Don Nickles

Mr. NICKLES

Mr. NICKLES. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. NICKLES. Mr. President, tonight I offer an amendment on behalf of myself, Senator Hagel, Senator Cleland, and Senator Domenici which would increase the deductibility of health insurance for self-employed individuals. I will not take long. I mentioned it a couple of times during debate on the Durbin amendment. The current law allows for self-employed persons to deduct 40 percent in 1997. We actually increased that--if I remember, Senator Dole, Senator Roth and several of us last year in the last Congress increased that--over several years, and eventually by the year 2004, it would be at 60 percent. We would like to accelerate that. That is what this amendment does. It would improve it from 1997, the year we are in, from 40 percent to 50 percent. In 1999, it improves it from 45 percent to 60 percent, and in the year 2003, it improves it from 50 percent to 80 percent, and so on. We want to improve and accelerate health insurance deductibility for the self-employed. Mr. President, I used to be self-employed, and it always bothered me that I used to manage a corporation and the corporation could deduct 100 percent of health care premiums, but my company, when I was self- employed--it was a janitor service--could only deduct 40 percent. I would like parity, and, hopefully, eventually we will get there. In this amendment, we don't get there for several years, but at least we will accelerate it and make a better deal for self-employed persons at a more rapid rate. On behalf of my colleagues cosponsoring this amendment, I send the amendment to the desk and ask for its consideration.

Mr. NICKLES. Mr. President, I yielded to the Senator from Wisconsin for 2 minutes, and now I wish to reclaim the floor.

Mr. NICKLES. Mr. President, I think I have the floor.

Mr. NICKLES. Mr. President, I will be happy to yield to the Senator from Wisconsin for 2 minutes without losing my right to the floor.

Mr. NICKLES. Mr. President, I thank you for getting order in the Senate. Mr. KOHL addressed the Chair.

Mr. NICKLES. Mr. President, the Senate is still not in order.

Mr. NICKLES. I announce that the Senator from Kansas [Mr. Roberts] is necessarily absent.

Mr. NICKLES. I again remind my colleagues. I urge them to vote ``no'' on the Durbin amendment. There may be a point of order raised on it. I hope they sustain the point of order. I again remind them that right after this amendment, we will be offering an amendment that will have a significant improvement on deductibility for self-employed persons, one that I believe we cannot only pass but hopefully prevail in conference on as well.

Mr. NICKLES. Would the Senator yield 1 minute to me?

Mr. NICKLES. Mr. President, one, I want to ask my colleagues to vote no on the Durbin-Bond amendment and tell them I think I have a pretty good record--I heard the support of NFIB for deductibility for the self-employed. I used to be self-employed, so I support that. For my colleagues' information, I will be offering an amendment after the Durbin amendment, very soon, that will accelerate and allow self- employed people to deduct a greater percentage for their health insurance at a much faster rate than now is under existing law. It does not go to 100 percent, but likewise we do not increase taxes another 10 cents, which I think a lot of people, not just from tobacco States, are saying ``Wait, we are already increasing it 20 cents, almost doubling the tax, should we do another 10 cents?'' I might mention the Finance Committee said we would stop at 20 cents. I do not think the Durbin amendment will become law. I want to let my colleagues know we will offer an amendment that will accelerate deductibility for the self-employed. We will be offering that subsequent to this so they can vote no on the Durbin amendment, vote yes on the amendment that Senator Hagel and I will be introducing momentarily that will give the self-employed a greater benefit for deducting their insurance. I yield the floor.

Mr. NICKLES. Mr. President, would the Senator from Delaware give me 4 minutes?

Mr. NICKLES. That we go ahead and debate the Senator's amendment until he is satisfied with it, his cosponsors are satisfied with it, and then maybe at that time you can set it aside, and we will go ahead and vote on the other amendments, and you then have had your debate, and we will have a vote on yours somewhere in the pecking order.

Mr. NICKLES. Will the Senator yield, not for the purpose of a question, but maybe for a suggestion?

Mr. NICKLES. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. NICKLES. I move to lay that motion on the table. The motion to lay on the table was agreed to. Several Senators addressed the Chair.

Mr. NICKLES. I announce that the Senator from Kansas [Mr. Roberts], is necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Kansas [Mr. Roberts], is necessarily absent.

Mr. NICKLES. I announce that the Senator from Kansas [Mr. Roberts] is necessarily absent.

Mr. NICKLES. Mr. President, I wish to compliment my colleague from Montana for his statement. I will yield the Senator from Missouri 5 minutes.

