Permanent Extension of 10-Percent Individual Income Tax Rate Bracket

PERMANENT EXTENSION OF 10-PERCENT INDIVIDUAL INCOME TAX RATE BRACKET -- (Extensions of Remarks - May 19, 2004)

SPEECH OF
HON. RUSH D. HOLT
OF NEW JERSEY
IN THE HOUSE OF REPRESENTATIVES
THURSDAY, MAY 13, 2004

Mr. HOLT. Mr. Speaker, I rise in strong support of making permanent the 10% tax bracket for low-income families. I am supporting the Tanner substitute because it, unlike the underlying bill, is paid for and does not drive our country deeper into debt.

The Tanner substitute, like H.R. 4275, makes permanent the change in our lowest tax bracket from 15% to 10%, and exempts from taxation the first $7,000 for single taxpayers and $14,000 for married couples. The Tanner substitute, however, requires that the funds needed to pay the tax cut do not come from Social Security and Medicare trust funds. Passing the Tanner substitute would help low-income families protect Social Security and Medicare while also helping eliminate the need to borrow from foreign banks to fund the federal government.

Mr. Speaker, today the national debt is the largest in history. Americans now collectively owe more than $7 trillion.
That is $24,304 for every man, woman, and child. We have borrowed an additional $280 billion so far this year. The Majority would now like to borrow another $218 billion with the passage of this bill.

Here we have another tax cut that is not being paid for, even as the Bush Administration and the leadership of this Congress spend more than the American government has ever spent on homeland security and on all the other expenses of running the government-especially the huge costs of the war in, and occupation of, Iraq. The resultant borrowing places the burden of repaying our debts on our children.

I want the people of this country to realize that, right now, we owe collectively, in hard money, about $4 trillion to foreign countries. We owe Japan $607 billion; China (including Hong Kong) $205 billion; the U.K. $137 billion; Taiwan, $50 billion; Germany, $45 billion; OPEC countries, $43 billion; Switzerland, $41 billion; Korea, $37 billion; Mexico, $32 billion; Luxembourg, $26 billion; Canada, $25 billion-the list goes on and on.

More tax cuts without offsets will not only jeopardize critical public services now, but they will also hurt Americans well into the future. Massive deficits now create large debt and will create high interest payments that will crowd out spending on public investments for future generations. Moreover, these deep deficits threaten to increase interest rates in the future-making it harder for Americans to buy homes and afford higher education and making it harder for businesses to raise capital.

The President is pretending that we can have war without sacrifice. Eventually, someone has to pay. I believe Chairman Greenspan's recent comments are appropriate: "Our fiscal prospects are, in my judgment, a significant obstacle to long-term stability because the budget deficit is not readily subject to correction by market forces that stabilize other imbalances. The free lunch has still to be invented."

Now, we, all of us Americans, have to pay interest on the debt. We are literally squandering the wealth of this country by not paying for our tax cuts. The underlying bill is a good idea-keeping the lowest tax bracket at 10% helps all taxpayers equally. Unfortunately, by not paying for the tax cut, we are contributing to a far greater problem-the breathtaking fiscal irresponsibility that is going on here in this town.