staff: Bill Dauster, Deputy Staff Director and General Counsel; Cathy Koch, Senior Advisor, Tax and Economics; Tiffany Smith, Tax Counsel; and Kelcy Poulson, Tax Research Assistant. Republican Staff: Mark Prater, Deputy Chief of 

Staff and Chief Tax Counsel; Nick Wyatt, Tax Staff Assistant; Jim 

Lyons, Tax Counsel; and Grant Menke, Staff Assistant. 

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR 

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The committee will come to order. 

In his work entitled, ‘‘Politics,’’ Aristotle wrote: ‘‘The best political community is formed by citizens of the middle class.’’ What 

was true in Aristotle’s analysis has proven all the more true in 

America. America’s great strength lies in the broad American middle class. 

In 2001, this committee led the way to easing the tax burdens 

of the American middle class. Now, there have been different views 

about the 2001 tax cuts, but, whatever differences there have been, 

there is pretty wide agreement that working families have welcomed the relief. Tax cuts like the Child Tax Credit, the lower 

middle-income tax rates, and marriage penalty relief have helped 

working moms and dads to pay the bills and raise their families. 

For example, in 2001 we increased the Child Tax Credit from $500 to $1,000 per child. Then we also made the credit partially 

refundable so that working families can get some money back. In 

2001, we provided marriage penalty relief. That way a married couple does not get penalized with higher taxes when they take their 

wedding vows. 

But on the horizon, we have a challenge. Those tax cuts, and a 

lot of other ones, expire at the end of 2010. Allowing these tax cuts 

to expire would mean a drastic tax increase for tens of millions of 

American families. Pretty soon we need to decide which of these 

tax cuts to make permanent. 

2 

* For more information, see also, ‘‘Present Law Related to the Individual Income and Social 

Insurance Taxes as in Effect for 2009 and Background Data Related to the Distribution of Federal Taxes,’’ Joint Committee on Taxation staff report, March 24, 2009 (JCX–21–09), http:// 

www.jct.gov/publications.html?func=startdown&id=1687. 

On top of that, we have the ever looming Alternative Minimum 

Tax. The AMT creeps forward every year, snaring more and more 

taxpayers in its grasp. The AMT was meant to make sure that 155 

wealthy taxpayers paid their fair share, but now it ensnares millions of middle-income families. Frankly, the AMT fills many taxpayers with dread. People have to calculate their taxes under the 

regular tax system, and then they have to do it again under this 

alternative system. They have to worry about whether this will be 

the year that they fall prey to AMT. 

Over and over again, Congress has passed a 1-year fix. The fix, 

also known as the AMT patch, is holding the number of taxpayers 

subject to the tax at just over 4 million; without the fix, more than 

26 million taxpayers will be paying higher taxes. 

Another question is: who are these middle-income taxpayers? 

People throw the term ‘‘middle class’’ around a lot, but different 

people have different ideas about who is included. Judith Martin, 

who has long written the ‘‘Miss Manners’’ column, once said, 

‘‘There are three social classes in America: upper middle class, middle class, and lower middle class.’’ 

Today we will hear some thoughts about just who is in the middle class. We will hear about how the middle class has fared over 

the last few decades. In particular, we will hear how they have 

fared over the last couple of years, and we will hear about how our 

tax laws affect the middle class. We will discuss the temporary nature of several other tax provisions and will consider whether some 

of these provisions should be made permanent. 

Today I am introducing a bill to make the middle-income 2001 

tax cuts permanent. My bill would make permanent the middleincome tax rates—the Child Tax Credit, marriage penalty relief in 

the 2001 tax law, for example—and I am very hopeful that we can 

move legislation along these lines this year. 

And so let us examine ways to help the great strength of America, let us look for ways to continue tax relief for the broad American middle class, and let us see how we can extend these welcome 

tax cuts for America’s working families.* 

Senator Grassley? 

OPENING STATEMENT OF HON. CHUCK GRASSLEY, 

A U.S. SENATOR FROM IOWA 

Senator GRASSLEY. Thank you, Mr. Chairman. 

I want to say, first of all, to the chairman as well as to our distinguished panel, this is the only day of the year that the Budget 

Committee puts out a document. There are a lot of amendments. 

I am a member of that committee, so I probably will not be around 

here a long time to listen to everything. I hope you will appreciate 

that fact. 

3 

The answers that we eventually come to in responding to questions that we are asking in this hearing will, in part, determine 

whether the United States is able to continue to rely on the spirit 

and ingenuity of a dynamic middle class, or if the middle class is 

to be shredded by the tax code and parceled out to fund corporate 

welfare and welfare benefits for people who do not pay income 

taxes. 

Under current law, Americans will be subject to the largest tax 

increase in history in 2011 if Congress does nothing. In other 

words, without a vote of Congress, we will have the largest tax increase in the history of the country. 

I have a chart I would like to show here of the impact that this 

could have on a family of four with $50,000 in annual income. They 

will be subject to a tax increase of $2,300. The next chart shows 

the tax increase faced by a single-parent household with two kids 

and $30,000 in income, which is $1,100. So I think it is pretty clear 

what is at stake here, keeping in mind that these tax increases are 

only what is now built into current law. They do not include items 

in the President’s budget, like the cap-and-trade tax that would increase energy prices on these very same families as well. 

For a long time now I have been urging the Democratic leadership to tear down this wall, and it seems that my message has finally been heard, at least partially. President Obama’s budget 

makes most of the bipartisan tax relief of 2001 and 2003 permanent. We now have agreement on issues like the marriage penalty. 

Working families will be able to continue to count on lower rates. 

Low-income seniors who are counting on their capital gains and 

dividend income can sleep a little easier. 

The fourth example I will give, but not the end of all the examples that could be given, is the ravenous monster that the Alternative Minimum Tax is will be held back from the middle class. If 

Democrats in Congress share President Obama’s commitment to 

tearing down at least part of this wall, then they will find allies 

on my side of the aisle to do that. 

As pleased as I am to find that the new President has come to 

agree with me on these issues, there is still more that we need to 

do, especially in these formidable economic times that we are in. 

President Obama intends to allow parts of the 2001 and 2003 tax 

relief to expire that, if extended, will continue to provide incentives 

for the creation of jobs and the resuscitation of the economy: provisions such as the marginal rate reductions in the top two income 

tax brackets, the repeal of the phase-out of personal exemptions 

and itemized deductions, and dividends and capital gains reductions for everyone. 

These provisions helped grow the economy when they were put 

into effect. These provisions then, common sense tells me, could be 

a valuable tool in a recovery, if we do not cast them aside. Many 

of my colleagues are skeptical of any income source that is not a 

check from the Federal Government, but the 2001 and 2003 tax relief packages did not benefit the rich, or let us say did not benefit 

just the rich, as some are leading us to believe. In fact, these packages are part of a broad trend where our tax system has become 

more progressive—let me emphasize that, more progressive—over 

4 

the past several decades. Why can we not get through to some people that the tax code has become more progressive in this process? 

Recent tax relief has continued to shift more of the Federal tax 

burden onto wealthy households, while lowering rates or eliminating Federal income tax liability for many middle-income and 

lower-income households. One of today’s witnesses cites the Congressional Budget Office data in showing that income taxes, as a 

percentage of income, have fallen more for low-income and middleincome households over the past several decades than they have 

fallen for wealthy households. This indicates that, as a percentage 

of Federal income tax revenue, the tax burden on our wealthiest 

citizens has steadily increased over time, while it has decreased for 

lower- and middle-income households. 

This chart is derived from CBO data, showing how effective Federal tax rates have changed from 1979 through 2005. It shows 

those changes for two groups. One group is Americans in the top 

5 percent in terms of income, and the other is everyone else, the 

remaining 95 percent. The blue line represents the top 5 percent, 

the red line represents the remaining 95 percent. The vertical line 

shows where rates were in 2000. 

According to an analysis of CBO data, the effective tax rate for 

the top 5 percent of earners was around 31 percent in 2000 and 

the effective rate was around 20 percent for everyone else. In 2005, 

the effective rate had decreased to around 29 percent for the highest earners and 17 percent for the other 95. 

In a period where effective tax rates declined by roughly 2 percent for the top 5 percent of earners, rates decreased by 3 percent 

for the remaining 95 percent. The tax relief enacted in 2001 and 

2003 decreased effective Federal tax rates for the bottom 95 percent more than it did for the top 5 percent. What has been maligned as tax cuts for the rich increased the share of Federal taxes 

paid by that category. 

What we as a committee take from this hearing will be very important. I hope that my colleagues come away with a better understanding of what we need to do to drive our economy out of the 

hole that we are in and why we should fully extend and make permanent the 2001 and 2003 bipartisan tax relief so that we are able 

to offer everyone a ladder to productivity and prosperity. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

I would now like to introduce the panel. The first witness is Paul 

Taylor, executive vice president at the Pew Research Center. 

Thank you, Mr. Taylor, for joining us today. 

