The Senate vote to pass a $70 billion tax “adjustment” bill (recently signed into law by President Bush) will pay a big dividend for small businessmen and women — including many farmers — in the Mississippi Delta, Mississippi Sen. Trent Lott says.
Defending the bill that has been described by many as a “tax cut for the wealthy,” Lott said the measure will actually keep the tax bill for many Americans from increasing over the next few years.
“Now some in the press have referred to that derisively as just another tax cut,” Lott told members of the Delta Council at their annual meeting at Delta State University. “Well, if you don't extend the rates on taxes on capital gains and dividends beyond where they're now scheduled to stay, and they go up, you get a tax increase.
“And when you allow no extension for expensing for small businessmen and women, that is important to the Mississippi Delta because agriculture is about more than just the crops you produce. It's about all these parts that serve you, the people who provide fertilizers and the gins and the stores. Most are small businesses, and when you increase small business expensing in the Delta, it's not a small thing.”
Lott said the Tax Increase Prevention Act of 2006 would basically quadruple the deduction for expenses that small businesses can take, allowing them to write off up to $100,000 a year in new equipment purchases. “These provisions alone will prevent a tax increase of more than $7 billion from being levied against small businesses, the backbone of our economy.”
Another provision would shield 15 million middle-income Americans from the alternative minimum tax, which has ensnared more families in recent years. The Senate bill exempts taxpayers making up to $62,550 for married couples and $42,500 for singles from the AMT.
The bill would also hold the line on dividend and capital gains taxes for tax savings of $38 billion per year, according to Lott.
“Most taxpayers have some stake in the market through dividends, and stock ownership is commonplace among working Americans,” he said. “With home ownership at record levels, many Americans of all incomes can be impacted by capital gains taxes on the sale of major assets like homes whose values have appreciated since purchase.”
A smiling, relaxed Lott was interrupted several times by applause during the speech, his first at Delta Council Day since he resigned as Senate majority leader after being pilloried in the media for remarks he made at a dinner honoring the late Sen. Strom Thurmond of South Carolina.
Lott said he had learned a great deal after enduring another difficult year in 2005. “In that one year, I lost my mother, I lost my home and had surgery on my back side. So it was not a good year, if you get my drift.”
After he was named a finalist in the Delta Council's Wear Cotton contest, Lott noted he was wearing a new seersucker suit because his old one washed away in Hurricane Katrina. “The old one was getting kind of worn anyway,” he said.
He also noted that being a plaintiff was a new experience for him, referring to the lawsuit he and other Gulf Coast residents have filed against their insurance companies. The latter have refused to pay for what they say is flood damage due to the storm surge from Katrina.
The senator surprised many in the audience when he said he was supporting Arizona Sen. John McCain for the Republican nomination for president. He said he's backing McCain, whom he has often been at odds with in recent years, because of the latter's Mississippi roots.
Lott said he and McCain both spring from Scottish clans — the Watsons and the McCains — who were neighbors in Carroll County in central Mississippi. “When my uncle Ernie Watson ran for the state senate in 1952, his campaign manager was Joe McCain, John McCain's uncle,” he said.
“So as bad as he gets and as mad as I get at him, he's ours. And we're going to fight together.”
The night before he spoke at the Delta State campus in Cleveland, the Senate fell a few votes short of cutting off debate on a new health savings accounts bill that could help small businesses, including farm groups, band together so they to buy health insurance.
Sponsors of the legislation, which was passed out of the Senate Health Education Labor and Pensions Committee, received 55 votes, five short of the number needed to invoke cloture. “They say we have 40 million Americans who don't have health insurance, and we feel this is a way to get more of them insured,” said Lott. “We'll probably try again in the near future.”
Lott said the Senate faces additional votes on difficult issues, such as energy policy, immigration reform and the emergency supplemental appropriations bill that has brought down the wrath of fiscal conservatives on Lott and fellow Mississippi Sen. Thad Cochran.
Energy shortages seem to be a reoccurring problem for the United States, he said, noting that Congress has had to try to deal with them in the 1970s, 1980s and again in 2005-06. Most of the problems seem to be self-inflicted.
“We have met the enemy, and he is us,” said Lott. “We all want to be able to drive our SUVs, but we don't want any new oil refineries or nuclear plants in our backyard. In short, we don't want to be bothered. We can't have cheap prices and not do more to produce oil.
“I have a philosophy that we should only drill for oil where it is. And, if they think there's oil under my vacant lot in Pascagoula, then they can sink that well.”
Immigration is another problem that seems to keep repeating itself. Congress passed immigration reform legislation in 1986 that included amnesty for illegal aliens. “But it didn't work,” he said. “People kept entering the United States illegally, and we tried to pass another reform bill in 1996. So here we are again trying to deal with in 2006.”
Lott said he believes any new legislation Congress passes must first provide secure borders. “We have 11 million to 12 million in this country illegally, and, if we don't do something now, in 10 years, it will be 29 million. My main concern is that we do whatever it takes to keep terrorists from blowing up the Capitol.”
Any new law must also recognize that the country needs temporary workers, he said. “We should require them to go home every so often to see their families — my son-in-law who is a small businessman says they should go home every eight months. And they should learn English and learn to sing the Star-Spangled Banner in English.”
And, finally, the new law should provide a solution for dealing with people in the country illegally. “Many of them have been here for some time, but that should not mean they automatically go to the front of the line to qualify for U.S. citizenship.”
Lott also defended the fiscal year 2006 emergency supplemental appropriations bill the Senate passed earlier this month. Among other things, the bill would provide $700 million for moving a railroad along the Gulf Coast, the “railroad to nowhere” as some critics have labeled it.
The senator said he makes no apologies for trying to win as many federal dollars for projects in Mississippi as possible, pledging that he and Cochran would continue working to obtain funding for hurricane recovery efforts along the Gulf Coast and for such projects as the new Mississippi River Bridge at Greenville and I-69, the interstate highway that will pass through the Delta.