Speech of National Center President at National Tax Day
Rally, April 15, 1996
Remarks of Amy Moritz, President of The National Center for
Public Policy Research, addressing the national Tax Day Rally sponsored by
Americans for Tax Reform in Lafayette Park, Washington, D.C., on April 15, 1996:
I have a lot of respect for Americans for Tax Reform and the tax reduction
activists who have worked on the low-tax, no-deficit issue tirelessly for years
So many of us complain about taxes -- the high rates, the complexity of our
tax system -- but so few of us have done anything about it.
But thanks to Americans for Tax Reform and grassroots activists who won't
give up, the time of meaningful tax reform is coming. Success -- defined as no
deficits and lower tax rates, more fairly applied and more straightforwardly
executed -- is getting closer on the horizon.
Just a few short years ago, for instance, it was very difficult to even get
a vote scheduled on a Balanced Budget Amendment to the Constitution. Now
Balanced Budget advocates are the people who decide when votes will be held, and
we've gotten as close as one vote away from victory.
A few short years ago, the idea of a flat rate income tax, or any wholesale
replacement of our monstrously complex income tax system was nothing more than a
pipe dream. Now millions of Americans are extremely well educated on the merits
of a low, flat rate income tax, and the competing advantages of a national sales
tax instead of any income tax at all.
A few short years ago, anyone advocating getting rid of the IRS would be
considered a kook. Today policymakers at the highest levels of Congress are
studying if and how this might be possible.
A few short years ago, only a small number of tax reform advocates had even
heard of the concept of requiring the approval of a supermajority of Congress
before a tax increase could be adopted. Today a large constituency inside and
outside of Congress exists for the supermajority, and the most influential
Members of Congress are working hard for adoption of House Joint Resolution 159,
the first step toward making it happen.
So tax reform advocates -- and all taxpaying Americans who know this current
tax system can improve -- have come a long way.
But we still have a long way to go. Consider the situations we're still
- A President who misleads the American people about the
effect of his proposals on tax rates:
EXAMPLE: The White House claims to offer $117.4 billion in tax relief
under its FY 1997 budget. But at the same time, the President would raise taxes
by $56.6 billion, leaving a net cut of just $60.8 billion.
- A President who misleads the American people about
his budget polices:
EXAMPLE: The President boasts of his concern for enforcing
environmental regulations even though he has proposed reducing enforcement
personnel the equivalent of 400 full-time personnel. The President touts his
'cops on the beat' program, but fails to assure that funds for additional police
officers will go to those areas with the highest crime rates. The President
promises to 'end welfare as we know it' and provide a middle-class tax cut, but
doesn't even make an attempt to do either.
- Government bureaucracies fail to carry out their
EXAMPLE: A review of Department of Education programs conducted by the
House of Representative's Economic and Educational Opportunities Committee, the
Office of Management and Budget and the Congressional Research Service,
discovered that there are at least 760 federal education programs, administered
by 39 separate agencies, departments, commissions and boards, costing a total of
$120 billion. But just 6% of these programs are intended to teach or support
mathematics, science or reading. Among the programs the Department of Education
considered more important than education basics were a "Boat Sludge
Educational Grant Program," costing $7.05 million and a "Beautiful
Skylines Architectural Grant Program," which received $3.2 million.
- Special interests that lobby for irrationally high spending
EXAMPLE: A study by the Alexis de Tocqueville Institution has found
that if every item of the National Education Association's legislative agenda
were adopted, federal spending would rise by at least $702 billion annually --
equal to an annual tax hike for a family of four of $10,554.
- Inaccurate media reporting:
EXAMPLE: The media portrayed Congressional conservatives as unyielding
and uncompromising in the battle over the FY 1996 budget. But: Congress gave
$9.3 billion in more spending for every billion in cuts the White House agreed
to. Congress "out-compromised" the White House by a factor of 9.3 to
1! For example, the GOP added another $62 billion in Medicare expenditures to
its seven-year budget plan while President Clinton subtracted just $5 billion
from his plan. Congress has also moved closer to the President on Medicaid,
offering an additional $65 billion in spending for the program over seven years,
while the President edged closer to the GOP proposal by only $15 billion. On
some programs, GOP compromise has been met with no compromise whatsoever from
the White House. Congressional Republicans added $26 billion to welfare
spending and $12 billion to the Earned Income Credit only to receive nothing in
return from the White House. Worse yet, after Republicans sliced $177 billion
off of their tax cut proposal, the Clinton Administration moved further away
from the GOP position, cutting $64 billion off its tax cut plan.
- Special interests who support big spending even over the
best interests of their own constituency:
EXAMPLE: AFL-CIO President John Sweeney recently unleashed a $2
million media campaign against 55 House members who support the GOP budget plan.
The AFL-CIO's ad contends that these Republicans "cut" Medicare,
education and college loans "to give a huge tax break to big corporations
and the rich." And just who are these "rich"? Apparently,
union families. The GOP plan would provide a $500 per-child tax credit for
families making under $110,000 (or $75,000 for a single parent household).
According to the government's Current Population Survey, the average union
family had 1.83 children last year and would therefore qualify for $915 in tax
credits under the GOP plan. Furthermore, the GOP health care plan is vastly
better for union families than the status quo or the White House plan, as it not
only puts more dollars into the pockets of union families, it gives union
members more control over their health care plans than they currently enjoy.
- Tax policies that make no sense:
EXAMPLE: Studies show that the estate tax is a big money loser for
government: In 1994, estate and gift taxes accounted for a mere 1.2% of total
federal government receipts ($15.2 billion). Estimates conservatively show that
75% of estate and gift tax collections are offset by compliance and litigation
costs of the IRS and Treasury. Worse still, the estate tax kills family-owned
businesses -- 60% of these businesses fail to make it to the second generation
and 90% do not make it to the third generation, and estate taxes are partly to
We can succeed. Polls demonstrate that the American people agree with the
low-tax, low-spending agenda. A recent poll by Public Opinion Strategies, for
example, discovered that when Americans were informed that the Republican
Medicare plan would increase spending by 45% over the next seven years -- twice
the projected inflation rate -- 80% of those surveyed said they thought the
increase was too high!
What we must do is make certain the American people know the benefits of a
low-tax, no-deficit budget. For instance, using a widely accepted model of the
U.S. economy developed by Laurence H. Meyer and Associates, Heritage Foundation
economists found that under the seven year balanced budget plan passed by
Congress in 1995, the following would happen:
- Gross National Product would grow by an extra $10.8 billion in 2002.
- Americans' real disposable income would rise by an additional $32.1 billion
between 1995 and 2002.
- There would be an extra 104,000 housing starts between 1995 and 2002.
- Conventional mortgage rates would decrease by 0.4%, meaning the average
home owner would save some $10,000 over the life of a $100,000 30-year mortgage.
- There would be a 0.7% drop in the growth rate of the Consumer Price Index.
Another reason for optimism is this: According to a January 1996 ABC New
survey, America's teenagers support the lower-tax, reduced-spending position on
the budget over President Clinton's by a margin of 53% to 36%. 60% of teens
believe that it is more important to balance the budget than maintain the
current levels of government services.
The next generation is with us. The more Americans learn about the low-tax,
no deficit agenda, the more they like it. The future is bright. ###
The National Center for Public Policy Research
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Washington, D.C. 20002
Fax (202) 543-5975
E-Mail: [email protected]
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