


			   THE WHITE HOUSE

		    Office of the Press Secretary
______________________________________________________________
For Immediate Release                             April 12, 1994     


			    PRESS BRIEFING
				  BY
		 SECRETARY OF TREASURY LLOYD BENTSEN
	     
	     
			  The Briefing Room
	     
		  

2:18 P.M. EDT
	     
	     
	     SECRETARY BENTSEN:  I think they're all working on their 
tax returns -- that's probably where they are.  (Laughter.)
	     
	     I want to talk taxes for just a few minutes.  But to 
show you that we're user friendly, consumer friendly, over at 
Treasury, I brought along a bunch of Form 4868s for those of you who 
want to delay your tax return -- (laughter) -- and you want a 
temporary extension.  So I'll have them up here for you.
	     
	     Q    Too late.  (Laughter.)
	     
	     SECRETARY BENTSEN:  Too late.  Listen, I'm working, 
filling mine out right now.
	     
	     If you recall, last summer when the President's deficit 
reduction plan was being passed through the Congress, you heard the 
claims that the Democrats were going to raise taxes on middle income 
folks, raise their income taxes.  Not so.  We said at the outset that 
we would produce a balanced and fair package with more in spending 
cuts than we had in taxes.  And by the way, the deficit is coming 
down faster than we had projected; we're ahead of schedule on that 
one.
	     
	     The package we produced had $255 billion in cuts and had 
just under $250 billion in higher revenues.  We cut entitlements.  We 
asked 12 percent of our Social Security recipients, the most well-
off, to pay more, but not until 1994.  We raised the corporate income 
tax slightly and we put in some help for small business, like higher 
investment expensing and capital gains exclusions.  And we had a 
small gasoline tax. 
	     
	     The last time I filled out -- I noticed that the cost of 
my gasoline was even less than it was before the tax was put on it.  
And when it came to the individual income tax rate -- look at the 
chart -- we only changed the very top rate.  Here it is -- on those 
that are making an adjusted gross income of an excess of $180,000, 
that rate was raised from 31 to 36; those with an adjusted gross 
income of over $300,000, that was raised from 31 to 39.6.
	     
	     Or you're talking about 1.2 percent of filers -- 98.8 of 
those had no increase in income tax rate.  And of all the G-7 
countries -- I went back to check that one -- there was only one 
country that had a lower rate than the 39.6.  Only one out of the 
seven.
	     
	     I saw a story a few weeks ago in the Wall Street 
Journal, and I've heard talk along these lines, that as many as 40 
percent of Americans believe their income taxes have gone up.  For 
most Americans, if they're paying higher taxes this year, it's 
because they're well-off, or they received a big raise, or they 
received a bonus.
	     
	     Look at the second chart.  We raised the rate on the 
wealthiest 1.2 percent of Americans.  Those are the families, again, 
who had an adjusted gross income of more than $180,000.  That's not 
bad -- not bad money.  So as Americans fill out their 1993 taxes --
98.8 percent of all taxpayers, again, have no increase in the income 
tax rates this year.
	     
	     And when we passed the deficit reduction package, we 
also expanded the earned income tax rate.  And we did that to improve 
the benefits beginning, phasing it in this year.  In 1994, about 15.2 
percent of our taxpayers, or about 18 million Americans will benefit 
from a higher tax credit, which means a cut in their taxes.  Now, 
that's a far cry from the notion about deficit reduction tax changes 
that some people have. 
	     
	     For every American whose tax rates increase because of 
deficit reduction, 12 more will see a cut in their taxes. 
	     
	     And I want to wind this up with a plug for the EITC and 
the advanced payment option, because a lot of people don't know about 
that, and hopefully you can help us get that message out to lower 
income people.  This gives the hard-working, moderate family 
income -- it gives them a break.  When we fully implement the 
expansion that's beginning this year, the effect will be to turn a 
$4.25 an hour job into a $6.00 an hour job for a working family with 
two children.  That's an important step to make sure that Americans 
who play by the rules, who work hard, have the opportunities they 
deserve.  Taxpayers who are qualified this year can apply for the 
credit on their tax forms.  
	     
	     Those who want the 1994 credit in advance, if they'll 
fill out that W-5 form, that will mean they can get about $100 a 
month in a paycheck, and the have 40 percent of it waiting at the end 
of the year for them by tax time.  We have a campaign underway to try 
to get that message out there, to get it out to the private sector, 
to have those employers let their employees know about it so they can 
take advantage of it.
	     
	     I want to close by repeating the message as we go into 
the home stretch of filing our income taxes.  It's just plain wrong 
that income taxes are going up for a great many Americans -- 98.8 
percent of all taxpayers this year have no changes in their income 
tax rates.
	     
	     Thank you, and I'll take such questions as you have.
	     
