Don Nickles

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Alaska (Mr. Stevens) is necessarily absent.

Mr. NICKLES. I announce that the Senator from Alaska (Mr. Stevens) is necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Alaska (Mr. Stevens) is necessarily absent.

Mr. NICKLES. I announce that the Senator from Alaska (Mr. Stevens) is necessarily absent.

Mr. NICKLES. I announce that the Senator from Alaska (Mr. Stevens) is necessarily absent.

Mr. NICKLES. I announce that the Senator from Alaska (Mr. Stevens) is necessarily absent.

Mr. NICKLES. I announce that the Senator from Arkansas (Mr. Stevens) is necessarily absent.

Mr. NICKLES. I announce that the Senator from Alaska (Mr. Stevens) is necessarily absent.

Mr. NICKLES. I announce that the Senator from Alaska (Mr. Stevens), is necessarily absent.

Mr. NICKLES. I yield the Senator 15 seconds.

Mr. NICKLES. Mr. President, I thank my friend and colleague, Senator Grassley, for his leadership on this bill, as well as Senator Baucus. I think they have managed it very well, both in committee and on the floor. I also would like to inform our colleagues that we are going to begin a series of rollcall votes at about 6 o'clock. I urge Members to come to the Chamber and stay in the Chamber. We are going to have these amendments within a strict timeframe. My guess is there will be 10 or 12 minutes, and they will be enforced. Again, our colleagues should be aware that these votes will start and begin probably about 6 o'clock, and we are going to have numerous rollcalls, probably a lot more than we need. I urge my colleagues, many of whom offered amendments, to accept voice votes, if possible. I urge my colleagues to vote in favor of this package. It is not perfect. I have heard some people say it is too big. I disagree. This is a very timid package. This is about one-fourth of the surplus. I heard a couple of our colleagues say: Wait a minute, maybe we are reenacting the mistakes made in 1981, the massive tax cuts in 1981. I looked at the amount of money we raised in 1980 from all sources in the Federal Government. It was $517 billion. In 1990, the Federal Government raised over $1 trillion. It doubled in that 10-year period of time, the revenues that came in. What happened in that interim is that spending went up even faster than revenues. So I don't think it was because of the tax cuts, although we had a very significant tax cut. If you look at the 1981 tax bill, the 1986 tax bill, you saw maximum rates go down significantly. All taxpayers had significant rate reductions. The maximum rate was 70 percent in 1980. It was 28 percent in 1988. So it was a big change. This bill is much more timid. And for those who are saying we have cut too much for the wealthy, I don't think they have read the bill. The maximum tax rate under the income-tax code right now is 39.6 percent. Guess what it will be in December of the year 2004, after this massive tax cut. It will be 38.6 percent. It will go down one point. How much did it increase in the 1993 tax increase? The maximum tax rate then went from 31 percent to 39.6. It went up 8.6 points. In addition, what used to be a cap on the Medicare tax was eliminated. So you can add another 1.45 for an individual. You can double that for a couple, so that is another 2.9. So the effect of the 1993 tax increase was moving the maximum rate from 31 percent to 42.5 percent. That is an 11.5-point increase for maximum taxpayers. This bill, in the first 4 years, reduces that only 1 point, only one- tenth as much as the increase that we had, and it just so happens the increase in 1993 was retroactive back to January of 1993. So my point is, this is a very timid tax cut compared to the tax increase we had in 1993. Those are just the facts. We are slow, very slow in phasing in the tax cuts, the rate cuts for all taxpayers. They are not fully in effect until the year 2007. I hope we can accelerate that. It takes us too long to get there. But I make this point because I keep seeing amendments: We will delay the effective date for the high tax payers. I guess they don't want to give taxpayers tax cuts. I don't follow that. It is like using the Tax Code only for redistribution of wealth. Let's load up more on the low-income side. The bill we have before us does a lot for low-income taxpayers. It creates a 10-percent rate. Those taxpayers were paying 15 percent. That is a 33-percent reduction. That is $600 in savings for taxpayers on the low-income scale, married couples. That is $600 more that they get to keep if they have $12,000 in adjusted taxable income. That is very positive. So that is weighted toward the low income. There is also a $500 tax credit per child. We passed the first $500 tax credit per child in 1997. That is very positive. If you have four kids, as do I--they are grown now, so I don't get it--who are dependents, that is $2,000. Over the period of this bill we double that. So we make it a $1,000 tax credit per child. This bill even makes it refundable. I don't think that is very good policy, but it is in this bill. So my point is, this bill is loaded very much towards low-income groups. For those people who say we want to load it more, I disagree. We ought to have a tax cut for taxpayers. The greatest percentage of tax reduction definitely goes towards low- and middle-income taxpayers in this group. Certainly, individuals who have kids, certainly individuals who are paying that 15-percent rate, who have income on the lower side, they get a very significant rate reduction. And they get it retroactive to January 1 of this year. All other taxpayers don't get a rate reduction until January of next year and only one point. In some cases, that is only one-tenth of the increase they had in 1993. This bill does a lot of other things that will benefit families. It has educational tax provisions. It has savings provisions dealing with IRAs, education, making savings more affordable, enhancing individual pensions. It does other things, including the death tax. I started to say death tax repeal, but that is not until the year 2001. It does increase the exemption amount or the unified credit amount up to $1 million, $2 million, $3 million, $4 million in the ninth year--that is a positive provision--and ultimately repeal. So we don't penalize somebody for dying. The taxable event would not be when somebody died. The taxable event would be when the property is sold, and then that tax rate would be at the capital gains rate. It wouldn't be at these unbelievably high and punitive rates of 55 percent that are now present law. I urge my colleagues to vote in favor of final passage of this bill. Let's give taxpayers relief. It is long overdue.

