VICE PRESIDENTIAL DEBATEOctober 9, 1996
JIM LEHRER: Mr. Kemp, you said recently that one of the problems related to this that - was that all the capital was in the hands of the white people. What did you mean by that?
MR. KEMP: The single greatest problem in our opinion, domestic - in the domestic economy, is that this tax code, 83 years old, a relic of the Cold War and hot war, inflation and depression, 7 1/2 million words long, over-taxes capital, over-taxes working men and women and families. Clearly, the Gordian Knot needs to be broken in one fell swoop. Bob Dole and Jack Kemp, as soon as we get through this first step of cutting tax rates across the board, are going to repeal the whole code. While Bill Clinton and my friend, Al Gore, defend the status quo, we're going repeal the 7 1/2 million words of the U.S. Tax Code and make it once and for all, tax income once, not twice, three, four, and, if you die, it confiscates your estate. That's unacceptable.
We must have a tax code going into the 21st century that does not protect the establishment. And this tax code does. And by cutting and eliminating the capital gains, by cutting and eliminating the estate tax, by bringing the top tax rate down to something reasonable like - here he goes again - I think in peace time it shouldn't be hire, Bob, and I don't think it should be higher than 25 percent, be phased in. The capital would flow out into the economy. We would have people getting access to capital, small businessmen and women, African-American, Asian-Americans, Latino-Americans, female Americans would be able to start their businesses.
Dana Crist of Lancaster said the day the tax bill is passed in the Congress, she will open a new factory with 40 or 50 or 60 employees in Lancaster, Pennsylvania.
JIM LEHRER: Thank you.
MR. KEMP: He'll call that trickle down. I call it Niagara Falls.
VICE PRESIDENT GORE: The problem with this version of Niagara Falls is that Senator Dole and Mr. Kemp would put the American economy in a barrel and send it over the falls.
It is a risky $550-billion tax scheme that actually raises taxes on nine million of the hardest-working families. Again, Mr. Kemp opposed that and called it unconscionable. Now it is part of the plan that he is supporting. Not only that, though, it would blow a hole in the deficit. It would raise interest rates. That means higher mortgage payments, particularly those with variable rate mortgages; higher car payments. It would also lead to much deeper cuts in Medicare, Medicaid, education and the environment. It is extremely risky.
And as for these harsh words - I don't take them personally. He said much worse about Bob Dole when he said Bob Dole never met a tax that he didn't hike. He wrote about 450 separate provisions in that code. You better check with him before you eliminate it completely. He may be getting royalties.
MR. KEMP: Jim, a $550 billion tax cut - this is something Al does not want to mention -- has to be viewed against the context of a $50 trillion U.S. economy output of goods and services over the next six years. A $550 billion tax cut in a $50 trillion economy over six years is 1-1/2 percent, and the only hole it would blow is a hole in the plans of this administration to try to tinker with the tax code and defend the indefensible. It would blow up the bureaucracy, but it would expand the economy. That's important for America.
JIM LEHRER: Mr. Vice President, what about Mr. Kemp's point that he's made a couple of times that what we need is to throw away the current - the present tax code and write a whole new tax system? Do you agree with that?
VICE PRESIDENT GORE: We've passed the Taxpayer Bill of Rights. We have fought for new provisions that now make it possible to file over the telephone. We are fighting for tax reforms across the board. And, most importantly, we have a plan on the table right now to cut taxes on middle-income families with several specific provisions. We already cut taxes on 15 million working families in this country with an average of about $1,000 in tax relief to those making $25,000 a year or less. And for the last two years we have had middle-income tax cuts on the table in the Congress, and they would not - they weren't accepted by Bob Dole and Newt Gingrich because they said they would not pass them without cutting deeply into Medicare, Medicaid, education and the environment.
We are determined to move forward, during these next four years, with the tax cuts that President Bill Clinton has proposed. Here they are again: a $1500 tax credit for tuition; a $10,000 tax deduction so that no family pays taxes on the money for college tuition; capital gains eliminated for the sale of a home; a tax break for first-time homebuyers and for health care expenses; and a $500 child tax credit.
MR. KEMP: You only get a tax credit in the Clinton administration if you do exactly what Al Gore and Bill Clinton want you to do. That's not America.
When John F. Kennedy cut tax rates, the economy grew, unemployment went down, and we balanced the budget, and revenues went up. Indeed, the secretary of the treasury under John F. Kennedy and the deputy secretary of treasury under John F. Kennedy endorsed Bob Dole's plan to cut rates, cut the capital gain tax, balance the budget, provide a $500 tax credit, and clearly, if plans should be to lift the economy, to get more revenue, Medicare will be saved because it'll be put into a commission where both Bill Clinton and Bob Dole recognize it has to be studied by the same people that would study - or did study, I should say, the Social Security system and saved it in 1983 and '84.
Look, we can bring down government - the growth of government spending, but we have to grow the economy. And in Bob Dole and Jack Kemp's opinion, we should aim at doubling the size of the American economy in the next 15 years. Under their policies it'll take 30 to 40 years. That's not acceptable.
VICE PRESIDENT GORE: The chairman of their national campaign steering committee, Senator D'Amato, said that Bob Dole would have to cut into Medicare in order to pay for this proposal, but that he would wait until after the election to do it.
The proposal to cut Medicare that Senator Dole pushed before and shut down the government to try to enact would have already raised by $268 the fees paid by the average couple now on Medicare. He tried to double the deductibles and give people less in return. We have a balanced budget plan that protects Medicare -
JIM LEHRER: Vice President -
VICE PRESIDENT GORE: - and gives tax cuts.