Mr. Speaker, our economy is on the ropes, with unemployment rising, investments eroding, and families feeling increasingly insecure about their futures. We have serious problems. But they will not be solved by wrong remedies. I will vote…
Mr. Speaker, our economy is on the ropes, with unemployment rising, investments eroding, and families feeling increasingly insecure about their futures. We have serious problems. But they will not be solved by wrong remedies.
I will vote against this bill tonight for two reasons: First, it is bad tax policy and questionable politics. And second, it is reckless and irresponsible fiscal policy, and we can't afford it.
Basic principles of tax policy include certainty and fairness.
This bill isn't certain. It undermines rational tax planning or responsible budgeting. It shoehorns a size ten tax cut into a size three budget. That may be impressive acrobatics, with enough twists and turns to rival a pretzel. But it's bad policy, as even the sponsors candidly acknowledge.
To fit under the budget caps, the bill has more sunsets than a Florida vacation: now you see the tax break; now you don't. Here for two years; gone tomorrow. Every provision but one in the bill expires between 2004 and 2008, sinking beneath the horizon.
Taxpayers are confused now by our Tax Code. This adds complexity. Indeed, it's complexity on stilts. How can taxpayers plan with disappearing provisions? They can't. That's an antigrowth policy.
One thing is certain, however. The bill invites tax shelters. It's a bonanza for them. The Senate's curb on tax shelter abuses by corporations vanished in the conference. And loophole hunters will surely shift income from wages to capital gains when possible to take advantage of lower rates.
Nor is the bill fair. Look at the numbers. Over half of the tax cuts go to the wealthiest five percent of taxpayers. Almost two-thirds goes to the top 10 percent. But the bottom 60 percent of taxpayers get only 8 percent of the tax cuts, averaging less than $100 a year over the next 4 years.
An Urban-Brookings Institution Tax Policy Center analysis shows that 36 percent of all U.S. households would receive no tax cut at all in 2003 under the conference bill, and 53 percent of households would receive a tax cut of $100 or less.
For households in the middle of the income spectrum--the middle fifth of households--the average tax cut in 2003 would be $217. But taxpayers with incomes about $1 million a year would average over $90,000. That's not fair.
Someone once said that you need to set a banquet table for the rich to get a few crumbs for the poor. This isn't even a few crumbs.
The child credit increases from $600 to $1,000 in the bill. But the refundable part of the child tax credit, targeted to working families with incomes between $10,000 and $30,000, isn't accelerated. Twelve million low-income children and their families--one of every six children in the Nation--were dropped by the conferees.
Fair? Here's what the Center for Budget and Policy Priorities said: ``The final agreement is, in fact, tilted against lower-income working families with children. The conference agreement accelerates all of the child tax credit and marriage penalty relief provisions of the 2001 tax-cut legislation that benefit middle- and upper-income families, while failing to accelerate either of the child tax credit and marriage penalty relief provisions enacted in 2001 that are targeted on low- and moderate-income working families. The consequence is that low-income working families--the very group most likely to spend rather than save any tax-cut dollars they receive--are largely left out of the legislation.''
There was also case to be made for eliminating the double taxation of dividends--also good tax policy, if we could afford it. But this bill skipped that, too.
So it is bad tax policy, lacking fairness or certainty, and missing the reforms and balance so essential to good legislation.
And I will vote against this bill also because it's irresponsible fiscal policy.
I think America knows we're borrowing money to pay for this, that it deepens our budget deficit, that it risks our future. And the polls reflect that. So America understands.
But our citizens may not realize how reckless this tax cut really is. President Bush proposed a $726 billion tax cut over 10 years. We couldn't afford that since our surpluses have evaporated. But this bill will cost far, far more. It's a Trojan Horse of hidden costs.
This bill is advertised as costing $350 billion, less than half of Mr. Bush's cuts. But if the bill's provisions, except the Alternative Minimum Tax brief relief, are extended, as all observers seem to expect, the cost through 2013 will be $807 billion to $1.06 trillion. And we clearly can't afford that--deficits as far as the eye can see, as we hand the bill to our children and grandchildren.
Mr. Speaker, the goals originally set for this bill are noble, and needed: jobs, growth, tax relief. Unfortunately, the result in this conference bill fall short. There are measures we could have passed that would have provided the right balance and the right help. But this isn't one of them. Instead, it is the height of fiscal folly.
And so, Mr. Speaker, this bill is bad tax policy, bad fiscal policy, unfair, and unwise. It helps those who don't need help. It hurts those who do. And we can't afford it.
I urge my colleagues to vote no on H.R. 2.