Washington, D.C. - U.S. Senator Mike Enzi, R-Wyo., helped his colleagues in the Senate usher through the chamber a tax relief package worth $1.35 trillion over 11 years.
Democrats delayed passage of the tax relief measure by offering a series of amendments over the last few days. The barrage of amendments ceased today and the Senate passed the tax relief bill in a bipartisan fashion by a vote of 62-38.
Enzi said the tax relief plan would spell the end of the death tax as we know it. He pointed out that it would benefit over 38,000 Wyoming small business owners so they in turn can further enrich the state's economy and their communities. Enzi said the tax bill would encourage investment, strengthen families and reward savings.
The following are remarks made for the Senate record.
The measure will next go to a joint Senate/House conference committee. The Senate and House will vote on the conference agreement which will then be sent to the President to be signed into law.
STATEMENT OF SENATOR MICHAEL B. ENZI
IN SUPPORT OF S. 896,
THE "RESTORING EARNINGS TO LIFT INDIVIDUALS
AND EMPOWER FAMILIES ACT OF 2001"
IN SUPPORT OF S. 896,
THE "RESTORING EARNINGS TO LIFT INDIVIDUALS
AND EMPOWER FAMILIES ACT OF 2001"
Mr. President, I rise in support of S. 896, the "Restoring Earnings to Lift Individuals and Empower Families" or "RELIEF" Act of 2001. It is time we ease the tax burden on all American taxpayers and return part of the surplus to the people who created it.
The legislation before us will benefit American taxpayers and improve our nation's economy. The provisions of the RELIEF Act of 2001 include across-the-board rate reductions
for all Americans, repeal of the death tax, reduction of the marriage penalty, doubling of the child credit, and increased incentives for retirement savings and education. This legislation incorporates some good principles of tax policy, such as encouraging investment, strengthening families, and rewarding savings. It takes an important step in the right direction toward a tax policy more worthy of a great nation.
Mr. President, the RELIEF Act of 2001 will encourage economic growth and productivity by strengthening America's small businesses. Small businesses are the backbone of the American economy. They represent over 99% of all employers in America and employ half of America's private workforce.
Small business creates 80% of all new jobs in America and accounts for about 38% of the Gross Domestic Product and half of the Gross Business Product. Because of their ability to adapt quickly to changing market conditions, small businesses are nearly the sole source of job growth during times of economic recession. In short, if we want to provide a stimulus to the present economy, we should do all we can as soon as we can to help America's small businesses.
The legislation before us will greatly help small businesses. First, it kills the death tax. It should come as no surprise to anyone that the death tax is one of the most destructive taxes to small businesses. In one foul swoop, this tax can demolish the work of several generations of entrepreneurs.
The death tax rewards savings and investment with crippling tax rates that all too often force families to sell off their businesses just to pay their bill to the IRS. The death tax is a punitive tax on families by penalizing them for trying to pass on their life's labor to their children I am pleased that this legislation axes the death tax and sends it to its grave where it belongs.
Secondly, the RELIEF Act of 2001 will help stimulate the economy by empowering small businesses in their effort to provide more jobs, invest in their physical facilities, and develop new products that will benefit American consumers and our nation as a whole. It is important for everyone to understand that most small businesses owners file their taxes as individuals. Most do not file as traditional C-corporations, but rather organize as sole proprietorships, partnerships, S-corporations or some other structure that allows them to file their taxes using the tax rates for individuals. Each and every one of these "flow through" businesses that has positive income will benefit from the tax relief before us.
Mr. President, I would like to give my colleagues and the American people an idea of the number of small-business owners who would benefit under the rate reductions in the legislation before us.
There are nearly 17 ½ million individuals who had income from sole proprietorships in 1999, the last year for which we have complete data. Each one of these 17 ½ million people will receive tax relief under this legislation. These might be retailers, dentists, general contractors, accountants, or people employed in any other number of occupations that provide the goods and services that we use every day.
I should mention that these numbers only include taxpayers who had income from non-farm sole proprietorships and does not include business owners who may organize using other business entities, such as partnerships or S-Corporations. If we added in the people who file the schedule F for farm income and those who file schedule E for partnership income, the total would probably be in the neighborhood of 24 million. Since we don't have that data broken down by states, we'll consider those small business owners who file as sole proprietorships. Keep in mind that the 17 ½ million is really the floor rather than the ceiling of small business owners who will benefit from the rate reductions in this bill.
To give people an idea of how this tax bill will benefit their constituents, I would like to share some of the numbers from individual states. In my home State of Wyoming, there were 38,000 people with small business income in 1999. By passing this tax relief, each and every one of these business owners would have more money to put into their businesses and benefit the economy as a whole.