Second is George Yin, whom we all know here as former Director 

of the Joint Committee on Taxation, and now professor at the University of Virginia School of Law. Thank you again, Mr. Yin. Good 

seeing you again, George. 

Then we have Robert Greenstein, executive director of the Center 

on Budget and Policy Priorities. And Bob, I am very sorry to hear 

that your wife was in an accident Monday. Apparently her legs are 

not in very good shape. But thank you for taking the time to be 

here. I know your thoughts are very much with her, but you are 

here today to help out, too. So we deeply appreciate that and hope 

for a speedy recovery for your wife. 

5 

Finally, we have Alan Viard, resident scholar at the American 

Enterprise Institute. 

As is our regular practice, and we will follow it, I ask each of you 

to give about a 5-minute statement. Your statements will automatically be in the record. 

Mr. Taylor? 

STATEMENT OF PAUL TAYLOR, EXECUTIVE VICE PRESIDENT, 

PEW RESEARCH CENTER, WASHINGTON, DC 

Mr. TAYLOR. Thank you, Chairman Baucus and Ranking Member 

Grassley, for the opportunity to testify. 

Let me say at the outset that I am neither a tax policy expert 

nor an economist. I am the lead author of a major report that the 

Pew Research Center published last year on the middle class. We 

looked at the subject through two lenses: a nationwide public opinion survey in which we asked people what it means to be middleclass, and an analysis of the major economic and demographic 

trends that have affected the middle class since 1970. The report 

was long; it ran nearly 200 pages. This morning, let me just very 

briefly summarize about a half-dozen key points. 

First, when we asked people in our survey to identify what class 

they are in, 53 percent said they were middle class. But it was very 

clear from our survey that self-identifying as ‘‘middle-class’’ is as 

much an expression of a state of mind as it is a statement of income and assets. 

For example, younger adults and older adults are both more likely than middle-aged adults to identify as middle-class, even though 

middle-aged adults have more income. The reason is that middleaged adults also have more financial burdens. Similarly, blacks, 

whites, and Hispanics are all equally likely to identify as being 

middle-class, even though the whites who do so have considerably 

more income than the blacks and Hispanics who do so. 

Overall, our survey shows that how much money people think it 

takes to be middle-class correlates directly with their own income: 

the higher the income, the higher the bar people set for living a 

middle-class lifestyle. 

Our second major finding was that the middle class feels stuck 

in its tracks. We did our survey 13 months ago, in the early days 

of a recession that had not yet been officially declared, but even 

then, when we asked people how they were doing in life compared 

with 5 years before, we got the most downbeat reading on this 

question in the half-century it has been asked by the Pew Research 

Center and other polling organizations. Nearly 6 in 10 middle-class 

respondents said that they either had not moved forward in life in 

the past 5 years or had actually fallen backwards. 

When we examined census data, we could see why people feel 

this way. Our third key finding was that inflation-adjusted median 

household income, arguably the best single indicator of the middleclass standard of living, had not yet surpassed the peak it reached 

in 1999. 

We have since updated this analysis with another year of census 

data, and this still holds true, making the current decade the longest stretch of years in the modern era in which this key indicator 

has remained at or below its previous peak, first during a shallow 

6 

recession at the beginning of this decade, but later during 6 years 

of economic expansion that ran through the end of 2007. So for the 

typical American household, the great recession that began 15 

months ago was preceded by an equally unusual, if slightly less 

dramatic, phenomenon: a phantom recovery. 

The picture is very different and much more positive when we 

lengthen our time horizons. Our fourth finding is that, since 1970, 

median household income has risen by 21 percent in inflationadjusted dollars. If you correct for the changes over this time period in average household size, the effective increase has been 41 

percent. 

Moreover, the middle class understands this. Just as they are 

frustrated by a sense of stagnation in the short term, they also appreciate a rising standard of living over the longer arc of their own 

lives. In our survey, two-thirds of middle-class respondents say 

they are doing better in life than their parents did, just 10 percent 

say they are doing worse. 

But there are also some less positive long-term trends that the 

middle class is keenly aware of. Our analysis of all key data related 

to middle-class family finances—income, wealth, consumption, expenditures, debt, et cetera—tells one consistent story. Even as the 

middle-class standard of living has risen since the 1970s in absolute terms, it has fallen behind relative to the folks above them on 

the socioeconomic ladder. 

Thus, the past 4 decades for the middle class have been a period 

of rising prosperity and rising inequality. By contrast, the economic 

period before that, from the end of World War II through the early 

1970s, had been a time of rising prosperity and declining inequality. 

Finally, we examined the changing economic and demographic 

composition of the middle class since 1970. We found that it has 

shrunk a bit over time, reflecting a dispersion of slightly greater 

shares of the population into both the upper- and the lower-income 

tiers. We found that, demographically, the middle class has 

changed since 1970 in much the same way that the country as a 

whole has changed: it is older than it used to be, it is less white 

than it used to be, it is better educated than it used to be, and it 

is less likely to be married. 

We covered a lot of other ground in our report, and also in my 

written testimony, but I think I have used up my time for now. I 

would welcome the opportunity to answer your questions. Thank 

you. 

The CHAIRMAN. Thank you, Mr. Taylor. That was very interesting. 

[The prepared statement of Mr. Taylor appears in the appendix.] 

The CHAIRMAN. Mr. Yin? 

STATEMENT OF GEORGE YIN, EDWIN S. COHEN DISTINGUISHED PROFESSOR OF LAW AND TAXATION, UNIVERSITY 

OF VIRGINIA, SCHOOL OF LAW, CHARLOTTESVILLE, VA 

Mr. YIN. Thank you, Mr. Chairman, Senator Grassley, members 

of the committee. Thank you for inviting me to testify at this hearing today. It is a pleasure to see you both once again. 

7 

I will quickly make just four points. First, the committee should 

allow the expiring income tax cuts to lapse, including those applicable to middle-income taxpayers. The country simply cannot afford 

them. I have included in my testimony today CBO projections 

showing the dire and imminent fiscal crisis facing the country, and 

these projections do not include all of the recent events stemming 

from the financial crisis that have likely made the outlook significantly worse. The Bush tax cuts may or may not have been wise 

in the first place, but that debate is now long past. We simply cannot afford them in the future. 

Second, other deficit-reducing options, including reforming health 

care and entitlements and increasing other taxes, are not sufficient 

to substitute for letting the income tax cuts lapse. The fiscal situation is so bleak that we must make dramatic reductions in spending and find additional revenue sources. In this context, letting the 

income tax cuts lapse is a comparatively easy option, and the committee should take it. 

Third, fairness considerations do not justify extending any of the 

tax cuts. Although some may believe that the Bush income tax cuts 

disproportionately benefitted the wealthy, I include in my testimony data from the IRS that does not support that conclusion. 

That said, just as we are beyond the point of debating whether the 

Bush tax cuts were wise in the first instance, we are also past the 

time of worrying about their distributional effect. 

Letting all of the income tax cuts expire across the board would 

return the country approximately to the tax system of the last 

Democratic administration. That policy decision would, first, address concerns that the tax cuts have disproportionately benefitted 

the wealthy; second, be fiscally responsible; and third, be consistent 

with the principle of shared sacrifice during this very challenging 

time for the country. 

Finally, Congress should agree now on a target level of economic 

growth that would have to occur before any tax cuts would be allowed to expire. The agreement would provide for a continuation of 

the cuts until the target is achieved, but also expiration of the cuts 

once the target is met. It may be easier to reach agreement now, 

committing to this balanced and responsible future action while the 

committee and the Congress are somewhat blind to the precise timing, than to wait and try to obtain consensus at the future time. 

As Mr. Taylor’s research indicates and as we all know, my policy 

prescriptions today are politically unappealing. No one likes taking 

the steps I have advocated; I certainly do not. But the core numbers indicative of an imminent fiscal crisis do not lie. We are beyond the point of being able to kick this problem down the road a 

little further. 

As our Nation’s leaders, you must persuade the American public 

that, unless steps like the ones I have described are taken very 

soon, we risk such serious economic disruption in this country as 

to make recent events look like child’s play, and even worse, we 

risk the possibility of triggering global instability and geopolitical 

conflict. 

With respect, Mr. Chairman and Senator Grassley, I would just 

like to comment on the point that letting the tax cuts lapse will result in a huge tax increase. In my view, Congress has already 

8 

passed that huge tax increase by passing spending programs that 

are not sufficiently financed. Since there is no free lunch, the effect 

is to have passed a large tax increase to finance all of that spending. The only question before us is, when will that tax increase 

occur, and on whom? My point, simply, is that the sooner and the 

more broad-based the tax increase, the less economic disruption for 

the country. 

I am happy to answer any questions you may have. 

The CHAIRMAN. Thank you, Mr. Yin, for your very forthright 

statement. I really appreciate that very much. Thank you. 

[The prepared statement of Mr. Yin appears in the appendix.] 

The CHAIRMAN. Mr. Greenstein? 

STATEMENT OF ROBERT GREENSTEIN, EXECUTIVE DIRECTOR, CENTER ON BUDGET AND POLICY PRIORITIES, WASHINGTON, DC 

Mr. GREENSTEIN. Thank you, Mr. Chairman. Thank you for your 

kind words about my wife. 