	     Q    Mr. Secretary, you've said and the administration 
maintained there was no change in income tax rates.  The rates are 
not going up.  Do you acknowledge --
	     
	     SECRETARY BENTSEN:  Except for 1.2 percent.
	     
	     Q    Except for 1.2 percent.  Do you -- how do you feel 
about the suggestion a lot of Americans who are filing their taxes 
and find themselves paying more taxes?  Whether their rates have gone 
up or not, the check that they're writing to the IRS is apparently 
larger.
	     
	     SECRETARY BENTSEN:  The vast majority of them, it's 
because of increases in income that have been happening -- incomes 
have gone up some.  But the vast majority who had the same income are 
paying less taxes -- or having no increase, rather, I should say.
	     
	     Q    How many people are affected by the 1.2 percent?  
In other words, how many individuals does that apply to?  And what 
percentage of --
	     
	     SECRETARY BENTSEN:  About 1.4 million.
	     
	     Q    So 1.4 million will have to pay more.
	     
	     SECRETARY BENTSEN:  Right.
	     
	     Q    Are they households or couples or --
	     
	     SECRETARY BENTSEN:  No, that's total returns.
	     
	     Q    Returns -- 1.4 million returns.  And what 
percentage  of the GNP, what percentage of the money that the IRS 
collects will come from those 1.2 percent -- those 1.4 million 
returns?
	     
	     SECRETARY BENTSEN:  We'll have about $20 million -- $20 
billion coming from them.
	     
	     Q    So this affects $20 billion.  And what percentage 
of that is the total money collected by the IRS?
	     
	     SECRETARY BENTSEN:  Do you have a number on that one?  
(Laughter.)  We're going to have to get you the detail of some of 
that.  We'll be happy to get you some of the detail.
	     
	     Q    The point is, though, that a lot of critics have 
argued that that increase, while it seems, the way you phrase it, 1.2 
percent negligible, will have an impact on the overall economic 
growth, the overall health of the economy because a big chunk of that 
economy, the wealthiest portion of the economy is being affected.
	     
	     SECRETARY BENTSEN:  Well, a small percentage of the 
economy is being affected, but a very major percentage of the economy 
is being affected by the cut in the deficit.  And what you see in the 
reduction in long-term rates -- you've seen some increase recently -- 
but long-term rates in this country are still, as far as the 
traditional rates, are substantially lower than normal.
	     
	     And that is giving you some $500 billion worth of 
savings, capital savings, that now becomes available to business.  
And that has given us a great increase in the economy, and that has 
given us an increase in the GDP, has created some 2 million jobs 
approximately in the first year, and has us well on target to the 
creation of 8 million jobs over the total of the four years of this 
term, which was the objective of the administration.  So it's been an 
enormous stimulus to the economy.  It is far outbalanced to any drag, 
and that's obvious.
	     
	     Q    What is this $20 billion you mentioned?  Is this 
the total amount of taxes that will be paid by this 1.2 percent or is 
that the increment?
	     
	     SECRETARY BENTSEN:  That is the total -- no, let me 
think about that one.  That is the increment, the increase, $20 
billion.
	     
	     Q    That's how much more you get based on the new tax.
	     
	     SECRETARY BENTSEN:  That's correct.
	     
	     Q    You don't know that yet, you just -- because you 
haven't seen the returns.  You just theorize.
	     
	     SECRETARY BENTSEN:  No, but that's obviously a forecast 
in the best judgment we could make.  Now, if for any reason we were 
off on that, it would be because we had overestimated how the economy 
was going to do.  Actually, we have been conservative in that regard, 
and we underestimated how the economy would do.
	     
	     Q    Mr. Secretary, do you include in your calculation 
that 98 percent or so Americans aren't seeing a tax increase, do you 
include in that Social Security and Medicare taxes?  Are they going 
up in some way that actually does result in an increase?
	     
	     SECRETARY BENTSEN:  I was talking about 1993 and I was 
talking about income taxes.  Now, in Social Security, that takes 
effect in '94 and is phased in over a period of time there.  It goes 
up to income -- 85 percent of the receipts of the Social Security 
beneficiary for an individual over $34,000 approximately, and for a 
couple, $44,000.
	     
	     Q    I was talking about --
	     
	     SECRETARY BENTSEN:  And let me also say on that then to 
give you further clarification, that will affect approximately one 
out of eight of the Social Security beneficiaries.
	     
	     Q    I was talking about the payroll deduction, also.  I 
realize you're talking about recipients, but in addition to that, are 
you including whether or not there's an increase in the actually 
payroll deduction, either the percentage formula or however it's 
calculated year by year -- doesn't that go up each year?
	     
	     SECRETARY BENTSEN:  I don't have that number.  I'll get 
it for you.  Would you get him the number for the question?
	     