Mr. NICKLES. I announce that the Senator from Alabama (Mr. Sessions) and the Senator from Alaska (Mr. Stevens) are necessarily absent.

Mr. NICKLES

Mr. NICKLES. Mr. President, we heard the minority leader say there are 72 million people who do not get anything out of the bill; they do not get a rate reduction because we do not reduce the 15-percent bracket. There are different ways of cutting taxes. The way we have done it is to put in a significant percentage of income. People were saying 15 percent. We said we are going to tax that at 10 percent. The net result is we cut everybody's individual taxes. If they make up to $12,000 as an individual, they get a tax cut of $300. If it is a couple, they get a tax cut of $600. That boils down to an across-the-board cut, if you want to look at that, for people who are in the 10-percent bracket; if they are married, it is a 10-percent tax cut. You can do that one of two ways. You could say let's reduce the 15- percent bracket to 13.5 percent. I have suggested that. It might make that simpler policy. That way we can say we reduced every bracket a similar amount. But the other brackets we reduced by 1 point. I suggested 1.5 points. In other words, reduce the 15-percent bracket 10 percent so we can say we reduced every bracket by the same amount. I will be happy to reduce upper brackets by 10 percent. We do not do that, certainly not retroactively. For people to assume we are not helping the lower or middle income is not factually correct. The rate reduction we have in the bill reported out of the Finance Committee exceeds 1 percent. It exceeds what we have done in every other bracket. It exceeds it for a couple reasons. One, it is retroactive to January 1 of this year. All other rates have to wait until January 1 of next year and get a 1-point reduction. On the least income rate, we give them a 33-percent reduction on their first taxable income of $12,000. That is a $600 savings, and that is over a 1-percent reduction for everybody who is in the 15-percent bracket going all the way up to $44,000, $45,000 for a joint couple. My point is there are different ways of doing it. For people to demagog and say they do not get a rate reduction, well, they get a bigger tax cut by the way we have done it. If you want to change the way we have done it and say for the 15- percent bracket we reduce it to 14 or 13.5, we could easily do that. It ignores that we give a $500 tax credit per child, which benefits that income category substantially, and ignores the fact the income tax credit is refundable over my recommendation. There is a lot of tax policy direction. I believe about $450 billion of the entire rate reduction, which is only $850-some billion, is directed on this 10-percent bracket, on the lowest income. For people to make this allegation that 72 million people are ignored is hogwash. That is not correct. We could redo it by rate reduction, we could redo it in any number of different ways, but this group gets the biggest percentage of reduction of anybody in this tax bill. Upper income people, anybody else at a 28-percent rate, 31-percent rate, 33-percent rate, 36-percent rate, 39-percent rate, get a 1 point reduction for 4 years. We are giving a great percent or point reduction for low income retroactive to January 1 of this year. I urge my colleagues to vote no on the Carnahan amendment.

Mr. NICKLES. I am happy to yield.

Mr. NICKLES. Mr. President, I yield myself 5 minutes to speak in opposition to the Carnahan amendment.

Mr. NICKLES. I never said they didn't.

Mr. NICKLES. Mr. President, might I suggest that the amendment be laid aside subject to recall by the manager of the bill, Senator Grassley.

Mr. NICKLES. Subject to the discretion of the two managers.