I would like to start, also, with a brief note on the fiscal context. 

I share Mr. Yin’s view about the seriousness of the fiscal situation 

that the Nation faces, which was reinforced by the Congressional 

Budget Office report released last week. 

Now, it does seem clear to me that those tax cuts enacted in 

2001 and 2003, that affect people with incomes up to about 

$250,000 a year, are going to be made permanent. That seems to 

be the position of a majority in both parties up here, and the President. 

So I wanted to talk a little bit about the major outstanding issue 

politically, which is the disposition of the tax cuts for those at the 

top of the income scale. It does seem to me, given the Nation’s fiscal position, that extending those tax cuts, particularly without 

paying for them, would be unwise from both a budgetary and an 

economic standpoint. 

Research suggests that extending these tax cuts without paying 

for them would likely reduce long-term growth because of the corrosive effects of the increased debt. That conclusion emerges from the 

work of CBO, the Joint Tax Committee, and others. 

I also wanted to make a few points about the President’s proposals under which the income tax cuts at the top would be allowed 

to expire at the end of next year. Those proposals have been criticized by some as producing a high tax burden and high-tax government and imposing crushing burdens on high-income Americans in 

general, and small business in particular. So, I wanted to take a 

brief look at those charges. 

Now, regarding the charge that it would lead to high levels of 

taxation, the CBO report issued last Friday shows that, under the 

President’s proposals, total Federal revenues would average 18.4 

percent of GDP over the next 10 years, about the average over the 

last 30 years. I would note that in 4 of the last 30 years when the 

budget was balanced, in every one of those, revenues were between 

20 and 21 percent of GDP. Nor do I think it is the case that allowing the tax cuts at the top to expire would result in crushing tax 

burdens on people at the top. 

9 

The Urban-Brookings Tax Policy Center data show that average 

tax burdens, the percentage of income paid in Federal tax, for virtually every income group, including the top 1 percent, would be 

lower under those proposals than it was in the 1990s, a period 

when the economy boomed. It is sometimes overlooked that, if one 

extends the 10-percent bracket, marriage penalty relief, the reduction in the rates in the brackets right below the two top brackets, 

and the like, that the benefits from that go to everyone, including 

the people at the top of the income scale. 

This is why even high-income people, under the President’s proposals under which the tax cuts at the top would be allowed to expire, would pay a smaller percentage of their income in Federal 

taxes than under the pre-Bush policies. 

Nor would the proposals oppress small business. The latest Tax 

Policy Center data show that only 2.2 percent of people with small 

business income would be in the top two tax brackets, and hence 

affected by the proposal to allow the rate reductions in those brackets to expire. A higher figure has been cited recently, as I can explain in Q&A. The higher figure is based on a misapplication or a 

misunderstanding of a Treasury report from several years ago and 

is not accurate. 

The number of small business owners who would benefit from 

the middle-class tax cuts that would be extended dwarfs the number who would be affected by allowing the tax cuts at the top to 

lapse. A little-known fact: the number of small business owners 

who get the Earned Income Tax Credit is 10 times the number of 

filers with small business income who are in the top two brackets. 

There is also little evidence for the claim that a return to the 

Clinton-era rates of taxation at the top of the income scale would 

seriously injure small businesses or damage U.S. job growth. If 

that were the case, the experience of the last 2 decades would show 

small business job growth was faster in the years when the Bush 

tax cuts were in effect than in the Clinton years when the rates 

were higher, but the opposite is true. 

The average rate of small business job growth was twice as high 

in the Clinton years, 756,000 jobs per year, an average job growth 

rate of 2.3 percent per year, as it was under President Bush before 

the current recession set in, when it was 367,000 jobs per year, or 

1 percent per year. 

There is also the issue of increased inequality and after-tax income. CBO data show that the 2001 and 2003 tax cuts widened the 

inequality further. Particularly noteworthy is the Tax Policy Center 

estimate that, in 2010, households with incomes of over $1 million 

a year will receive an average tax cut from the 2001 and 2003 tax 

changes of $158,000 each, compared to $810 for households in the 

middle of the income scale. Given the fiscal situation Mr. Yin described, it is difficult to see how we can afford that. 

My final point is, there is strong merit, I believe, in the administration’s proposals to extend the expansions in the Child Credit, 

the Earned Income Tax Credit, and the American Opportunity 

Credit that you and your colleagues enacted on a temporary basis 

in the recent economic recovery legislation, and to pay for the cost 

of those extensions. Those extensions should better reward work 

10 

among many low-income parents, increase educational attainment 

and productivity, and significantly reduce child poverty. 

Thank you. 

The CHAIRMAN. Thank you, sir. Thank you very much. 

[The prepared statement of Mr. Greenstein appears in the appendix.] 

The CHAIRMAN. Next, Mr. Viard? 

STATEMENT OF ALAN VIARD, RESIDENT SCHOLAR, AMERICAN 

ENTERPRISE INSTITUTE, WASHINGTON, DC 

Mr. VIARD. Thank you, Mr. Chairman, Ranking Member Grassley, members of the committee. It is an honor to testify here today 

about middle-class tax relief. The views that I express are my own 

and do not necessarily reflect the views of any other person or any 

organization. 

Congress faces important decisions in the next 2 years about 

middle-class tax relief, including the decision of whether to extend 

the middle-income provisions of the Bush tax cuts and whether to 

extend the stimulus tax relief. 

I recognize, as George Yin mentioned, that middle-class tax relief 

is politically popular. It was embraced during the presidential campaign, both by President Obama and by his Republican opponent. 

Nevertheless, Mr. Chairman, I respectfully recommend that Congress not adopt a broad package of permanent middle-class tax relief at this time. Substantial tax reductions have already gone to 

low-income and middle-income households over the last 3 decades. 

Middle-class tax relief would add to the fiscal imbalance, as George 

Yin has discussed, and would do little to improve economic incentives. Capital formation would be impeded, reducing labor productivity. In short, adoption of a large package of middle-class tax relief would increase the fiscal burden on future middle-class taxpayers and reduce the wages of middle-class workers. 

From the standpoint of economic growth, it is particularly troubling to extend middle-class tax relief while allowing the expiration 

of many of the provisions of the Bush tax cuts that provide a 

stronger boost to economic incentives, such as the reductions in the 

top brackets. 

Significant permanent middle-class tax relief should be considered only as part of a bipartisan compromise that addresses the 

long-term fiscal imbalance. The appointment of a bipartisan commission along the line that Senators Conrad and Gregg have proposed would be a good way to help produce such a compromise. 

In the remaining time, Mr. Chairman, let me briefly review the 

points that I made in my written testimony. I provide Congressional Budget Office data, some of the data that Senator Grassley 

mentioned earlier, that documents the decline in tax burdens for 

low- and middle-income households since 1979. Federal income 

taxes have fallen particularly sharply for those groups and, indeed, 

many lower-income households now have negative income tax liabilities. 

Payroll taxes, of course, do hit workers at the bottom harder 

than do income taxes. Now, I am not sure that the payroll taxes 

should be included in the analysis without also including the progressive benefits provided by Social Security and Medicare Part A 

11 

that are financed by those taxes, but, in any case, including payroll 

taxes in the analysis does not change the basic picture. Figure 2 

in my written testimony shows the decline in total Federal tax burden since 1979 as being greater for the bottom and middle quintiles 

of the income distribution than for the top, even with payroll taxes 

fully included, even with employee and employer payroll taxes assumed to fall on workers. 

Figure 3, on page 5 of my testimony, shows the distribution of 

the total Federal tax burden in 2005, again, including employee 

and employer payroll taxes. It shows a highly progressive tax system with the top 1 percent of the income distribution bearing more 

than 25 percent of the total Federal tax burden, a higher share 

than represented by its share of national income. 

Now, a major advantage of tax relief is that it can boost incentives to work and save. Unfortunately, middle-class tax relief provides only a limited boost to incentives. The key incentive variable 

is the marginal tax rate, the rate that applies to the last dollar of 

a household’s income. 

The question is not how much in taxes the household is already 

paying, but how much more it will pay if it earns another dollar 

of income. A reduction in any given tax bracket boosts incentives 

only for those households that face that bracket on the last dollar 

of their income, even though taxes go down and revenues are lost 

with respect to households that have any part of their income taxed 

in that bracket. 

As I show in Figure 4 of my testimony, there is great variation 

among the six ordinary tax brackets in that regard. The bottom 10 

percent bracket is a marginal bracket only for a quarter of the tax 

returns that have some income taxed in that bracket. In contrast, 

each and every household that has any income taxed in the top 35 

percent bracket does face that rate on the last dollar of income, as 

must be true for the top bracket. 

The chart that I have in my testimony actually understates the 

relative importance of the top brackets, because the top brackets 

are marginal for those households that have the largest amount of 

income and do the largest amount of saving. 

