Hurricane Tax Relief: for Victims or for Contractors?
Kucinich gave the following speech in Congress on September 21, 2005:
Speaking during debate on H. Res. 454, Providing for Concurrence by House with Amendment in Senate Amendment to H.R. 3768, Hurricane Katrina Tax Relief Act of 2005, Congressman Kucinich said:
"Mr. Speaker, I will vote for this bill; but I have to hand it to this administration, they want to lower your taxes so earnestly that they will even lower your wages to do it.
"Through an executive order, the President lowered the wages workers will be paid to rebuild the hurricane-affected region. He suspended the Davis-Bacon Act, a 74-year-old law which requires that companies receiving Federal contracts pay the average wage to employees hired to perform those Federal contracts. With smaller incomes, workers will pay less.
"But corporate income, unlike worker incomes, will rise. The corporate contractors will be able to keep more of the contract for themselves through a combination of setting lower wages for workers and receiving tax exemptions under the provisions of H.R. 3768. Suspension of the Davis-Bacon Act will give contractors unprecedented power to set wages. That is because the hurricane destroyed the labor market in the region. Nearly everyone is out of work; nearly everyone needs a job. After losing everything, how many people will be able to hold out for higher wages? Not many.
"Thus, labor market forces will not determine wages. Instead, hurricane victims and workers who may be brought into the region are at the mercy of Halliburton and Fluor corporations, just to name a couple of contractors who have won or will win construction contracts in hurricane reconstruction and which will dictate wage levels.
"The bottom line is this: Hurricane tax relief means one thing if you are a hurricane victim and another if you a corporate contractor receiving Federal funds to rebuild the hurricane-affected region. Tax relief for hurricane victims will primarily take the form of paying less taxes on smaller wages. But tax relief means something very different to the corporate contractors. They will be paying less taxes on increased income."
[Ed. note: The amendment was agreed to by recorded vote: 422 - 0 (Roll No. 480). The Senate then agreed to amendment of the House to the amendment of the Senate by unanimous consent.]
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