Here is the response of Rep. Dan Rostenkowski (D-Ill.), chairman of the House Ways and Means Committee, to President Reagan's speech:
Good evening, I'm Congressman Dan Rostenkowski from Chicago.
Let me read you something that pretty well explains what tax reform is all about -- and what Democrats are all about:
"The continued escape of privileged groups from taxation violates the fundamental democratic principle of fair treatment for all and undermines public confidence in the tax system."
That was President Truman's message to Congress 35 years ago.
Trying to tax people and businesses -- everyone -- fairly. That's been the historic Democratic commitment. Our roots lie with working families all over the country -- like the Polish neighborhood where I grew up on the north side of Chicago.
Back then, most of the men worked in breweries and steel mills and packing houses -- proud families who lived on their salaries. My parents and grandparents didn't like to pay taxes. Who does? But, like most Americans, they were willing to pay their fair share as the price for a free country where everyone could make their own breaks. Change for the Worse
A lot of guys I grew up with now live in the suburbs. They make more money than their parents. In most cases, their lives have changed for the better. But the tax system has changed for the worse -- and so has their faith in it.
For years we in Congress -- Democrats and Republicans -- have used taxes and incentives for economic and social change. We gave the oil companies breaks to fuel our heavy industry. We gave real estate incentives to build more housing. We sharpened our technology with research and development credits. We gave tax breaks to encourage people to save. We piled one tax benefit on top of another -- each one backed with good intention.
Unfortunately, it didn't take too long before those with the best accountants and lawyers figured out how to beat the system -- and lower their taxes -- sometimes paying nothing. And the cost of government has slowly shifted to small businesses and families like those in my neighborhood, who didn't have the guile to play the game of hide-and-seek with the IRS.
Every year politicians get up and promise to make the tax code fairer and simpler -- but every year we seem to slip further behind. Now most of us pay taxes with bitterness and frustration. Working families file their tax forms with the nagging feeling that they're the country's biggest suckers and chumps. Their taxes are withheld at work -- while the elite have enormous freedom to move their income from one tax shelter to another.
Their bitterness and frustration is about to boil over. And it's time it did.
But this time there's a difference in the push for tax reform. This time, it's a Republican president who's bucking his party's tradition as protectors of big business and the wealthy. His words and feelings go back to Roosevelt and Truman and Kennedy. But the commitment comes from Ronald Reagan. And that's so important and so welcome.
Because, if the president's plan is everything he says it is, he'll have a great deal of Democratic support. That's the real difference this time. A Republican president has joined the Democrats in Congress to try to redeem this longstanding commitment to a tax system that's simple and fair. If we work together with good faith and determination, this time the people may win. This time, I really think we can get tax reform.
We Democrats have not yet analyzed the president's tax plan. We can't embrace everything in it until we measure it against our own traditional standards of tax reform.
We Democrats are committed to the principle that those who draw great wealth from this country should pay a fair share of taxes. We believe that no person or corporation should be able to hide from that basic American obligation. Why should a bank teller pay a higher rate of taxes than the bank she works for? Why should a gas-station attendant pay a greater share than the oil company? Getting Away From 'Gimmicks'
We believe that business should do what it does best -- whether it's making cars or raising beef -- and not get hung up on gimmicks and shelters just to avoid taxes. Because, for the rest of us, their gain is our loss, and we suffer.
But far and away the most important measure of the president's tax reform package is its effect on working men and women.
The president's plan provides real relief for middle-income taxpayers. Democrats will follow his lead and try to hold his package together, if that's true.
Democrats will not, however, give the president's reform plan a rubber stamp. If anything, it's a starting point. We will make some changes -- correct some imbalances -- seek to make it fairer. We will carefully measure the effect of the president's reforms on middle-income taxpayers.
We will also be sensitive to American industry's increasing struggle to maintain a competitive edge overseas.
The president has taken some lumps for giving way to special interests. He now knows how very difficult it is to tamper with the tax benefits that people and corporations have come to enjoy and often abuse. He knows how deep the anti-reform forces are dug in.
I only ask that he understand that the pressure on Congress to give way even more will be much greater. We are 535 men and women, each from a different part of the country, each with different interests to represent -- each with our own tax agenda. Big special-interest lobbies have already joined forces against reform. The campaign to divide Congress has begun.
The battle for reform will be long and tough. It has been fought by Congress and lost before. In the past, we have been divided and beaten by the legions of special interests -- each demanding protection in the name of jobs or national security or economic growth.
In the end, tax reform comes down to a struggle between the narrow interests of the few and the broad interests of working American families. Today the only voices we in Congress hear are those determined to stop reform. Call to a 'Silent Majority' -
We need to hear your voice.
We will lose this battle if America remains silent. Apathy is the fatal disease of reform. The odds makers are betting that working men and women will not answer the call. They're betting that once again a vocal minority can whip a silent majority.
The president needs your support, and he has asked for it. I, as chairman of the Ways and Means Committee, a Democrat, need your support. And I'm asking for it too.
If you've never stood up for your rights as a taxpayer -- if you've never voiced your frustration and anger over the unfairness of today's tax system -- sit down and write a letter to Washington. Even if you can't spell Rostenkowski, put down what they used to call my father and grandfather, Rosty. Just address it to R-O-S-T-Y, Washington, D.C. And stand up for fairness and lower taxes.
It would certainly stir "give 'em hell" Harry Truman. And it would certainly help Democrats put a tough, well-balanced tax reform package on the president's desk. Let's do it.