Tax credits, which are a major part of the stimulus tax relief and 

were also part of the Bush tax cuts, generally do even less to improve economic incentives. If those credits are phased out as income rises, they can actually impair economic incentives in particular income ranges. 

Finally, as George Yin mentioned, middle-class tax relief will significantly widen the fiscal imbalance. In Figures 5 and 6, I have 

taken the CBO’s analysis of the President’s proposed budget and 

modified it by removing tax relief that is targeted towards the middle class. I compute that, without that relief, the deficit would be 

3.6 percent rather than 5.7 percent of GDP in fiscal 2019, and the 

debt at the end of that year would be 69 percent rather than 82 

percent of annual GDP. Of course, widening the fiscal imbalance 

impedes capital accumulation, which reduces wages for middleclass workers and imposes fiscal burdens on future middle-class 

taxpayers. 

Let me mention that the stimulus tax relief, in particular, was 

adopted as a temporary measure to help workers during the recesVerDate Nov 24 2008 18:16 Feb 18, 2011 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 R:\DOCS\64349.000 TIMD
12 

sion and to provide a Keynesian stimulus to aggregate demand. 

Those considerations do not warrant permanent extension. In particular, Keynesian economics does not call for permanently increasing aggregate demand in a futile attempt to permanently boost output. Instead, it calls for increasing demand when the economy is 

weak and reducing it when the economy is strong in order to stabilize output. 

The middle-class tax relief is locked securely into place for the 

next 21 months, as President Obama and OMB Director Orszag 

have mentioned in recent days. If the recession proves to last 

longer than expected, a temporary extension clearly can, and will, 

be provided. 

In summary, Mr. Chairman, permanent middle-class income tax 

relief should be considered as part of a bipartisan fiscal compromise that addresses the long-term imbalance. Appointing a bipartisan commission along the lines proposed by Senators Conrad 

and Gregg would be a desirable way to help bring about that compromise. The best way to help the middle-class, and all Americans, 

is not to rush into middle-class tax cuts, but rather to adopt a fiscal 

framework that ensures long-run growth. 

Thank you. I am eager to take your questions. 

The CHAIRMAN. Thank you. Thank you, Mr. Viard. 

[The prepared statement of Mr. Viard appears in the appendix.] 

The CHAIRMAN. If I can, I have two questions, basically, for Mr. 

Greenstein and Mr. Yin, if you could, to try to more sharply determine your disagreement. As I understand it, Mr. Yin, you say, do 

not extend any of them because of the fiscal problems we are facing. Mr. Greenstein, you say, yes, extend the middle-income rates, 

I guess, because it is good in the short term. 

So is this a short-term/long-term difference of opinion? Either 

one of you might explain why you think the other one is not accurate, not right. 

Mr. GREENSTEIN. I am not sure there really is that strong a disagreement here. Historically, we at the Center on Budget and Policy Priorities, along with groups like the Concord Coalition and 

Committee for Economic Development, have taken the position that 

any extension of the tax cuts should be paid for. I would certainly 

prefer to see any extension of the tax cuts paid for. 

I think my testimony is reflecting my assessment of political reality. It seems clear to me that there is pretty strong agreement 

across both parties and the White House that the middle-income 

tax cuts should be extended and that offsets will not be required. 

What my testimony is reflecting is, if that is the case, let us limit 

it to that and say that anything beyond that either is not extended, 

or, if it is extended, is fully paid for. 

The CHAIRMAN. Well, there is sort of a ghost behind what you 

are saying, that you think, academically and intellectually, irrespective of politics, if I am understanding you correctly, my sense 

of what you are thinking is that they, too, should not be extended. 

Mr. GREENSTEIN. I have some sympathy for Mr. Viard’s recommendation. I think back to Andrews Air Force Base in 1990—— 

The CHAIRMAN. Yes. I remember that. 

Mr. GREENSTEIN [continuing]. Through a major negotiation 

where everything on Medicare, Social Security, the entire tax code, 

13 

individual, and corporate is on the table, and we look at the longterm fiscal problems and deal with it. 

The CHAIRMAN. Nobody wants to go through that again, let me 

tell you. 

Mr. GREENSTEIN. Sooner or later, I am afraid it is inevitable, because we are on an unsustainable fiscal course. But my testimony 

is attempting to reflect where we are now, from both a standpoint 

of issues like equity and fiscal responsibility, to sort of weigh them 

and say, all right, if we are extending the middle-income tax cuts 

as the President has proposed, then it seems to me—for which 

there is overwhelming support in both parties—let us at least 

say—— 

The CHAIRMAN. All right. 

Mr. GREENSTEIN. As I said, I strongly favor extending a number 

of the refundable credit improvements in the Recovery Act. 

The CHAIRMAN. Right. 

Mr. GREENSTEIN. But I favor paying for them. 

The CHAIRMAN. All right. My time is expiring so, if you could be 

very brief, because I have one more question. 

Mr. YIN. Yes. Thank you, Mr. Chairman. Just one quick comment, which is, my recommendation is that I think that this is the 

fiscally responsible step to take. I do lay out in my testimony a 

number of other options to address the fiscal crisis. 

The CHAIRMAN. All right. Right. 

Mr. YIN. In my view, of all of the options, this is in some sense 

the easiest option to take, based on principles of equity, efficiency, 

and administrability. I address the issue about equity in my testimony and try to make the point that letting all of the tax cuts 

lapse is not inequitable. 

The CHAIRMAN. Right. All right. 

Mr. YIN. From efficiency, Dr. Viard’s point is, I think, correct, 

that to some extent, the middle-income tax increases would be 

inframarginal and would not have the kind of distortive effect on 

efficiency that other changes would have. 

The CHAIRMAN. I appreciate that very much. I am sorry to have 

to encourage you to truncate your statement. 

The next question is the effect on small business. A lot of people 

say, if middle-income tax cuts are extended, but the top two tiers, 

top two rates are not, that that is going to have an adverse effect 

on small business in America. 

Two statistics I have seen—the data from the Tax Policy Center 

indicates that about 2.2 percent of people with small business income fall in the top two tax brackets. On the other hand, I have 

heard that some say that small business income from the top two 

brackets accounts for nearly 70 percent of small business income. 

It depends on what your ideology is, I guess, or what axe you are 

trying to grind here. But what is the truth? To what degree will 

non-extension of the top two brackets have an adverse effect on 

American small business? This is a very important question. 

Mr. GREENSTEIN. Mr. Chairman, we have looked at both sets of 

data. Maybe I can try to illuminate this. The higher figures come 

from a Treasury study from 2007, and there is a misunderstanding 

of what that study did and what it showed, so some statistics that 

are in some tables in that study have been misunderstood and misVerDate Nov 24 2008 18:16 Feb 18, 2011 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 R:\DOCS\64349.000 TIMD
14 

applied. There are two problems. It distributed a subgroup of small 

business owners, people with small business income, and only 

looked at a fraction of them. 

At least, the tables that are being cited, the figures you mentioned, are a subset of small business owners. Second, the big problem with the figures that are being cited is that what that Treasury study did was, it distributed small business owners by the tax 

bracket they would be in if there were no Alternative Minimum 

Tax. But there is. 

Under the AMT, as you know, a very large share of people between $250,000 and $500,000 a year do not pay in the 33- or 35- 

percent brackets now, they pay at the AMT rate of 28 percent. If 

you raised the 33-percent rate back to 36 and the 35-percent rate 

back to 39.6—in other words, if you allow that to occur at the end 

of 2010—to the degree that people are still under the AMT, they 

still pay the 28-percent rate. They are not affected then by the increase in the top brackets. 

The difference between the 2.2-percent figure and the 7- or 

8-percent figure is in large part the difference of whether you act 

as though the AMT does not exist or you act as though it does exist 

and the patch is continued. The Tax Policy Center data assume 

that the AMT continues, that the current patch is continued, and 

indexed for inflation. The Treasury data take all those people who 

are not really in the two top brackets because they are under the 

AMT and it puts them in the two top brackets and it makes it look, 

therefore, like they would be affected, but they really would not be. 

The CHAIRMAN. My time is expiring. I went way over my time, 

frankly. But I think this is an important issue. With the indulgence 

of the rest of the members, just very, very briefly, like in 30 seconds, get to your last point. 

Mr. GREENSTEIN. Well, the last point is that, if you look at it, it 

turns out that the subgroup of small business filers who are in the 

top two brackets under the Treasury study constitutes 1⁄2 of 1 percent of all small business filers. It is smaller than the 2.2-percent 

figure because they took a subgroup that is more likely to be affected, and then that number is inflated by ignoring the AMT. 

The CHAIRMAN. Thank you very much. 

Senator Grassley? 

Senator GRASSLEY. Yes. I want to go to something that Mr. Yin 

and Mr. Viard brought up about PEP and Pease, kind of like a nontransparent tax rate increase. In fact, according to an analysis by 

my staff, a married couple in 2011, filing jointly in the 36-percent 

income tax bracket, with two children, could effectively be paying 

a hidden tax of an additional 5 percent, thus, the effective income 

tax rate would be 41 percent and not what people are led to believe 

would be 36 percent. It is kind of a double-whammy, because this 

exact same couple, only a year before in 2010, would be in the 33- 

percent bracket and without any PEP and Pease limitations, because PEP and Pease were temporarily phased out, as you know. 