Here's how this often works in the real world. Many of these businesses have a profit on paper which effectively puts these business owners into the highest tax bracket for any given year. If they didn't have to pay 40% of their income to the federal government, they would use this invest this money into their business by buying more inventory, building, remodeling, or re-tooling their physical facilities.
Many of these businesses would use this money for testing, research and development of new products and technology which would in time greatly benefit the economy as a whole. In my home State of Wyoming, each of our 38,000 business owners are making a great contribution to our local communities and it is time we let them keep a little more of their own money so they can grow their businesses rather than grow the pork in the federal budget.
If you look at the other states, you will find that they also have significant number of small business owners who will benefit under the tax relief before us.
Montana has 76,000 business owners who would benefit from this tax relief. Like Wyoming, many of these are main-street businesses which form the backbone of our the economy in our small towns and help perpetuate the western way of life.
Colorado has 329,000 business owners who would benefit from this tax relief. Nebraska has 117,000 small business owners who would see their incomes rise from this tax relief. When you include the number of small business owners who operate farms, I expect this number would be considerable higher.
Similarly, 486,000 small business owners in Georgia would find more money in their pockets if we pass the RELIEF Act of 2001.
Mr. President, I have heard the criticism form some on the other side of the aisle that this tax cut is too tilted toward the rich. Some have said that the president's proposal would give millionaires the money to buy a new Lexus while it would only allow middle income people money to buy a new muffler. I really don't know what world they are living in, but I find it interesting that most of the people who are making these claims don't have any experience in owning or operating a small business.
I have heard a number of my colleagues on the other side of the aisle express great concern about the number of mega-mergers between multi-national corporations over the past several years. They have argued that these businesses continue to swallow up their smaller competitors in many of our communities and all too often have the effect of eliminating any real local competition. As a former small business owner, I am very sympathetic to these concerns.
My experience has taught me that the small, locally-owned family businesses are much more likely to be active in their community. These are the businesses that constantly donate their goods and services to local charities, schools, and civic organizations in an effort to make their towns better places to live. Small business-owners live in the same communities where they sell their products or offer their services and this is generally not true of the large, multi-national corporations. Since most small businesses pay taxes under the individual rates, this legislation takes an important step in leveling the playing field with their large competitors.
In short, if members of the United States Senate want to take one action this year that can greatly aid in the survival of America's more than 17 ½ million small businesses, they should vote for this Tax Relief legislation. Members will not have a better opportunity this year to register their support for America's main street business-owners than the RELIEF Act of 2001.
Mr. President, it is important to understand that we need to lower all the marginal rates to benefit our small businesses. According to Treasury data, nearly two-thirds of the taxpayers who would benefit from lowering the top income tax rate are small-business owners and entrepreneurs. Contrary to the stereotypes too often painted by the far left, most of the taxpayers in the top income tax bracket are not the idle rich.
Now I have a little experience in owning and operating a small business. I owned operated a main street shoe store in Gillette, Wyoming for 26 years with my wife and our three children. Let me tell you, when I got a tax cut, I did not go out and buy a Lexus. I would take that money and make improvements to my store so that my business would be more successful in the future and I would be better able to provide the services and products that would benefit my family and my community.
Mr. President, I wonder how these 17 ½ million small-owners would feel if we told them "you can't have a tax cut, because we don't trust you to spend your own money. You might just waste that tax cut on a luxury car. You better let us keep that money in Washington so we can continue to increase the size and scope of the federal government and have a little more control over every aspect of your lives." I don't know who my colleagues are talking with, but I trust the more than 38,000 small-business owners in my State to use their own money as they see fit.
Mr. President, America's taxpayers are long overdue for a return of their surplus. Americans are shouldering the highest peacetime tax burden in our nation's history. Both the level of taxation and our underlying tax policy are unjust and in desperate need of reform. For too long, we have punished marriage and savings, discouraged innovation and job growth, and punished the same small businesses owners that deserve much of the credit for our economic success over the past decade.
It is time we listen to the more than 17 ½ million small business owners spread throughout our states, and our communities. It is they who will benefit from the RELIEF Act of 2001, and they in turn will help us by providing many of the goods and services that we will use every day.
The RELIEF Act of 2001, will benefit every American taxpayer by allowing them to keep some of their own money. It will stimulate the American economy by rewarding entrepreneurship and job creation. It respects marriage and the family. It encourages savings and investment. It gives Americans greater freedom over their incomes and their futures. I applaud Chairman Grassley and Senator Baucus for their hard work in writing this legislation and bringing it before the Senate today. We should enact this legislation with all deliberate speed. I urge my colleagues to join me in supporting the RELIEF Act of 2001.
I thank the chair and yield the floor.