Opening Statement of the Hon. Jim Ramstad, M.C., Minnesota

Hearing on President's Tax Relief Proposals

February 13, 2001

Mr. Chairman, thank you for holding this important hearing today to examine President Bush's proposals for tax relief.

What a difference a year makes. At this time last year, we were debating whether we should have a tax cut. The question now is not whether, but how much and how quickly!

The time for tax relief is now. The dire state of the economy is no longer in doubt. A major tax cut is needed to stimulate the economy and keep people working.

The plan before us is fiscally responsible. CBO estimates project a surplus of at least $5.6 trillion over the next 10 years. With this surplus, it is unconscionable that Americans are paying the highest peacetime level of taxes in history. It is entirely reasonable to strengthen the economy by returning to taxpayers one fourth of their tax overpayments, and to use the remainder to pay off the debt, shore up Medicare and Social Security, and improve education.

Cutting taxes in this modest way will not threaten our fiscal discipline. On the contrary, it is a well-documented paradox that tax revenues actually increase after taxes are cut, as more jobs and rising incomes send money to the Treasury.

President Bush's tax cut initiative is also fair. Lower and middle income Americans will see the most dramatic percentage drop in their taxes under the plan. And although all Americans who pay taxes will receive a tax cut under the President's plan, wealthier taxpayers will actually pay a larger portion of America's tax burden than they do today.

On a "micro" level, this tax relief will raise the standard of living for individual families. It will allow working Americans to save and spend more of their own money for their family's needs. For a typical family of four, this means an extra $1,600. And from a "macro" perspective, this broad tax relief will create jobs and spur economic growth. Our families and our national economy need this relief.

Mr. Chairman, thanks again for convening this hearing. I look forward to hearing from Secretary O'Neill and our distinguished panel of economists. Working together, we can provide tax relief that will strengthen families and the economy.