So they would jump from 33 to 41 percent in just 1 year without 

any change of income. 

So my preference and the best option would be to have PEP and 

Pease eliminated without any offsetting tax rate increase, and the 

15 

worst option would be to have PEP and Pease become full force in 

2011. 

Given the President’s stated praiseworthy commitment to transparent budgeting, I would think the administration would not desire to return to PEP and Pease. So my first question would be to 

Professor Yin. When, in your testimony, you call for allowing the 

Bush tax cuts to lapse, it appears that you were mostly just talking 

about the statutory rate cuts and the increases in the Child Tax 

Credit. What is your advice on PEP and Pease limitations? 

Mr. YIN. Thank you, Senator Grassley. My thoughts on PEP and 

Pease are quite straightforward. The decision on whether to let 

PEP and Pease return is strictly an issue of how redistributional 

you want the tax system to be. That is obviously an issue that you 

all are going to have to resolve. 

If you were to decide that you in fact want to have a tax system 

that is redistributional to the extent of bringing back the PEP and 

Pease limitation, then my strong recommendation would be consistent with your point, Senator Grassley, which is, you should do 

it explicitly by simply raising the marginal income tax rates on the 

effective taxpayers and eliminating the PEP and Pease mechanism 

for getting to that level of redistribution. 

Senator GRASSLEY. I was going to ask Mr. Viard and lead into 

a question, but I think you are already shaking your head. So 

would you comment at this point? Then I will not have to ask my 

question. 

Mr. VIARD. Yes. I agree that, if these marginal rate increases are 

to occur, they certainly should be done in a transparent manner. 

The proliferation of income-based phase-outs of credits and deductions in the code has been a major loss of transparency and a major 

increase in complexity in the code, which I think allows greater disincentives to be introduced, with less political attention to the consequences of it. 

I do think that by putting marginal rate increases at the top, 

which is what the Pease provision clearly does, the PEP provision 

also applies at relatively high income levels but does not increase 

marginal rates at the very top, but with the Pease provision especially, you are causing a significant disincentive effect, which will 

cause an adverse effect on economic activity, including small business activity, for example, but not limited to that. 

I do disagree, in significant part, with some of the comments Mr. 

Greenstein made on small business. But I think it is preferable to 

avoid putting disincentives at these income ranges, and, if disincentives are introduced, they should be done honestly, openly, in the 

light of day. 

Senator GRASSLEY. My last question I will have to have short answers on, because it is to the whole panel. The administration has 

called for the reinstatement of PEP and Pease for singles with incomes over $200,000 and married couples over $250,000. So this 

sounds to me like it is going to reinstate the marriage penalty. Do 

you agree? Is it true that PEP, especially, hits families with more 

children? 

I will start with you, Mr. Taylor. 

Mr. TAYLOR. Again, this is not my domain. 

Senator GRASSLEY. Then let us go on to Professor Yin. 

16 

Mr. TAYLOR. Let us go on. Sure. 

Mr. YIN. I am going to have to look at the analysis a little more 

closely to be able to give you a specific answer. I would be happy 

to convey that to you or through your staff. 

Senator GRASSLEY. Mr. Greenstein? 

Mr. GREENSTEIN. I would put what are the best and worst alternatives in different orders. To me, the worst alternative would be 

to extend the repeal of Pease and PEP, losing large amounts of revenue and worsening the fiscal condition of the country. I think if 

we look at the experience when they were in effect in the 1990s, 

the economy did very well: people at the top did not lack for incentives to save or invest; income grew much more among the top 

1 percent in the 1990s than among anybody else. 

I do agree that it would be preferable to raise the same amount 

of money more explicitly through dealing with the rates directly, 

but, if that is not possible, given the revenue that Pease and PEP 

raise and its importance for the deficit, then I would adopt the 

President’s proposal. 

Senator GRASSLEY. So then, if it does affect the marriage penalty 

and reestablishes a marriage penalty, that would be all right with 

you? 

Mr. GREENSTEIN. The evidence that the marriage penalty has 

any effect on marital behavior among people who make half a million, a million, or $5 million a year is near zero. The proposal that 

I understand the President has made is to make permanent marriage penalty relief where it does have an affect, at low- and 

middle-income levels of the income scale. It has virtually no effect 

on behavior that high up on the income scale. 

Senator GRASSLEY. Mr. Viard? 

Mr. VIARD. I have not looked specifically at how Pease and PEP 

affect the marriage penalty, but the reinstatement of the top two 

brackets, going back up to 36 and 39.6 percent, would have some 

impact numerically on the size of marriage penalties and marriage 

bonuses at that income level. The majority of households at the 

very top do face a marriage penalty because the income cut-off at 

which the top bracket starts is the same for unmarried taxpayers 

as for married couples, which is contrary to the practice with the 

other brackets. So you have a majority of taxpayers, I think, in 

those income levels facing a marriage penalty. There are some taxpayers who face a marriage bonus if all of the income, or most of 

the income of the couple, is earned by one spouse. 

If you have those two top brackets increased, it basically magnifies the size of the marriage penalties and also magnifies the size 

of the marriage bonuses, so the net impact, I think, is an increase 

in the marriage penalty. I do agree with Mr. Greenstein, however, 

that any impact on marriage behavior or decisions to get married 

would be extremely minuscule or non-existent. 

Senator GRASSLEY. I guess what bothers me is such a cavalier attitude towards the institution of marriage. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Next, Senator Menendez. He is not here. 

Senator Snowe? 

Senator SNOWE. Thank you, Mr. Chairman. 

17 

To go back to the issue, Mr. Greenstein, of the impact on small 

businesses, as the ranking member of the Small Business Committee, I am certainly concerned about that. It still seems to be, I 

think, a confusing subject in terms of exactly what effect it would 

have on small business. We are trying to get data from the Small 

Business Administration; they are in the process of conducting a 

study that should be shortly released that could confirm some of 

the issues that you have raised here today. 

But also, we are guided by the definition of the IRS, which is on gross receipts of $10 million or less. Yet on the other hand, when 

we measured job growth, again, it looks at the number of employees of a small business, which generally is the traditional definition 

of 500 or fewer. 

Is it fair to use the $10 million gross receipts, because many are 

small manufacturers, for example, and so the issue of taxation certainly could have a direct impact on small manufacturers? 

Mr. GREENSTEIN. I would like to consult with people on my staff 

who have more expertise on this question of what is the best definition to use and get back to you. 

In the data we looked at in my testimony, where we looked at 

rates of small business job growth, we looked at the traditional definition, as you mention, of under 500 employees. But I would be 

happy to look into the pros and cons of the different definitions and 

get back to you or your staff. 

Senator SNOWE. Yes. Mr. Yin, do you have any comments on 

that? 

Mr. YIN. I am afraid I do not have anything to share in terms 

of the definition of small business at this point. 

Senator SNOWE. Mr. Viard? 

Mr. VIARD. I cannot speak to the definition of small business, 

Senator. If you wish, I can make some comments with respect to 

how increases in the top two brackets would affect small businesses. 

Senator SNOWE. I would appreciate that. 

Mr. VIARD. All right. I think that Mr. Greenstein has made some 

good points, but most of his data refer to the number of small business owners who would be affected by the increases in the top two 

brackets. Of course, that is relatively small. But I think that is not 

the relevant economic variable. What we care about is the volume 

of income and economic activity that would be affected by those top 

two brackets. I think it is clear that that would be substantial, 

under any definition of small business. 

Some interesting numbers are actually provided by the Tax 

Foundation, Fiscal Fact 152, released October of 2008, written by 

Robert Carroll. He shows that households with adjusted gross income of $200,000 or more account for 67 percent of the total small 

business income. So you have a definite concentration of small 

business income at that level. Obviously, many of those households 

will be affected by increases in the top two brackets, but not all of 

them, because some would be on the AMT and some would be in 

the third-from-highest bracket. 

Mr. Greenstein also pointed out that a large number of small 

business owners benefit from the Earned Income Tax Credit and 

the Child Credit and other middle-income relief. I think that is abVerDate Nov 24 2008 18:16 Feb 18, 2011 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 R:\DOCS\64349.000 TIMD
18 

solutely true. However, those provisions in general are not going to 

provide an incentive for increased investment by small businesses. 

They are not going to reduce the marginal tax rate. 

In fact, for example, some of those small business owners who 

are on the Earned Income Tax Credit might be in the phase-out 

range of the credit and would therefore face disincentives, rather 

than incentives, to invest. So I think the real incentives to investment do affect the top rates. 

Senator SNOWE. I appreciate that. 

Mr. Greenstein? 

