Hearing of the House Ways and Means Committee, Subject: Fair and Equitable Tax Policy for America's Working Families

Statement

HEARING OF THE HOUSE WAYS AND MEANS COMMITTEE
SUBJECT: FAIR AND EQUITABLE TAX POLICY FOR AMERICA'S WORKING FAMILIES

REP. XAVIER BECERRA (D-CA): Thank you, Mr. Chairman. And I thank the panel for their testimony. I appreciate it very, very much as we try to formulate some sound policy to address some of the concerns that taxpayers have expressed to us over the years. Let me try to touch on one point for one second. My understanding is that we have a civilian workforce, meaning, not counting the military, of something approaching a 150 million Americans who are employed.

And today, we have an unemployment rate hovering somewhere around 4 percent, five percent. There are some 7 million -- close to 7 million or so Americans who are unemployed. I make this comment only because my friend and colleague, Mr. Hulshof, made the point that full employment has often been described as being five percent, only five percent of Americans unemployed. And I think we have to dispense and dispose of that type of thinking that we can call full employment, 7 million Americans, more than 7 million Americans in this economy without work. And I think that's one of the difficulties that I think economists run into and policymakers.

When we talk about full employment, meaning, when we've got 95 percent of Americans employed for, in this case over 7 million Americans, that means they are out of luck. And we would totally discard them in our consideration of our policies if we were in -- under an economy with full employment.

I think that's one of the reasons we have these difficulties today with regard to tax policy. When we hear people talk about tax cuts being the savior for the economy and for the American worker, I think all three of our witnesses -- our expert witnesses have said that tax cuts by themselves do not pay for their cost.

And if that is the case, then the Bush tax cuts don't and won't pay for themselves either. And now that we find that it's really as a result of the Bush tax cuts that this Alternative Minimum Tax problem will begin to hit more and more Americans that never thought they would be lumped in with Exxon Mobil and all these other very lucrative companies and very, very wealthy Americans. It's because we have policies that seems so out of touch here in Washington compared to what's going on in average America. And I think we do have to come up with a more rational approach.

To me, the AMT is a symptom of our very chaotic tax code that tries to address general problems, but when you actually come down to it, the special interests get a better grip on the policy than do the -- do average Americans. And what we end up with is not what we thought we would start -- we would conclude with, quite honestly.

My question to the three of you, whoever would like to answer this, is the following. If we do AMT relief, to whom should we target it?

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