Date: 1989-09-28
Speaker: VANDER JAGT (republican)
Chamber: H

Mr. Chairman and members of the committee. the winds of political controversy are blowing hard on the House of Representatives today. There is a poem that goes something like this: One ship sails east. and another west. with the selfsame winds that blow/ Tis the set of the sail. and not the gale. that determines which way you go. The vote that we cast in just a few moments on the tax increase amendment will tell the world and your districts the set of your sails and which way you want to go to obtain more revenue. the way of economic growth and expansion or the way of higher taxes. Setting sail over the banner of higher taxes I think represents a change in game plan for the Democratic majority. I had thought that in the wake of Walter Mondale the idea was to distance congressional Democrats as much as possible from the tax and tax label. and the Democrat leadership insisted that the budget summit agreement contain this sentence: "Legislative revenue will proceed legislatively only when supported by the President of the United States." I do not blame you for that. You did not want to get out on a tax Increase limb without the President there with you. Well. this tax increase amendment. which is all we are going to be voting on. changes that game plan and it sure rips up the summit agreement. paragraph 11. But what mystifies me is why in the world is there this irresistible impluse to vote for higher taxes when a rate reduction provides us with the revenue necessary .to meet the reconciliation targets? It all began when Ways and Means needed $2.8 billion in additional revenue in order to pay for the worthwhile tax benefits we added to the package. The solution seemed almost too good to be true. By lowering the capital gains rates for 2 years. people would be induced to sell their assets. pay a tax on the gain. rather than sit on their assets and pay no tax whatever. That produced $2.9 billion. and the most beautiful part was that almost twothirds of all the additional tax revenue would be paid by wealthy individuals. It is a way of soaking the rich to pay for the tax benefits that we had extended to struggling students and working mothers. but there is just one little problem to a tax and tax- liberal. A taxpayer is also a tax beneficiary. and even though there are three beneficiaries earning under $50.000 for every beneficiary over $50.000 in the JenkinsArcher capital gains reduction. the drafters of this tax increase amendment said. We would rather deny relief to the small business man. to the farmer. to the senior citizens who worked and saved a lifetime for a nest egg and didnt want government to tax away the gain as they try to enjoy the fruits of their labors. we would rather deny any relief to those people than give any kind of benefit to a successful achiever and producer. The class warfare would not permit the relief to that middleincome and lowerincome bulk of the American population that would be receiving the benefit. and thus history is ignored. A little over 8 years ago I stood here and pleaded with my colleagues to vote for the 25percent rate reduction across the board for every American. rich and poor alike. and that was to stimulate the sagging economy that had been left behind by Jimmy Carter. Democrats joined with Republicans to launch that economic. expansion. which now in its 82d month is the longest. strongest. most sustained economic expansion by any country in the history of the world. 20 million additional Jobs added and black unemployment at the teenage level at the lowest level in the history of our country as that economic expansion provided jobs and opportunity for all Americans. And you know what? The rich are paying dramatically more total dollars in taxes and a bigger percentage of the tax pie than before the cut in rates. and that trend continued in the tax reform of 1986. when under the vision. the courage and the leadership of the gentleman from Illinois tax benefits were sacrificed to drive those rates down to 15 percent and a top rate of 28 percent. and economic expansion continued. Jobs were created and the rich paid a still greater percentage of the total tax pie. The Ways and Means tables tell us that 2 years of capital gains reductions continue that same trend. with the rich paying more total dollars in taxes and a bigger percentage of the total tax pie. We to be consistent with tax reform should continue in that reduction of reducing the rates to provide incentives. but no matter what you think of capital gains reduction. for heaven sakes. do not vote yes on this tax increase that is the opposite of tax reform and the unraveling. putting back into the Tax Code tax benefits of timber and IRAs and then raising the taxes and adding a higher tax bracket in order to pay for it. That is the unraveling surely of tax reform. As our Ways and Means Committee chairman told us in the Ways and Means Committee. when you start down that slippery slope. there is no stopping. and we have to constantly raise the rates on more and more people to pay for the benefits we put into the Tax Code. Surely. surely we want to continue in the direction that we have been traveling of stimulating the economy. to expand it so lower rates produce even more revenue from an expanding economy. rather than a tax increase which would take $35 billion out of the private sector in the next few years. so that we would then have to tax more and more people higher and higher rates to produce the same amount of tax revenue from a shrinking economy. Let us continue to set our sail in the direction that we have been traveling for 8 years that has been so successful of initiative to expand the economy and create greater jobs and opportunity for all Americans. To vote for this tax increase when the revenue is not necessary to meet reconciliation is to announce to your constituents. in the paraphrased words of Irving Berlin: You can count on it. I will be taxing you always. Not Just for this day. not Just for a year. but I will be taxing you always. forever more and more and higher and higher.