Mr. GREENSTEIN. Our analysis, looking at the Tax Policy Center 

data and the data that underlie the study that Mr. Viard just cited, 

the Tax Foundation study, suggests that the large majority of those 

businesses Mr. Viard just cited actually are not affected because 

they are either on the AMT or in a bracket lower than the top two 

brackets. Of course, it is also the case that, if small businesses invest, the money spent on investment does not come out of after-tax 

income, it is business expenses. You only pay taxes on the profits. 

How does one put all this together? I would suggest that perhaps 

the most relevant data involve looking at what happened to small 

business job growth during the period in the 1990s when the higher tax rates at the top were in effect, as compared to the period 

from 2001 to 2006—I am excluding the recent recession—when the 

lower rates were in effect. 

That is where we find that the rate of small business job growth 

was twice as high in the 1990s when the top rates were in effect 

as in the more recent period when the lower rates were in effect. 

The bottom line, I think, is that the connection between whether 

the top rate is 35 or 39.6 and small business investment and job 

growth is very weak. 

The negative effect on small business from much higher deficits 

and debt and the impact on the capital stock, and thereby on interest rates and other things, would be much greater. I think the impact on small business would be more harmful from making all the 

tax cuts, including those at the top, permanent and not paying for 

them and looking at the long-term and mid-term effects on the 

economy of levels of deficits and debt at that level. 

Senator SNOWE. Could Mr. Viard just respond? 

The CHAIRMAN. Go ahead. Go ahead. 

Mr. VIARD. May I respond, quickly? 

The CHAIRMAN. Go ahead. 

Mr. VIARD. Thank you, Mr. Chairman. I appreciate your indulgence. I need to correct a statement I made, Senator. I misspoke 

in saying that 67 percent of the small business income was 

$200,000 or more; rather, the study says that 67 percent of the returns in that category had small business income. But Mr. Carroll 

does cite the Treasury finding that over 70 percent of small business income goes to taxpayers in the top two brackets. 

But Mr. Greenstein stated that investment is made from beforetax income. That is only true under a consumption tax where investment can be immediately expensed. We have an income tax 

system in this country. Except for provisions like section 179, investment is not expensed and depreciation is deducted over time. 

19 

The income tax does reduce the net rate of return from investment 

and does penalize investment. 

Senator SNOWE. Thank you. 

Thank you very much, Mr. Chairman. 

The CHAIRMAN. Senator Wyden? 

Senator WYDEN. Thank you, Mr. Chairman. I thank our panel. 

For middle-class Americans at this time of the year, the American tax system is just bureaucrat water torture, and it is easy to 

see why. There have been thousands and thousands of tax changes 

to the code made in just the last few years. It comes to three for 

every working day, three tax changes for every working day, year 

in and year out. It is my view that it is time to fix this out-ofcontrol system. That is what I want to ask you all about. 

To me, the model for tax reform is 1986, where you go in there 

and you clean out the clutter, you close these loopholes, broaden 

the tax base, and hold down everybody’s rates, while at the same 

time keeping progressivity. My view is, you take those principles 

and add a 30-line 1040 form, which is in legislation that I have had 

for some time with Rahm Emanuel, when he was in the House, and 

you are ready to go. So I just want to go down the row. The chairman and Senator Grassley have indulged me over the years, because I think I have asked 20 witnesses this over the years. 

Starting with you, Mr. Taylor, in terms of the fundamentals of 

tax reform, not the specific rates and the amounts, is it your view 

that the 1986 model that I have outlined, cleaning out the clutter, 

broadening the base, holding down the rates, keeping progressivity, 

is still a pretty good model to guide the Senate Finance Committee 

on tax reform? Let us just go right down the row on the question 

about whether it is a good model. 

Mr. TAYLOR. As I said earlier, I am not an expert witness on tax 

policy, but I am a citizen of the United States and it sounds pretty 

good to me. 

Senator WYDEN. All right. 

Mr. YIN. Senator Wyden, the answer is yes. 

Senator WYDEN. Mr. Greenstein? 

Mr. GREENSTEIN. Yes, with one asterisk, the asterisk being, 

given how much worse the fiscal condition is now looking forward 

than it was in 1986 when we had a lot more time before the baby 

boomers’ retirement, ideally a 1986-style tax reform that had some 

net revenue increases as part of a larger budget deal that also 

made changes on the spending side of the budget. But basically, 

the answer is yes. 

Senator WYDEN. All right. 

Mr. VIARD. It is certainly a better model than the current income 

tax system, although it is not as good as a progressive consumption 

tax along the lines of a Bradford X tax. 

Senator WYDEN. I probably ought to quit while I am ahead. Certainly what you have said, Mr. Greenstein, and you also, Mr. 

Viard, I think are sensible points. Those are, I think, fair for debate. I mean, people are going to talk about a variety of other 

issues. Bob Greenstein’s point about the question of revenue, of 

course, is very appropriate. But at some point you have to have a 

place to start. 

20 

For the life of me, I look at this broken tax system, and what 

happens is, every year we just keep pouring more money into it, 

with more exemptions, deductions, and credits. At some point you 

have to draw a line in the sand and say, all right, we are going 

to make a break with something that is failing the people of this 

country. 

Let me close, and maybe we will just take you, Mr. Yin, and Mr. 

Greenstein. What other advice would you have for the President’s 

panel that is, I guess, about to be named? I am so pleased that the 

President of the United States is interested in tax reform. He and 

I have talked about it many times. At the same time, I know that 

a lot of members of Congress still have not made their way through 

the report of the last presidential commission on tax reform, the 

Bush report. 

So Chairman Baucus and Senator Grassley are going to have to 

do the heavy lifting on this issue again, and I would like to know 

if you have any other thoughts with respect to what the President’s 

panel and our committee ought to look at as we get into tax reform. 

Mr. YIN. Thank you, Senator Wyden. I do have one comment, 

which is—as I understand the two conditions that the President 

placed on his panel—one was that there would not be any tax increases in the next couple of years. I do not disagree with that. I 

mention in my testimony that there should not be any tax increases until some target level of economic growth has been 

achieved. The second condition was that there should not be any 

tax increases on people earning less than, I believe it was, 

$250,000. 

I would disagree with that condition. The one piece of advice that 

I could give to the President, if I were able to, is to advise him to 

remove that condition from his panel. Essentially if the panel were 

to adhere to that, it would be limiting any possible tax changes to 

essentially the top 2 percent or so of the country. I presented in 

my testimony the fiscal needs of this country. They are much too 

great to put on the backs of 2 percent of the country. Any way that 

you slice it, it simply cannot be done. So my strong advice to the 

President would be to relax that condition, but obviously retain the 

first one. 

Senator WYDEN. My time is up. Mr. Chairman, can Bob Greenstein just answer very briefly? 

The CHAIRMAN. Go ahead. 

Senator WYDEN. Thank you very much, Mr. Chairman. 

Mr. GREENSTEIN. I would agree with everything Mr. Yin just 

said. I would only add to it to urge the panel that the President 

appointed, as well as this committee and your counterpart in the 

House, to be willing to be bold and have courage. There were 

changes made in 1986 that were considered politically unthinkable 

and impossible. The bill nearly died, as you will recall, several 

times. At the end of the day, it was done. 

We are in a period now where, for example, the President’s proposal to cap itemized deductions at 28 percent, our analysis suggests if you did it and you got universal health care, the charitable 

sector would actually be a net beneficiary on the whole. This sort 

of thing is considered almost non-discussable now, even though 

21 

President Bush’s tax reform panel proposed capping the mortgage 

interest deduction at 15 percent. 

I would suggest that we say that nothing is off the table. Nothing 

seemed to be off the table in 1986, and we ended up with an excellent product. Let us start by saying everything can be considered, 

nothing is off the table, no sacred cows, at least for starters, and 

let us see if we can get a better tax code. 

Senator WYDEN. Thank you for the extra time, Mr. Chairman. 

The CHAIRMAN. You bet. Thank you. 

Senator Nelson, you are next. 

Senator NELSON. Thank you, Mr. Chairman. 

There is a lot of talk about taxing small business into oblivion, 

and putting them into the 39.6-percent bracket would be income in 

small business exceeding—now, that is taxable income—$372,000. 

In reality, their gross income could be millions of dollars, with the 

deductions of all of the expenses, payroll, depreciation of capital, 

and other deductions. So I want to ask you all, for small business 

to be in that top bracket, how many small businesses actually 

would have the net income that would put them into that top 

bracket? Do we have any idea? 

Mr. GREENSTEIN. Just this week, the Urban Institute-Brookings 

Tax Policy Center, with its updated model, just updated in the last 

2 weeks, ran precisely those numbers. Their finding is that 2.2 percent of small business filers would be in either of the top two 

brackets. The number in just the top bracket is smaller. I do not 

know if I have with me the precise figure, but 2.2 percent is the 

top two brackets combined. 

It would take us back to the treatment we had in the 1990s, 

when we had actually a rate of small business job growth more 

than double what we have had in recent years with lower rates. 

There is another figure that has been cited. Mr. Viard cited some 

figures from a Tax Foundation report. The problem with those figures is that they are based on a Treasury study that looked at how 

small business filers would be distributed by tax bracket if there 

were no Alternative Minimum Tax. But there is. 

