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Arkansas. In addition, he has eliminated the State marriage tax penalties, something that we haven't done here in Congress. Governor Huckabee is now working to eliminate the State capital gains tax, something else that Congress should do. Governor Christine Todd Whitman, who is our first guest today, of New Jersey has cut every type of tax imaginable, including some taxes many people probably didn't even know they were paying, such as a tax on yellow pages advertising–I didn't know about that. Virginia Governor Jim Gilmore ran for election on and got the State legislature to pass an elimination of the car tax. He also proposed and passed tax exemptions for military personnel in order to give them a much needed financial break. And Governor Pataki of New York has also enacted tax cuts 36 times, saving the taxpayers of New York $19 billion. These Governors certainly deserve our attention.
First, this morning, we are going to hear from Governor Whitman of New Jersey, a very intelligent, articulate, and attractive young lady. According to Governor Whitman, “We are not giving anything back to the people; we are just taking less of what is already theirs." She was elected in 1993 on her commitment to make New Jersey government more responsible with taxpayers' dollars. She promised tax cuts and a more efficient government, and she has delivered. On her watch, New Jersey has added 300,000 new jobs; crime is at the lowest level it has been since 1974, and she has enacted at least 17 tax cuts.
The centerpiece of her tax reform plan has been the 30 percent cut of State income taxes. In three installments, she cut 30 percent for most New Jerseyans. In addition, she has taken care of the lowest income bracket by eliminating State income taxes
altogether for 380,000 people in her State earning $7,500 or less. These are just a few of her many successes, but, most recently, Governor Whitman proposed a $1 billion school tax rebate to help further ease the tax burden of New Jersey citizens. This legislation is currently making its way through the New Jersey Legislature.
I will talk about Governor Huckabee and the other Governors, subsequently, when they appear before our committee, but, right now, before I introduce our guest, Mr. Waxman, do you have any comments?
Mr. WAXMAN. Yes, thank you very much, Mr. Chairman. I guess no one should be at all surprised that today's hearing is on taxes. It seems that every year, Republicans use the days around April 15th as a time to score political points. The chairman said that the Federal taxes are consuming the highest percentage of national income than at any time since World War II. This is not true. According to a recent analysis by the Treasury Department which looked at average income tax rates for a family of four, the average tax rate for a family earning the median income is at its lowest rates since 1965. For a family earning twice the median income, the rate is the lowest it has been in 25 years. The average income tax rate for a family earning one-half the median income is lower than any year covered by the report which goes back to 1955, and I have a chart over here which illustrates this point.
Another myth is that States deserve all the credit for tax cuts we are going to hear about today, but the reality is that it is the strong economic growth under President Clinton, the longest peacetime expansion in history, that has made the so-called Republican tax cuts possible. Let me review some economic statistics under the Clinton administration. The U.S. economy has created 18 million new jobs in the last 6 years, over 90 percent in the private sector, which has generated billions of dollars in additional tax revenues. Today's unemployment rate of 4.2 percent is down from 7.5 percent in 1992 and has been below 5 percent for 21 consecutive months, the lowest sustained peacetime unemployment rate in 41 years.
Since 1993, real wages have risen 6.1 percent compared to a decline of 4.3 percent during the previous two administrations. Real hour wages are up 2.5 percent in the past year alone after falling 5 percent from 1981 through 1992. The median family income, adjusted for inflation, is up $3,517 since 1993 after falling $1,835 between 1988 and 1992.
And sometimes what we don't hear is as important as what we do hear. I don't think any of my Republican colleagues will complain today about what is called the Misery Index. The Misery Index, many of you may recall, was the quotient used by Ronald Reagan in 1980 that asked the question, "Are you better off today than 4 years ago?” The resounding answer today from coast to coast is yes. Since the Clinton-Gore administration came to office in 1993, we are better off. In New York, in California, in New Jersey, in Virginia, in Indiana, and nearly every other State, we are better off today than we were 6 years ago. It would appear that this strong economic growth, more than any other factor, has made these State tax cuts possible. More people working and making higher wages translates into higher tax revenues and lower expenditures on welfare and unemployment. Given these strong economic statistics, it is no wonder that the States now have money to pay for tax cuts.