Mr. NICKLES. To answer my colleague's question, yes, the $600 applies to all taxpayers. The percent reduction did not happen for upper income taxpayers. The fact is they only get 1 point reduction in taxes in the first 4 years of this bill, and that is January 1 of next year. Percentagewise, lowest income people get a 33-percent reduction retroactive back to this year. My point is you can do taxes different ways. Maybe a better way is to take the 15-percent rate and make it 14 percent, not to do it in addition to the 10-percent rate. So if colleagues want to change the policy we have, not do the 10- percent rate, and move the 15-percent rate to a 14-percent rate, if they like that, I am happy, but they do not get as significant a reduction as provided in the bill before the Senate.

Mr. NICKLES. I announce that the Senator from Kentucky (Mr. Bunning) is necessarily absent.

Mr. NICKLES. Reserving the right to object, what was the request?

Mr. NICKLES. I object.

Mr. NICKLES. I would ask that both sides would have 5 minutes prior to the vote.

Mr. NICKLES. I will reclaim my time. I am not waiting for my colleague to make a speech. I think it is absurd for someone to say: We are just going to reduce the rate to 53 percent; we are going to reduce the tax 2 percent for the upper end estates and, oh, sure, at end of that time we are going to repeal it. I don't think so. I don't think that is credible. For someone to suggest we are still really for repeal but we are going to keep the rate at 53 percent, I do not think is credible. It is not going to happen. Back to this idea of how many estates, you might say in 1 year there were 28 taxable estates above $5 million, but I tell you there are thousands of estates that are subjected to this tax that are trying to avoid this tax, trying to minimize this tax; thousands in my State, millions in your State--millions? Surely a million. There are thousands in Northern Virginia. You don't have to go very far. You are talking about taxable estates around this area, if you look at high priced neighborhoods where the Government comes in: Oh, the Government is entitled to take half of that house or half of that property or half of that business because somebody passes away? What right does Government have to get 53 percent of somebody's estate? It is just absurd. It should be unconscionable. I go back to our friend, who is not the most conservative Senator with whom we had the pleasure of serving, the Senator from Illinois, Carol Moseley-Braun. We agreed we should not tax estates more than we have on personal income tax. I believe President Clinton said the same thing. That rate is 39.6. The amendment of my colleague from New York says, let's keep it at 53. And 53 is too high. I urge my colleagues, if you think the amendment is laudable for the deduction of student loan interest, I may well agree with you but not at this offset, not to gut the estate tax, not when the estate tax is one of the pillars of this bill, both for this President and this Congress and the past Congress. So let's not gut the bill. Let's find another way. Again, we are going to find out if people want to legislate or people want to try to defeat the bill. I urge my colleagues, work with some of us who want to see a bill enacted and signed into law. We will work to find a way to have greater student loan deductibility. We can do that. We can do it with 60 votes. And you will not have half the Senate going berserk. But I tell you this amendment, to gut the estate tax reduction, will not finally be successful. We are going to figure out a way to have a significant reduction in estate taxes. That is part of what a lot of us have been working on for decades. It is what we passed last year. We are going to get it done this year. I urge my colleagues, let's find another offset. If we have to, let's defeat the Schumer amendment and then we can come back and do something more on student loan deductions without gutting the estate tax deduction we have in the present bill. I yield the floor.

Mr. NICKLES. Then I will answer. My colleague could not be more wrong. The Senator does not understand the essence of estate if you think there are only 28 Oklahomans who have estates over $5 million. There are millions of estates, millions of estates in this country right now, that are effectively wasting a lot of time, energy, and resources to avoid paying this unfair, punitive tax. There are probably millions in your home State, millions in your State alone. Let me give an example. I used to own and operate a small business. It wasn't in this valuation, but it comes out on occasion when someone suffers a death and finds Uncle Sam wants a third or half. You don't want to have that happen again. You go to great lengths to make sure it doesn't happen again. So if you think this only applies to a few, you are sadly mistaken--absolutely mistaken. There is more energy and effort used in spending to avoid this tax than probably any other tax in America because it is unfair. I was third generation in the company I managed, Nickles Machine Corporation. I managed it for several years and am proud of it. I had nephews managing until recently. It is difficult to pass on a business to succeeding generations if Government comes in and takes half every time one person in a generation passes away. It is next to impossible. To think we have calculated that there are only so many taxable estates misses the whole point. There are millions of businesses, farms, ranches, and so on, where people are working aggressively to build, maybe get in that category, maybe they are not. But they do not want to be caught. They do not want to be stuck. They do not want their children to have to sell to pay taxes to the Federal Government.