	     Q    Mr. Secretary, how do you account for this fact 
that you noted here that 40 percent of the people believe that their 
income taxes are going up?
	     
	     SECRETARY BENTSEN:  I think we've done a poor job of 
getting the message out there.  And I think, perhaps, you do not help 
up to the extent we would have hoped you would of.  (Laughter.)  But 
in addition, its your job and its my job to try to get that 
information out there.  And I think we did a good job of conveying 
that to the Congress, but we did not get it out to the American 
people as we should have.
	     
	     Q    Why do they have that impression?
	     
	     SECRETARY BENTSEN:  Because we didn't get the message 
out there, and generally people are pessimistic as to what's going to 
happen to them insofar as taxes.  But the very reason for having this 
now is to try to help get that message out there at taxpayer time.
	     
	     Q    Do you find -- aren't state taxes going up, other 
taxes going up to make up for what states perceive was a shortfall in 
federal funds?  The average person, the bottom line --
	     
	     SECRETARY BENTSEN:  That depends on the state, that 
depends on the city.  I'm not prepared to try to comment on that.
	     
	     Q    What do tax returns so far this year show in terms 
of a pattern of people claiming the EITC?  Are as many more people 
claiming it as you expected when it was --
	     
	     SECRETARY BENTSEN:  No.  Insofar as claiming it early on 
a payment month by month, it's only about one percent, as I recall.  
And we're trying to get that message out, because it could be $100 a 
month, and that's a good piece of change for people who are of 
moderate income, living in expensive areas.
	     
	     Q    But even in terms of people claiming it after the 
fact for their '93 earnings, there are more people eligible for it 
under '93 --
	     
	     SECRETARY BENTSEN:  Than are claiming it, but it has 
gone up substantially, and we're working very hard to getting that 
information out there. 
	     
	     Q    Mr. Secretary, is it important to the 
administration that this trend of only a very small margin of the 
population having their taxes go up -- the same place into the 
future, and what's the President's thinking now in regards to future 
tax policy and the need for, or lack of it for tax cuts?
	     
	     SECRETARY BENTSEN:  We have no plans to raise the income 
tax.
	     
	     Q    Mr. Secretary, at what point will you all know 
whether or not you have an increase in receipts, in revenues from 
people who have not had their tax rates changed?  You've said here 
that 98.8 percent have no increase in rates. 
	     
	     SECRETARY BENTSEN:  That's right.  
	     
	     Q    There appears to be some view out there in the 
public that, nevertheless, they are paying more.  At what point will 
you have some sort of a handle on whether or not you are actually 
taking in more tax revenue from people whose rates haven't changed?
	     
	     SECRETARY BENTSEN:  Do you have an estimate on that --
when we'll be at that point in your receipts?
	     
	     MR. COHEN:   In April, you've got the receipts estimates 
coming in.  Maybe in May we would have some idea of how much came in 
April.
	     
	     Q    Mr. Secretary, near the end of the Bush 
administration, to give people more money, the sense of having more 
money in their pockets, they changed the withholding rates.   
	     
	     SECRETARY BENTSEN:  I remember that.
	     
	     Q    As a result, people got less, smaller refunds, and 
some people ended up paying instead of getting refunds.  Do you think 
this contributes to the feeling on the part of Americans that they 
are paying more in taxes, and has the administration given any 
thought to going back to the old formula?
	     
	     SECRETARY BENTSEN:  Oh, absolutely not.  No, I don't 
think so, and that we don't have any plans to do that.
	     
	     Q    Do you support the -- do you like the new formula, 
have no problem with it at all?
	     
	     SECRETARY BENTSEN:  No.  I think it's working and I 
think it's fair distribution of the burden of government.
	     
	     Q    What are the prospects for filling the promised 
middle income tax cut?
	     
	     SECRETARY BENTSEN:  Well, I think what you've seen in 
this instance, what has paid off most of all, is a stimulation to the 
economy by the deficit cut and the creation of jobs.  And I think 
that's what middle income appreciates most of all -- having a job.  
And what you're seeing in the adding of some two million in excess 
jobs a year is not hamburger-flipping jobs, that those service jobs, 
or the vast majority of them are good-paying jobs.  I've had, at the 
Job Summit meeting that we had recently with the G-7, labor ministers 
and finance ministers, there was a great deal of admiration as to 
what we have been able to have happen in this country and the 
creation of jobs, and particularly that by small business.
	     
	     Q    So that tax cut's not --
	     
	     MR. BENTSEN:  This is better than a tax cut.  You've got 
a job.
	     
	     MS. MYERS:  Thank you.
	     
	     MR. BENTSEN:  Thank you very much.
	     
	     THE PRESS:  Thank you.

				 END2:40 P.M. EDT

