August 4, 1976
Page 25594
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. HUMPHREY. I think it is about $235 million.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. HUMPHREY. I yield to the Senator from Maine.
Mr. MUSKIE. First, I make the point that over the next 5 years, this proposal would be the most costly new tax provision in the bill now before the Senate. Over that period, it would reduce revenue collections by more than $3.2 billion. The Joint Committee on Internal Revenue Taxation provided estimates of revenue loss in fiscal 1977 of $385 million. No, the estimate that the committee was working on was $235 million.
Mr. HUMPHREY. $235 million for 1977.
Mr. MUSKIE. I think that is a conservative figure, and I have reason to believe that it is closer to $385 million.
What that does to the current tax bill, if the higher figure is correct, is to reduce the net gain on tax expenditures to $142 million, as compared with $1 million plus that came out of committee.
So that we are almost $2 billion away at this point if this provision is approved by the Senate. If this provision is approved by the Senate, we will be almost $2 billion away from our budget resolution target.
Mr. HUMPHREY. The Senator from Maine has given us important information. I add that the proposal in the committee bill makes the 1 percent retroactive to 1975.
Mr. MUSKIE. Precisely.
Mr. HUMPHREY. And that is another loss of revenue. I believe it is about $150 million added on. There is no reason to make it retroactive; that is for sure.
Mr. President, it seems to me that what we need here is to keep in mind that there will be certain advantages to certain companies and certain employees. That is desirable in many ways. But one company, a very fine company — and I make no case against it because it serves the public well — A. T. & T., would benefit by 1977 to the tune of $340 million. That is one company. That is by their own estimate, not by any estimate of any Member who is seeking to support the Javits proposal.
Mr. President, on this, there are arguments to be made in behalf of the broadening of capital formation. I believe there is a great need for expanding capital formation. I know that in order to increase our productivity, our jobs, we are going to have to have more capital. I believe that the broadening of the ownership of capital is a highly desirable goal. I shall vote to continue a 1 percent proposal for an additional 2 years, until we can further examine other alternatives.
I do not ask that we toss overboard the progress that has been made thus far. I just suggest to the Senate that the time is at hand at least to put up the caution sign — not to put up the stop sign, but to have some caution.
Mr. PERCY. Mr. President, will the Senator yield?
Mr. HUMPHREY. I yield to the Senator from Illinois.