If you are under the AMT, you are at the 28-percent marginal 

rate. You are not in the two top brackets. When you do it right— 

the Tax Policy Center did it right—it assumes that the AMT patch 

is continued. You are clearly going to do that. What percentage of 

filers, small business filers, would then be in those top two brackets? Again, the answer is 2.2 percent of the total. 

One last, quick point. Mr. Viard and I have said similar things 

differently, and it sounds like a big disagreement. I noted, as you 

just have, that the rate is paid on after-tax income. He said, well, 

if you make an investment you do not get to deduct the whole 

thing, because we have depreciation. You do not get to deduct the 

whole thing in the first year, you get to deduct pretty much the 

whole thing over the life of the asset. In any given year, you are 

deducting, as a small business, a share of the cost of the equipment 

you bought in that year, but you are also deducting a share of the 

cost of equipment you bought in previous years, because it is depreciated over a number of years. We do not end up taxing people on 

income that is not part of the profit. 

Senator NELSON. Right. 

22 

I wanted to ask you about the actual amount of additional tax 

that we are getting. The Wall Street Journal recently had said that taxpayers making over $1 million, in doing an audit, that the average amount of the additional tax that the IRS found in the audit 

was over $250,000. Specifically, $258,836 was the average amount 

of tax that was owed that was not paid, as a result of an audit of 

taxpayers making over $1 million. 

Now, that seems to me to be a staggering admission of taxpayers 

underpaying their taxes. Of course, that means that the rest of the 

middle-class taxpayers are footing the bill. So I would like to know, 

particularly Professor Yin, if you have thoughts on how we can reduce this tax avoidance and, in some cases, evasion. 

Mr. YIN. Thank you, Senator Nelson. I am not familiar with that 

specific study that you referred to, but if I heard you correctly, they 

were referring to the average amount of tax owed, which would incorporate some extremely wealthy people who were audited, say a 

billionaire, who may indeed have owed millions of dollars of additional tax liability. That amount is going to be averaged in, so the 

ordinary person in that pool who is being audited would not have 

an additional tax liability of $258,000. So I think that the figure 

may be a little bit misleading in that respect. 

Senator NELSON. Nevertheless, it is large. 

Mr. YIN. It is a large figure. Certainly one additional step that 

could be taken is to improve enforcement across the board, including at the upper income levels where the greater amounts of taxes 

are. I think that that would certainly be an appropriate step that 

one could take. 

I do, however, emphasize again the point I make in my basic testimony, which is that, although I compliment the chairman and the 

committee for taking a very tough stance on improving compliance 

and reducing the tax gap—and I certainly encourage you to continue to do that with great vigor—I think that it is misleading and 

irresponsible to think that somehow we are going to get out of the 

fiscal crisis by simply reducing the tax gap and doing some of the 

other things I mention. I think that you are going to need to do 

all of that and more—much more—and therefore, from the standpoint of options for you, it seems that letting the tax cuts expire 

is the right thing to do. 

The CHAIRMAN. Thank you, Senator. 

Senator NELSON. Mr. Chairman, may we put that Wall Street 

Journal article in the record? 

The CHAIRMAN. Without objection. 

[The article appears in the appendix on p. 47.] 

The CHAIRMAN. But clearly, closing the tax gap would be a good 

thing to do. All right. 

Senator Menendez? 

Senator MENENDEZ. Thank you, Mr. Chairman. I want to thank 

you for what is an important hearing, and I know that you are 

working towards figuring out what type of middle-class tax relief 

we can afford and make useful for our families and our communities. For a State like mine, Mr. Chairman, that is right on target, 

so I appreciate you holding this hearing. 

Mr. Taylor, New Jersey has one of the highest costs of living of 

any State in the country. For example, our definition of middleVerDate Nov 24 2008 18:16 Feb 18, 2011 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 R:\DOCS\64349.000 TIMD
23 

class is very important to us. It is difficult to have the one-size-fitsall. For example, in New Jersey, $77,000 gives you the same purchasing power as $55,800 in Kentucky, or $61,000 in North Carolina. It is an unfortunate reality that New Jersey families that are 

struggling to pay the same universe of bills as millions of other 

families across the country will not have the same purchasing 

power or parity to cover the cost of raising a family. 

So, when conducting your survey, did you have any sense or did 

you find that the geographic costs of living affect the self-definition 

of middle-class? 

Mr. TAYLOR. Very much so. This was a national survey of about 

2,400 people. We asked them their zip code so we could look at 

where they live, and then we made an analysis. We divided the respondents into high-income areas, such as New Jersey, or many 

parts of New Jersey, middle-income areas, and low-income areas. 

Then we looked at what they told us it took for a family of four 

to lead a middle-class lifestyle in their community. Somewhat predictably, as you note in your question, there is a rising scale. If you 

live in a more expensive community, you believe it takes more to 

lead a middle-class lifestyle than if you live in a less expensive one. 

It sort of confirms common sense. 

It is part of this whole definitional question of what it takes to 

be middle-class. ‘‘Middle-class’’ is a universally familiar word, but 

it is actually devilishly difficult to pin down. Chairman Baucus said 

in his opening remarks that virtually everyone considers themselves middle-class. 

In our survey, we gave people five categories. We said, do you 

consider yourself upper class, upper middle, middle, lower middle, 

or lower? We then took the 53 percent who just said they were middle and we used that as the universe of people defining themselves 

as middle. But, if we were to add the folks who said they were 

upper middle and lower middle, you get over 90 percent. So basically at that point the word ceases to have much meaning. You 

have got a middle that is 90 percent of the country. 

But in some ways, in terms of an expression of aspiration, an expression of state of mind and a belief in your status in society, that 

broader number is probably more accurate. 

Senator MENENDEZ. Mr. Greenstein, I hope your wife is well 

soon. I appreciate your service in many different ways in terms of 

your testimony over time, in many different locations, even from 

my days in the House. 

I want to talk about the Child Tax Credit. It seems to me that 

it provides relief that is needed the most, which is for families trying to find ways to pay their bills that are more expensive every 

year, and it also speaks to some of our values in terms of the belief 

in family and the strength of it, and therefore helping our families 

be able to strengthen their possibilities. 

The phase-in of the Child Tax Credit currently stands at $3,000, 

and that is good for millions of low-income families across America. 

It is a tremendous boost from the $12,550 that it used to stand at. 

That is a good development. But my question is, is there any legitimacy to that all working families, at the end of the day, should 

be able to benefit from the Child Tax Credit? Second, the current 

24 

phase-out is not indexed for inflation, which pushes thousands of 

taxpayers out of eligibility in places like New Jersey. 

Do you see the appropriateness of indexing the Child Tax Credit 

or expanding the thresholds so that more middle-class families are 

eligible, or can remain eligible? 

Mr. GREENSTEIN. I think Congress took a very important step in 

the Recovery Act when, as you said, it temporarily lowered the 

threshold to $3,000. I would certainly favor, were it politically feasible, starting the phase-in with the first dollar of earnings rather 

than $3,000. We talked earlier, when Senator Wyden was here, 

about tax reform. I think in this vein, it is worth looking at whether the Child Tax Credit and the Earned Income Credit should perhaps be consolidated; they serve a similar purpose. The Earned Income Credit does start with the first dollar in earnings. 

That is a larger change. I do hope that, when you look at extending those tax cuts that expire at the end of 2010, you look very seriously at least at extending the $3,000 threshold you just passed. 

Interestingly enough, the families that benefits the most, in 

many ways, are people above $10,000 a year, because under the 

current situation they get a tiny credit. Our analysis is that 80 percent of the benefit of setting the threshold at $3,000 rather than 

at $12,550 goes to families with kids between $10,000 and $30,000 

a year. These are families that are working a lot for very low 

wages. 

In the ideal world, one would index the credit at the top as well. 

One does have to be concerned about costs and the deficit. My 

higher priority would be at the bottom than the indexing at the 

top. I do think that all these changes ought to be paid for, but I 

do certainly hope that you make permanent and offset the costs of 

at least setting the threshold permanently at the $3,000 level. 

Senator MENENDEZ. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much, Senator. 

Senator Carper, you are next. You can run this hearing. I have 

to run. So, stay as long as you want. 

Senator CARPER. Thank you. We will take a break for lunch 

around 1 and reconvene around 2:30. [Laughter.] Thank you very 

much for being here, and for your testimony today, and for the confidence you have placed in me, Mr. Chairman. It is a big risk. Senator Menendez says I can ask unanimous consent for anything. 

Maybe we can rewrite the whole tax bill while we are here before 

lunch. [Laughter.] 

I want to just ask, when we have a panel like this, we have some 

really smart people here, very thoughtful people. One of the things 

I would like to ask, just to start off, you have probably testified 

with one another in other forums. We have to develop consensus 

here, or at least we try to. One of the things I like about this committee is working with Senator Baucus and Senator Grassley, who 

like each other, respect each other, and really do try to work together across the aisle. 

