Date: 1981-07-29
Speaker: PHILIP M. CRANE (republican)
Chamber: H

Mr. Chairman. first of all I want to congratulate our distinguished chairman of the Ways and Means Committee. DANNY ROSTENKOWSI. for the outstanding job that he did In meeting his timetable. and for his equity and fairness In the preparation of this bill. At a recent meeting some of us on the minority side had at the White House. one of my colleagues made the observation that the chairman has produced the secondbest tax bill written in the last 20 years by the Congress of the United States. Unfortunately for the chairman. there Is a superior bill. the bipartisan ConableHance bill. that Is before us today. I would urge all of my colleagues to get behind this bipartisan effort because the deficiency. sad to say. of the committee bill lies in the fact that It Is tax relief rather than tax cuts. If my colleagues will look at the magnitude of the problem. they will note that taxes rose by 49 percent In the years 197174. However. they rose by almost 250 percent between the years 1971 and 1980. If my colleagues look at the costofliving Increase over that same period of time. it was about 100 percent. So obviously we are confronted with a situation where Americans are bearing the most confiscatory tax burden ever in the history of this country. What is urgently needed under the circumstances is a bona fide tax cut. That Is why. with all of the cooperation and the willingness on the part of our distinguished chairman to address this problem. his bill is nevertheless deficient. The President has noted that we can anticipate. by the most conservative estimates. a 22percent Increase in taxes over the next 3 years. That Is why it Is essential that we get 51010 in the way of tax cuts so as to provide an honesttogoodness tax cut and then. at that moment. index the Tax Code so as to eliminate the vicious inflation tax that has been eroding the savings and the earnings of overtaxed Americans for 1o these many years. I hosted a meeting back In the spring of 1974 with Prof. Milton Friedman and about 50 of our colleagues. Professor Friedman. as my colleagues know. has. been in the vanguard of promoting the idea of indexation of the Tax Code. He observed at the time that if you have just a 7percent annual rate of inflation you must double your income every decade to break even. But the fact is you do not break even because you are progressively pushed Into a higher tax bracket. I know there are a lot of compelling reasons to avoid addressing this point because it is advantageous from the politicians standpoint to spend like a drunken sailor and then avoid the consequences of that spending on the eve of each election by giving highly advertised tax cuts that are. In fact. not cuts but are simply relief from the new taxes that have already been imposed. The most insidious of those new taxes is the inflation tax. I introduced the first indexation bill here In the House back In May of 1974. It has enjoyed growing support and the man who has been most aggressively promoting It In committee Is our colleague. the gentleman from Ohio . The gentleman from Texas was the first Member to get indexation of any portion of the Tax Code In the capital gains area. It cleared this House. It Is a misunderstood concept. but what It has the practical effect of doing Is forcing the Members of the House of Representatives who have that responsibility to go back to the voters on the eve of each election and tell them if we spent more than we took In that we are going to impose the surtaxes that may be dictated to try to get our books in balance rather than taking it in that hidden manner out of the purchasing power of the dollar of overtaxed. hardworking Americans. This is the most honest thing that this body has done on taxes. I congratulate the administration. I congratulate the sponsors and the promoters of the ConableHance bill. I deeply regret that in the committees bill. the chairman did not include this important feature because on this issue there should not be Republicans. not Democrats. only Americans who believe In Justice. honesty. and equity. On another point. some have claimed there will be an Inflationary impact in the Presidents tax cut. The question I would put to my colleaguesand I would put to all Americansis. Why is it more inflationary for hardworking Americans to spend their dollars than for this body to spend them? Every poll has Indicated that If one provides honesttogoodness tax cuts to Americans. In every income bracket. They intend to save some of the cuts that they will enjoy. I guarantee the Members. and every American knows. that if those dollars find their way into the coffers of the U.S. Treasury. not one penny of that money will be saved. Quite the contrary. based upon Past experience. we will spend It all and then some. Mr. Chairman. another ingredient of the ConableHance bill. I have championed for most of my congressional careerindeed. I was one of the first Members of Congress to introduce legislation to eliminate estate and gift taxes. The estate tax Is by definition a tax on widows and children. A man works hard all of his life to start and run a small business. After all that work and sacrifice. after becoming successful. he commits the ungracious act of dying. For his efforts. the Federal Government comes in and Imposes a deathpenalty tax on his bereaved widow and children. The death taxa more accurate descriptionwas enacted In 1916. The theoretical objective was to break up concentrations of wealth In some of the major families In our society when In fact it has not achieved that objective. It has not done much to the Kennedy. Rockefeller. or other very large estates. but it has hurt smaller ones. Payment of the estate taxes has very frequently forced inheritors to sell small farms or businesses. The tax has forced mergers. thus resulting In a trend toward concentration of economic power Instead of preservation of small independent business. An estate is. In reality. a capital investment in the future. For the Individual who toiled and sacrificed to build an estate. who hoped to provide his. heirs with more than he Inherited. his hopes have for too long been dashed. The tax laws affecting Inheritance have constituted a disencentive to savings and Investment. It is fortunate for taxpayers. for widows and children. for estates large and small. that Congress Is finally taking action to redress most of the damage done. It is only a pity that It .took us so long. To conclude. let me address my Democratic colleagues and the few of my Republican associates who have* reservations about the vote today. The time has come when partisan politics must yield to a greater pressure. The time has come when we must be compelled by a higher calling. the preservation of this great Republic. We have arrived at the point where we as a Congress must account for past spending actions and the past tax Increases that all of us agree are out of control. And the way we must address this crisis. the only honest way we can speak to this issue. Is to make a true and lasting change. I think all of us agree this change In direction is most dramatically and forcefully presented in the bipartisan proposal offered by our distinguished colleagues. Congressman CONASLE and Congressman HANCE. Last year a revolution occurred In this country. a political revolution. The American people spoke with a great voice and the foundations of the past were shaken. Many of the most powerful congressional leaders who represented this past were defeated at the polls in this popular ground swell. The message was clear. less government and more Individual responsibility. Today we have the opportunity to respond to that voice. Today we have the opportunity to vote to support that message. It Is my strongest feeling for the sake of our country that we should do so. It Is also my strongest feeling as well. that those who do not. will again be choosing to run against what most certainly will be the prevailing wind in 1982. Based upon this. the choice should be clearpassage of President Reagans bipartisan substitute. This is how I will cast my vote today and I would urge my colleagues to do the same.