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Wisconsin's Frequently Asked Questions
In any given week, many people from across our state contact me about issues that are of importance to them. Listed below are some topics on which I've received a lot of comment this week and my thoughts on each:
Arctic National Wildlife Refuge
Bill 602 P
Tax Cuts
Arctic National Wildlife Refuge
Our national wildlife refuges were created in 1903 and later expanded by the Roosevelt administration. Today, our national refuges are threatened because of several laws passed in the 1960s that allowed secondary activities on refuges, as long as these activities were "compatible" and did not harm the wildlife living on the refuge.
The General Accounting Office (GAO), the investigative arm of Congress, has reported that activities considered harmful by refuge managers are occurring on nearly 60 percent of all refuges. These activities include oil and gas drilling, timber harvesting, grazing, farming, commercial fishing, hunting and trapping. All these activities are found to harm wildlife, disturb habitats or breeding, and change normal animal behavior.
I continue to support efforts to protect the valuable natural resources of the Arctic National Wildlife Refuge. I oppose drilling in the ANWR because I believe that it may threaten its fragile ecosystem. I do not believe short-term economic considerations should take precedence over the health of the environment.
That's why I am an original co-sponsor of Senator Joe Lieberman's (D-CT) bill, S. 411, to designate a portion of the undeveloped Arctic National Wildlife Refuge as a "wilderness site," placing an indefinite ban on development.
As Congress considers this and other environmental legislation, I will continue to support efforts to preserve and protect our pristine wildlife habitats including the Arctic National Wildlife Refuge.
Bill 602 P
Many people have expressed concerns about "Bill 602P," rumored legislation that would place a tax on electronic mail transactions. "Bill 602P" does not exist, and no legislation has been proposed in the House of Representatives or the Senate which would levy a tax on e-mail to benefit the U.S. Postal Service. While the Internet and electronic communication have become valuable educational and business resources, we in Congress have grown increasingly concerned about the dangerous ways that the Internet can be used. Because electronic communications are instantaneous and reach so many people, inaccurate information -- such rumors about a so-called "Bill 602P" -- can spread quickly.
Tax Cuts
H.R. 1836, the "Economic Growth and Tax Relief Reconciliation Act of 2001," is an omnibus package of significant tax reductions. The bill includes $1.35 trillion in overall tax cuts over the next 11 years. One of the most significant provisions of benefit to all taxpayers is the creation of a new 10 percent income tax rate. Taxpayers will pay 10 percent on their first $6,000 in income, resulting in an annual tax cut of $300 or $600 per taxpayer or married couple, respectively. In 2009, these amounts increase to $7,000 and $14,000, increasing the tax cut to $350/$700. For FY 2001 only, the tax cut will be distributed through checks sent out over the summer. The bill also reduces individual income tax rates. Present-law regular income tax rates of 28 percent, 31 percent, 36 percent, and 39.6 percent are phased-down over six years to 25 percent, 28 percent, 33 percent, and 35 percent, effective after June 30, 2001.
The bill includes significant marriage penalty tax relief. It increases the basic standard deduction for a married couple filing a joint return to twice the basic standard deduction for an unmarried individual filing a single return. The tax bill also increases the size of the 15 percent bracket for married couples and increases the point at which the Earned Income Tax Credit is phased out by $3,000.
The bill phases out the estate tax, though total repeal will be in effect for only a short period of time unless the bill is reconsidered and passed again in 2011. The unified credit is phased up to $3.5 billion ($7 million for couples) by 2009, the top rates are reduced to 45 percent and the state credit is phased out over four years -- 25 percent each year. In 2010, the estate tax is repealed briefly, but the gift tax is retained in order to minimize tax avoidance.
In addition to these major tax provisions, the bill increases the child credit $1,000 by 2010 and makes it refundable to families with earnings above $10,000. The credit will be phased in at 10 percent for 2001-2004 and 15 percent from 2005 and after.
H.R.1836 includes education provisions that expand the
employer-provided tuition exclusion to graduate programs, expand the deductibility of student loan interest, and make prepaid tuition programs and college savings programs tax-free. The bill allows increased contributions to education savings accounts. It also includes a deduction for college tuition, limited to a maximum of $4,000.
Lastly, I'm glad to inform you that the bill contains a provision on which I have worked for several years, the Child Care Infrastructure Tax Credit. This provision gives a tax incentive to employers who choose to invest in child care for the dependents of their employees.
I voted in favor of the final compromise version of the tax cut bill, which passed the House by a vote of 240-154 and the Senate by a vote of 58-33. It was signed into law by the President on June 7, 2001.
It is clear that a balanced tax cut is justified given the massive budget surplus we are experiencing. However, these surpluses present both great opportunity and great risk. There is the opportunity to invest in unmet national needs -- education, health care, retirement security, agriculture, child care. And there is opportunity to return some tax dollars to the hard working families whose productivity has driven our solid economic performance.
With these opportunities, however, we run the risk of putting too much faith in multi-year projections of ever-growing surpluses. We risk locking in revenue losses and deficits with which future Congresses and generations will have to grapple. For this reason, I cosponsored an amendment to put in place a "trigger" that would delay scheduled tax cuts if the trust fund surpluses were violated. I also supported several attempts to bring the total tax cut number down and reserve some of those funds for spending priorities or debt reduction.
Unfortunately, none of these amendments were accepted.
On the other hand, a provision sunsetting the entire bill after 10 years was put in place at the insistence of moderates from the Democratic and Republican party. This will guarantee that future Congresses will have to re-examine the changes we make today in the light of future economic circumstances.
In addition, because of the work of these same moderates, the final bill included many of the popular tax cuts on which Congress was expected to act this year: marriage penalty relief, estate tax relief, pension and education incentives. The inclusion of these items is not only good policy, it forestalls the consideration by Congress of even more tax cuts later in the year, which could drive the tax cut price tag well above $1.35 trillion.
And finally, we were able to insist that the provisions giving significant relief to low-income working families with children were retained and expanded. These breaks will make a significant difference to those families with little income tax liability but significant payroll tax payments.
I voted for this bill because I am a Democrat who supports tax cuts. I am a moderate at a time when political power is wobbling from right to left. Though this bill is imperfect, and there are several provisions that I would -- and did try to -- change, I believe it represents a compromise that affords many benefits to American workers and their families. We have ensured that future Congresses will have to re-examine, and reaffirm, the wisdom of these tax cuts. And with that safeguard, I feel this bill is the best we can do for the economy and our workers right now.
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