The bill before us today has many provisions I support, including the extension of the research and development tax credit, small business expensing, the deduction of higher education expenses, and brownfield sites expensing. In fact, I am a cosponsor of a bill to make the Research and Development Tax Credit permanent, as it keeps American companies competitive and provides a strong incentive for businesses to invest in the future and create jobs. I also support other provisions in this bill that help make college more affordable to millions of students and allow teachers to deduct out-of-pocket expenses.

Unfortunately, the Republicans did not stop there. H.R. 4297 also includes a two year extension of the capital gains and dividend tax cuts, which are not scheduled to expire until 2008. Nearly half of these tax cuts will go directly into the pockets of the 1 in 500 taxpayers who earn more than $1 million per year. The contrast is stark: those who earn less than $40,000 will see an average tax cut of $7, while those earning more than a million will save an average of $32,000 in taxes.

While Republicans claim that the dividend tax cut boosts the economy, the facts are not on their side. The Federal Reserve Board recently released a report declaring that the dividend tax cuts of 2003 have not boosted the stock market. To quote the report, “We fail to find much, if any, imprint of the dividend tax cut news on the value of the aggregate stock market.” There you have it: the nation’s top economists have determined that dividend tax reduction does not boost the stock market or increase wealth for shareholders.

Most disingenuous is the fact that just three weeks ago, the House voted to cut Medicaid, student loans, foster care assistance, and food stamps under the guise of deficit reduction. However, today, we are voting for tax cuts that cost more than the money saved from the spending cuts. The Republicans have exposed their real agenda: they are robbing the poor to pay the rich.

This year, we have a projected deficit of more than $300 billion. In addition, we will spend billions more in Iraq and Afghanistan, as well as rebuilding the Gulf Coast in the wake of Hurricanes Katrina, Rita, and Wilma. We simply cannot afford all of these emergency expenses while cutting taxes for the richest Americans.

Thankfully, there is an alternative. The Rangel Substitute includes all the noncontroversial tax extensions I mentioned earlier and also contains three important provisions not found in H.R. 4297. First, the substitute drops the capital gains and dividend tax cuts in order to fix to the Alternative Minimum Tax (AMT). The substitute would eliminate AMT liability for individuals who earn less than $100,000 and joint filers with incomes below $200,000, cutting taxes for 16 million families. Without this provision, more than half of all families with two children and incomes between $75,000 and $100,000 will be saddled with the AMT. This tax increase hits the middle class, and the Republicans are content to sit idly and let it happen. The Democratic AMT fix is similar to the Senate-passed tax reconciliation legislation, which would ensure a speedy conference and protect taxpayers before the provision expires at the end of the year.

In addition, the substitute extends the tax-free status of combat pay. While our military personnel are risking their lives abroad to keep us safe, the least we can do is prevent burdening them and their families with a huge tax increase.

Best of all, the substitute is fully offset, and will not add a dime to the national debt. The Rangel substitute will revive the economy, relieve the tax burden on working families, encourage companies to invest in the future, and create jobs. The Republican bill will hand out money to rich people and increase the deficit.

The Rangel Substitute is a common-sense alternative that prevents a tax increase on working families, honors our troops, and does not cost a dime. We need responsible tax policies instead of the reverse Robin Hood approach taken by Republicans. I urge my colleagues to join me in supporting the Rangel Substitute and opposing the underlying bill.