Rep. J.D. Hayworth: What the tax cut means for you
(CNN) -- J.D. Hayworth has represented Arizona's 6th Congressional District in the House of Representatives since 1994.
CNN Moderator: Welcome, Rep. J.D. Hayworth, to the Crossfire Chat room.
J.D. Hayworth: Thank you for the chance to be here.
CNN Moderator: What does this tax cut mean to the American people?
J.D. Hayworth: It means that if you pay income taxes, you will soon receive a check in the mail for $300 if you're single, $500 if you are a single parent, and $600 if you're a married couple. And over time, marginal tax rates will be reduced.
CNN Moderator: When will the American people feel the relief?
J.D. Hayworth: As soon as the check hits their mailboxes, and they save, spend, or invest it as they see fit. So, that will be in July.
Question from the chat room: What's the rationale behind a fixed amount, rather than an amount based on actual tax paid?
J.D. Hayworth: Well, actually, in the long run, it is based on the amount of tax paid, if you take into account the progressive structure of the tax code. What this is, across the board, is the closest to an average rebate or return based on a reduction of the lowest tax bracket. Not to get too complicated, it just takes into account the progressive nature of our code, and offers immediate relief to everyone who pays income taxes.
Question from the chat room: Congressman Hayworth, do you agree with Congressman Rangel that taxes are the same as charity?
J.D. Hayworth: I have a profound disagreement with my friend Charlie, because taxes aren't charity. While they are paid "voluntarily," they are a requirement by law, made possible by the 16th amendment to the Constitution. The danger comes when folks in Washington feel charitable with other people's money, and spend it on dubious projects in a wasteful manner. If you've been overcharged, you deserve a refund, and the bottom line is, that's what this tax relief legislation does.
CNN Moderator: Are there loopholes that will end up disproportionately benefiting certain groups?
J.D. Hayworth: That's a good question, because of the complicated nature of our tax code. It's something that I've spoken with the President about. We had a long visit on the way to Arizona on Air Force One last week. I think the big issue with Republicans and Democrats alike is eventual tax reform, because the code has grown so large and so complicated that oft-times there are permutations no one, not even the most gifted economists have anticipated. But, those small permutations do not outweigh the overall desirability of giving the American people back some of their hard-earned money.
Question from the chat room: Can we expect other tax cut proposals to be debated and passed during this or the next Congress?
J.D. Hayworth: Yes. The President, along with our common sense majority in the House, is prepared to move more tax legislation. We'll work to do that. I believe that even in the Senate, the same coalition that came together for this tax cut, including one dozen Democratic Senators, will come together to pass more legislation.
Question from the chat room: How will the President's faith-based initiative affect taxes in America?
J.D. Hayworth: There was an effort, really apart from the faith-based initiative, to include a provision known as charitable choice. In other words, for those millions of Americans who don't itemize, to allow them to claim charitable donations. That wasn't included in this legislation, and it holds great promise. It's fair to say that it's aligned with faith-based initiatives, but it's broader in scope, because it's not reliant on being a faith-based organization. There are many groups who don't have a spiritual purpose. This may be something that is resurrected in a tax bill in the not-too-distant future.
Question from the chat room: Mr. Hayworth, what are the chances of tax simplification in this Congress?
J.D. Hayworth: I think that there are possibilities for it. I think it will take executive leadership on the issue, whether it is tax code simplification, or tax reform. The difficulty in tax simplification or tax reform, the missing ingredient, has been executive leadership; in other words, the president, the administration, Republican or Democrat, voicing an interest in seeing that idea advanced. The president signaled to me aboard Air Force One, that he had such an interest. So my advice is to stay tuned.
Question from the chat room: Mr. Hayworth, if the country gets into fiscal trouble, can the Congress cut off the tax break?
J.D. Hayworth: The sad fact is that even without fiscal difficulty, there are already moves afoot to try to raise taxes. Despite the talk of bipartisanship, Senator Daschle, Congressman Rangel, and others will move to rescind parts of this tax relief legislation. Understand that when they try to do that, in essence, they are trying to raise taxes. Implicit in the question is the notion that this will somehow bring fiscal disruptions. I respectfully disagree. Far from an economic downturn, this modest tax relief will offer a boost to our economy, and help move it out of the recent doldrums we've experienced.
CNN Moderator: Will the rebates be subjected to state taxes?
J.D. Hayworth: I can't speak with authority on the different tax laws in the different states. I hate to use the trite phrase "consult local listings," but I saw one item that I think in five states, that's the case. But don't be surprised if those states, either through the legislature, or a special session of their legislature, move to rescind any tax liability for this rebate.
Question from the chat room: Congressman Hayworth, will these tax cuts give rise to inflation, as some suggest?
J.D. Hayworth: The basic staple of inflation is not tax relief, it is addiction to higher spending, and higher spending that eventually generates huge deficits. What my friend Charlie left out of tonight's broadcast, was the observation that the largest tax increase in American history did not bring about prosperity. Instead, it was the arrival of our new conservative majority in Congress that held the line on spending increases and dragged former President Clinton into an agreement to hold the line on spending. We in the Congress, especially with the letter I have put together to urge the President to hold the line on spending, are saying that enough of us will vote to uphold or sustain his vetoes of spending bills, if Washington goes back to its bad old ways of spending more than our people can afford. Please understand we're not talking about draconian reductions in spending. The President has simply requested that we hold down the spending increases to four percent. Only in Washington would a spending increase be described as a spending cut.
Question from the chat room: Has the Congress committed itself to maintaining balanced budgets, or will we be paying for these tax cuts for the next 40 years?
J.D. Hayworth: Again, as I just outlined, Congress must maintain fiscal discipline, not through draconian cuts, but by holding the rate of spending increases down to a manageable level. The problem in the 1980's was that for every new dollar of tax revenues that came in, and understand, the tax relief of the early 80's resulted in an increase in receipts for the government, or an increase of tax dollars but what happened was that for every new dollar of revenue, Congress spent $1.53. Obviously, that cannot happen again.
CNN Moderator: Thank you for joining us this evening, Congressman Hayworth. Do you have any final thoughts you'd like to share with us?
J.D. Hayworth: Thanks to all those who joined us, both on cable TV, and in cyberspace!
CNN Moderator: Thanks again for joining tonight.
J.D. Hayworth: Thank you! Y'all take care!
This is an edited transcript of a chat with Rep. J.D. Hayworth that took place on June 7, 2001. Rep. Hayworth joined the CNN.com chat room via telephone from Washington, D.C., and CNN provided a typist.
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