Mr. NICKLES. How much of the benefit do they get out of this tax bill? The highest 10 percent pay almost half the tax. How much benefit do they get out of this bill: 13 percent. The highest 1 percent, the wealthiest people in this country, what percentage of the tax do they pay? They pay 18 percent. How much benefit do they get out of this bill? They pay 18 percent. Of the total tax bill of this cup, the highest 1 percent pay 18 percent of the total income tax. How much benefit do they get out of this bill: Two percent. Mr. President, the wealthy are not making away like bandits on this. This is a family-friendly tax bill. If one believes that we should put the majority of this money in to help families, we have done it in the Finance Committee package. We have done it with the tax credit that says if you have 3 children you get $1,500 that you get to keep, that you get to save, and if you pay $1,500 in income tax, a little over $100 a month, you get to keep it. It is yours. You decide how to spend it. That is in the bill that passed the Finance Committee. You can go to your constituents, as long as their incomes are less than $75,000 and say, what is your income tax, look at your W-2. If you have two kids, that is $1,000 a year you get to keep. If you have four kids, that is $2,000 of your money that you get to keep. That is in our proposal. It is not in the Democrat proposal. Senator Daschle's proposal is $250 for the first couple of years, $350 maybe if you put it into an IRA. Mr. President, there is no comparison between these two packages. Unfortunately, Senator Daschle's proposal is really redistribution of wealth. It is not a tax cut. The Finance Committee proposal that we have is not perfect, but at least it is very family friendly. The $500 tax credit is real. It will apply to all families up to incomes of $75,000, where we start phasing it out, $110,000 for couples on the child tax credit. I urge my colleagues to reject the Daschle amendment, have bipartisan support and overwhelmingly vote for passage of this bill and overwhelmingly reject another income redistribution scheme that is propagated by my colleagues on the other side. I might mention, as well, Mr. President, most of the people who have spoken out in favor of Senator Daschle's amendment, one, voted for the 1993 tax bill which was not a tax cut, it was a tax increase. They really have not been interested in tax cuts. They have been interested in tax increases. If you look at this proposal that they have, it is really trying to figure out how can we take more money from some people and give to somebody else. It is redistribution. Mr. President, I urge my colleagues to vote no on their proposal and to support the proposal that was reported out of the Finance Committee. I yield the floor. Exhibit 1

Mr. NICKLES. In 1990, the maximum benefit was $953 for a family with 2 or more children. In 1993 it was $1,511. This year, the maximum benefit for two children is $3,680, and 90 percent of that is not a tax credit. It is Uncle Sam writing a check. It is not reducing somebody's tax liability. In most cases these are not Federal income tax liabilities, but Uncle Sam writing a check. Somebody said that is to make up for payroll taxes. They pay Social Security taxes, yes, 7.65 percent, but the tax credit is 40 percent, far and above what they pay in Social Security taxes. I just mention to my colleagues, this is the welfare program, and our colleagues supporting Senator Daschle's amendment want to expand it. They want to give a child care tax credit and expand the earned-income credit, give both, so they can say we are giving money to low-income people. The Tax Code should not be for redistribution of wealth. If we are going to have a tax cut, it should be for taxpayers. They say this plan that passed the Finance Committee is unfair because it advantages upper income. Absolutely false. Eighty-two percent of this package in the first 5 years falls to families with incomes less than $75,000 or $80,000; 75 percent of the whole package falls to families less than $75,000. Then a couple of comments, well, it benefits the wealthy. They do well because we have capital gains. Absolutely false. I ask unanimous consent to have printed in the Record another chart, showing the highest 10 percent of the taxpayers pay 47 percent of the tax.

Mr. NICKLES. Mr. President, I yield myself 10 minutes. Mr. President, first, I wish to urge my colleagues to vote no on Senator Daschle's substitute. I started to call it the Democratic substitute. I hope that is not the case. I really truly hope that is not the case, because we passed a bipartisan bill, one that had Democrats and Republicans supporting it. For those people that are saying this bill that was passed is for the wealthy and so on, that is absolutely hogwash. This bill that we passed in the Finance Committee is very family friendly. The bulk of the benefits, over 80 percent of the benefits, are for families with kids and/or education. The child tax credit, for example, starts phasing out with families or individuals that have incomes above $75,000. Personally, I think it should be for all families, but we did not make it that way. I think we should make it for all families. Upper-income people will not get it. So this idea that we are just benefiting upper-income people is absolutely not true. Upper-income people, the highest-income people, do not get the family tax credit. Everybody else does. I think we should make it apply to everybody, but we didn't. There are income limits on that. There are income limits on the education tax incentives. They start phasing out with individuals at $40,000 and couples at $80,000. A lot of times we will not be able to tell our constituents that everybody gets this. People with incomes up to $40,000 will get it if they are individuals or couples at $80,000, but above that they might not. We cannot brag about this too much because not all Americans get the education incentive. Not all Americans get the child tax credit. I tell you, a lot more Americans will get these tax benefits under the package that is before the Senate, the bipartisan finance company, than under Senator Daschle's alternative. Senator Daschle's alternative is redistribution of wealth. It is not a tax cut for taxpayers. It is using the tax system so we can channel more money to people that do not pay taxes in the first place. It is kind of complicated because he says we want people to get the child care tax credit, and then we also want them to get the earned-income credit in addition to that. Wait, what is he doing? On the child care tax credit, that is only $250. Ours is $500. Now, there is a little difference here. Ours is for $500, his is for $250. Ours apply to children up to age 18 and below age 13 everybody gets $500. In Senator Daschle's approach, they get $250. If they put it in an IRA, they get $350. That is the Government telling people what to do. Nobody gets any benefit under Senator Daschle's proposal if they are between ages 13 and 18 until the next century--until the year 2000. That does not make a lot of sense. He says he has a child credit, but it is only $250; but if you are 14 years old, you do not get anything under their proposal. Why? Well, the reason why he did that is to have the credit be refundable. I urge my colleagues when they say tax ``credit refundable,'' really what they mean is we want to have a spending program. This is not a program to cut taxes. It is a program for Uncle Sam to spend money through the tax credit. President Clinton likes this. There is a big increase in the so- called earned-income credit. I hope we change the name of that section of the Tax Code later on today or tomorrow. But they use that Tax Code as refundable tax credit to write people checks. My colleagues on the Democrat side said we want to give whatever child tax credit and earned-income credit on top of that so Uncle Sam can continue writing more checks. I ask unanimous consent to have printed in the Record at the conclusion of my statement, a chart showing how much the earned-income credit has expanded in the last several years.

Mr. NICKLES

Mr. NICKLES. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. NICKLES. I announce that the Senator from Kansas [Mr. Roberts] and the Senator from New York [Mr. D'Amato] are necessarily absent.