What are some areas where you see consensus among your own 

views that you would suggest to us, as we go forward, we might 

try to mirror in what we do? We will just start with Mr. Viard. Do 

you want to go first, since you are closest here? 

25 

Mr. VIARD. I think one area of consensus, certainly, is the existence of the long-term fiscal imbalance and the need to address it. 

I am not sure if there is any other issue on which there is a really 

strong consensus. There are probably other points that we have 

touched on where there is certainly a general agreement. I think 

we both realize that distribution is important and that efficiency is 

important; we disagree, I think, on exactly how to balance those. 

But the strongest consensus is on the need to address the fiscal imbalance. 

Senator CARPER. All right. Thank you. 

Mr. Greenstein? 

Mr. GREENSTEIN. Well, the irony is, I think there is—I am not 

including Paul here, who, as he said, does not really opine on these 

tax policy issues. The irony, Senator Carper, is I think there is an 

additional area, it appears, an agreement of sorts across Mr. Yin, 

myself, and Mr. Viard, but it is an area that puts all of us in disagreement with nearly all of you on both sides of the aisle. All of 

us would either not extend the tax cuts or pay for those we would 

extend. I would extend some of them, but I ideally would have paid 

for anything you wanted to extend under the pay-as-you-go rules. 

As you may know, for years our center, the Concord Coalition, 

the Committee for Economic Development, and the like, we held 

these press conferences that did not seem to accomplish a whole 

lot, saying everything, the prescription drug bill should have been 

paid for, the 2001 and 2003 tax cuts—you want to extend them— 

should be paid for. There seems to be essentially a consensus here 

that the middle-income tax cuts should be made permanent without being paid for. 

So I find myself pleading that anything beyond that should be 

paid for. You want to go one dollar beyond making the 2009 estate 

tax parameters permanent? Please pay for it. You want to go $1 

beyond what the President has proposed on the 2001 and 2003 tax 

cuts? Please pay for it. The gentlemen on either side of me would 

say, if you are not paying for it, do not do it at all. 

Senator CARPER. All right. Good. Thank you. 

Mr. Yin? 

Mr. YIN. Senator Carper, I just would like to disagree with one 

point that Mr. Greenstein said. If he interpreted my testimony as 

saying that the middle-income tax cut should be made permanent 

without paying for it, then he misunderstood my testimony, because my testimony would be exactly the opposite. 

Senator CARPER. They are saying no, that is not—— 

Mr. YIN. That is fine. 

On the broader point, Senator Carper, I think that most people 

would view the current financial crisis as a very unfortunate series 

of events that makes the long-term situation even worse, and I am 

sure that that is true. On the other hand, I think that if you look 

at the bright side, it actually provides a ‘‘teaching moment.’’ The 

American public is now seeing just a tiny little glimpse of the future that we will face, a much more dire situation than we face 

now, if we do not take serious steps very soon to address it. 

And so I think that you, as our Nation’s leaders, have an opportunity to use this very difficult moment for all of us to say, look, 

we are not going to do anything. We are going to try to get the 

26 

economy rolling again as quickly as we can. We understand the 

need to do that. But in terms of longer-term policies, including the 

issues before us today, if we do not take these steps, this experience right now is nothing compared to the hardship that you all 

are going to face in the future. 

It is obviously going to take leadership. I am not suggesting that 

this is an easy thing to do, and I am not suggesting that you and 

your colleagues will be able to develop consensus very quickly, but 

it does give you an opportunity to make that point. 

Senator CARPER. Thank you. 

Mr. Taylor, you are not exactly a disinterested visitor here. So 

is there anything you want to add to it, or take away? 

Mr. TAYLOR. Well, again, I cannot report on any consensus on tax 

policy, but we do survey research. We take the temperature of the 

American public. We did a major survey on these questions a little 

over a year ago, really just at the eve of the onset of the current 

recession. We asked people, in your view, is it more or less difficult 

for middle-class people to maintain their standard of living now 

versus 5 years ago. Eight in 10 said it is more difficult. 

So all I would suggest to you is, there is a consensus in public 

opinion that life for the middle-class has gotten more difficult in 

this decade. I think inevitably, as you elected officials make your 

determinations on all of these matters, that will have to be a factor 

you take into account. 

Senator CARPER. All right. Thank you. 

The last question I want to ask on the record deals with the estate tax. In speaking to that, or asking you to speak to it, I want 

to reflect on what we did when we developed the Alternative Minimum Tax a number of years ago. When we created that, we did 

not index it to inflation. As we take up the tax code later this year, 

one of the items that we will probably address is the estate tax. 

I started suggesting a number of years ago that what we might want to do is preserve an exemption of $7 million per couple, which 

is pretty much where we are now, and to sort of freeze in place the 

rate on that, which is not exempted at 45 percent, but to index the 

exemption by some deflator, CPI or some deflator, as we go forward. We probably should have done something like this in, I 

guess, 1986 when we adopted the AMT, because now we have some 

30 million Americans whom I think are facing the threat of having 

to pay the Alternative Minimum Tax, and that is not what we had 

in mind. 

So my question of the panel is, if we do take an approach—and 

I think the administration actually suggested something similar to 

what I offered a couple of years ago—and we actually do that, 

freeze in place the 45-percent rate, take the exemption at $7 million per couple and then index it, or do not index it. Should we 

index it? I think if we do not, we invite what happened with the 

AMT, in time. 

Mr. Yin? 

Mr. YIN. Senator Carper, I do not know whether $7 million is the 

right figure or not, but whatever the figure is, assuming that that 

is the consensus of the Congress, it does make sense to index it. 

Without indexing it, you are in effect saying, well, this is the figure, but we are going to gradually let that figure erode. If, in fact, 

27 

$7 million is the appropriate level that you have determined, then 

you should make it meaningful by indexing it. 

Senator CARPER. Thanks so much. 

Mr. Greenstein? 

Mr. GREENSTEIN. I think you are referring to the 2009 parameter of $3.5 million for an individual, effectively $7 million per couple. 

Senator CARPER. Yes. 

Mr. GREENSTEIN. I agree conceptually that, if you are setting a 

level, it makes sense to index it. My recommendation would be— 

again, it is getting back to the fiscal concern, which I know you 

very much share—to try to pay for the indexing cost by getting into 

the guts of the estate tax. There are lots of special rules and 

things. Look for a few things to tighten—we would be happy to give 

you a list of options—to offset the cost of the indexing. There are 

a few areas that really can be tightened; things may be a little 

looser than they should be. 

Senator CARPER. Thank you for that offer. We accept. We accept. 

Mr. Viard? Last word. 

Mr. VIARD. Yes. I agree conceptually that any exemption amount 

should be indexed. From a conceptual standpoint, pretty much any 

dollar value in the tax code should be indexed. 

From the standpoint of capital accumulation, I do think that the 

rate of the estate tax is more important than where the exemption 

level is set at. I do share Mr. Greenstein’s views that, if the estate 

tax is retained, there are plenty of ways it could be reformed to 

make it more efficient and limit some of the tax avoidance opportunities. 

Senator CARPER. That is great. All right. 

Well, this has been helpful for me. I apologize. I have to let you 

know, we are also on a number of committees, and another one of 

my committees was meeting, and it was important for me to be 

there. I could not be here and missed your testimony, but I will 

have a chance to review it. 

Thank you so much for your very thoughtful responses and for 

your efforts to help us try to find common ground. Thanks so much. 

Now, I do not have a gavel to bang, but if I did, I would do that 

and say we are adjourned. Thank you. 

[Whereupon, at 11:33 a.m., the hearing was concluded.] 

(29) 

A P P E N D I X 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD


64349001.eps
30 


64349.002
31 


64349.003
32 


64349.004
33 


64349.005
34 


64349.006
35 


64349.007
36 


64349.008
37 


64349.009
38 


64349.010
39 


64349.011
40 


64349.012
41 


64349.013
42 


64349.014
43 


64349.015
44 


64349.016
45 


64349.017
46 


64349.018
47 


64349.019
48 


64349.020
49 


64349.021
50 


64349.022
51 


64349.023
52 


64349.024
53 


64349.025
54 


64349.026
55 


64349.027
56 


64349.028
57 


64349.029
58 


64349.030
59 


64349.031
60 


64349.032
61 


64349.033
62 


64349.034
63 


64349.035
64 


64349.036
65 


64349.037
66 


64349.038
67 


64349.039
68 


64349.040
69 


64349.041
70 


64349.042
71 


64349.043
72 


64349.044
73 


64349.045
74 


64349.046
75 


64349.047
76 


64349.048
77 


64349.049
78 


64349.050
79 


64349.051
80 


64349.052
81 


64349.053
82 


64349.054
83 


64349.055
84 


64349.056
85 


64349.057
86 


64349.058
87 


64349.059
88 


64349.060
89 


64349.061
90 


64349.062
91 


64349.063
92 


64349.064
93 


64349.065
94 


64349.066
95 


64349.067
96 


64349.068
97 


64349.069
98 


64349.070
99 


64349.071
100 


64349.072
101 


64349.073
102 

Æ 


64349074.eps