Ways and Means Chairman Archer Advocates “Zero Tax on Saving”

"We need a different tax code," House Ways and Means Committee Chairman Bill Archer (R-TX) told ACCF supporters at a February 26 Capital Formation Forum. "I am determined to abolish the individual and corporate income tax and the 'death' tax. I want a zero tax rate on saving. If we cannot raise the level of private saving, then we will come up short in our ability to provide for the future."

Chairman Archer is a long-time advocate of tax reform to raise the level of saving and investment in the United States. He told ACCF supporters that private saving must increase so that workers have adequate tools and, ultimately, higher standards of living.

"We must make every effort to educate the public so that there is a greater understanding of the importance of capital formation in the economy," he said. "When people understand that they are the owners of corporations through their pension funds and other investments, then the idea of 'rich vs. poor' can be defeated."

The Texas congressman said he thought there would be an opportunity this year to make pro-capital formation tax changes, including ameliorating the alternative minimum tax (AMT), reducing capital gains taxes, expanding Individual Retirement Accounts (IRAs), and cutting estate taxes.

"I am encouraged by the statements of President Clinton and Secretary Bob Rubin," said Mr. Archer, who in late December visited with both the President and the Treasury secretary to discuss the prospects for pro-capital formation tax policy initiatives in 1997. "They have indicated they are not 'constitutionally opposed' to moving forward on some pro-saving and -investment issues. My concern is whether the price will be too high," he added.

Chairman Archer concluded by thanking the ACCF and its supporters for their efforts to promote tax initiatives to encourage saving and investment. "Your work over the years has been critically important in building the base of support we need to adopt pro-capital formation policies, including capital gains tax cuts, expanded IRAs, significant changes in the AMT and estate taxation, and a balanced federal budget," he said.
American Council for Capital Formation.

ACCF President Testifies Before Senate Finance Committee

“A soundly structured, broad-based cut in tax rates on capital gains would significantly benefit all Americans,” stated ACCF President Mark Bloomfield during testimony before the Senate Finance Committee on March 13.

Mr. Bloomfield, accompanied by ACCF Senior Vice President and Chief Economist Dr. Margo Thorning, joined other invited witnesses including the Honorable Paul A. Volcker, former chairman of the Federal Reserve Board of Governors; the Honorable Jack Kemp, co-director of Empower America and GOP vice presidential candidate; Professor Alan J. Auerbach of the University of California at Berkeley; and Dr. Allen Sinai, president and chief global economist, Primark Decision Economics. Committee Chairman William V. Roth (R-DE) held the hearing to examine the economic impact of capital gains tax relief.

A strong proponent of cutting capital gains taxes, Chairman Roth stated during the hearing, "Read my lips. The American people deserve a tax cut now."

The ACCF's testimony stated that a capital gains tax cut would have a positive impact on U.S. capital formation and productivity growth. The statement set forth three criteria that a good capital gains tax cut should meet: it should make economic sense; it should be fair; and it should be fiscally responsible.

A copy of the ACCF's testimony is included with this issue of Capital Formation.

Margo Thorning Addresses the City Club of Cleveland

Dr. Margo Thorning, ACCF Senior Vice President and Chief Economist, addressed the City Club of Cleveland on March 20 on the economic and environmental impact of the climate change policies which the United States is considering adopting.

"Research by top climate change scholars shows that reducing carbon dioxide emissions to 1990 levels would slow GDP growth, reduce U.S. wage growth by 5 to 10 percent, and worsen the distribution of income. Such reductions would not increase environmental quality because growth in emissions will be coming from countries such as China and India which are not bound by the agreement to reduce emissions," said Dr. Thorning.

Founded in 1912, the City Club is the oldest continuous free speech forum in the United States, and its distinguished speakers list includes many national and international leaders.