One illustration is what has taken place in New Jersey. In her written testimony submitted to the committee, Governor Whitman says that she was able to cut New Jersey's personal income tax by 30 percent while retaining the same level of tax revenue, but what makes this possible is more people working and paying taxes on higher incomes all of which has taken place under a Democratic administration.
Yet another myth is that it is just Republican Governors who have cut taxes. This is also not true. Democratic Governors, none of whom, as far as I can tell, were invited today, as well as Republican Governors, have been able to take advantage of the strong economy of the last 6 years to cut taxes. For example, Indiana Governor O'Bannon cut taxes by $600 million in his first year in office. He has proposed another $1 billion in tax cuts in 1999. Governor Carper of Delaware has cut taxes for 5 consecutive years. Governor Locke of Washington and Governor Patton of Kentucky have signed tax cuts in recent years. In Missouri, Governor Carnahan has an increase in personal income tax exemptions as well as a reduction for health insurance costs for self-employed individuals. In fact, this year alone, 10 of the country's 19 Democratic Governors have proposed tax cuts for their States. But we are not going to hear from any of these Democratic Governors. We are also not going to hear testimony from anyone about the negative consequences of some of the Republican tax cuts. There is no mention that some States with Republican Governors would be forced to cut funds for education programs and health care to pay for tax cuts. There is also no mention of increases of State debt or increases in local taxes that are necessary to make up for cuts in State funding for services.
So, I can't help but be a little skeptical about the motives behind this hearing. First, we have a hearing to showcase Republican Governors' tax cuts; then, tomorrow, the day taxes are due, Mr. McIntosh is holding a subcommittee hearing entitled—this is the title for the hearing—"Clinton-Gore Versus the American Taxpayer.” It would appear that these hearings are little more than a taxpayer-funded commercial for the Republican party. I find it ironic that the majority which says it is holding this hearing to find out how to save taxpayers' money would actually waste the taxpayers' money to hold what amounts to an RNC political event. With income taxes
due tomorrow, I wonder what the taxpayers will think about that. Thank you, Mr. Chairman, for the opportunity to make this opening statement; I yield back the balance of my time.
Mr. BURTON. Thank you, Mr. Waxman, and, as you know, we always extend to the minority the right to invite someone, and this was no exception; the minority chose not to invite any Governors.
Do any other Members have any opening statements?
THANK YOU MR. CHAIRMAN....
AS WE ALL KNOW, TODAY IS TAX DAY. TODAY,
MILLIONS OF WORKING FAMILIES WILL ONCE AGAIN
REALIZE THE SAD REALITY THAT THEY SPEND MORE ON
FEDERAL TAXES THAN ON FOOD, SHELTER, CHILD CARE,
AND OTHER IMPORTANT NECESSITIES....
MOREOVER, CONGRESS WITH YESTERDAY'S
PASSAGE OF THE FISCAL YEAR 2000 BUDGET
RESOLUTION, IS WELL ON ITS WAY TO DECIDING ON THE
IMPORTANT ISSUES OF TAX CUTS AND GOVERNMENT
ACCORDINGLY, I KNOW OF NO BETTER WAY TO
UNDERSCORE THE NEED TO TAKE A SERIOUS LOOK AT
HOW BEST TO PROVIDE NECESSARY TAX CUTS AND
IMPORTANT GOVERNMENT SERVICES, WHILE
SHRINKING OUR BURDENSOME RED TAPE AND
BUREAUCRACY, THAN BY HIGHLIGHTING THE
ACHIEVEMENTS OF THE GOVERNOR OF NEW YORK,
GOVERNOR PATAKI HAS SHOWN THAT A STRONG
COMMITMENT TO FISCAL RESPONSIBILITY AND A
BELIEF THAT GOVERNMENT CAN ASSIST THOSE IN THE
PURSUIT OF A BETTER LIFE CAN INDEED GO HAND IN