[Congressional Record Volume 140, Number 112 (Friday, August 12, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 12, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                THE FREEDOM AND FAIRNESS RESTORATION ACT

                                 ______


                        HON. WILLIAM F. GOODLING

                            of pennsylvania

                    in the house of representatives

                        Friday, August 12, 1994

  Mr. GOODLING. Mr. Speaker, the current tax system is in need of a 
serious overhaul. Most of the individuals I have spoken with will never 
state that it is simpler to file their tax forms today than it was 
before the 1986 Tax Reform Act. The only real reform we engaged in 1986 
was to take many individuals off the tax roles by reducing the 
incentives for long term economic growth and savings.
  The current Federal tax system is complicated and certainly not as 
progressive, nor as equitable as proponents of the 1986 tax changes 
promised. Based on the aggregate total 1991 tax returns to the Internal 
Revenue Service, the top 25 percent of income earners pay 77.2 percent 
of individual income taxes. In addition, the top 10 percent pay 55.3 
percent, the top 5 percent pay 43.4 percent, and the top 1 percent pay 
24.6 percent. Progressivity is an admirable goal, but based on our 
Federal returns, it is simply not evident in our current tax structure.
  Our Nation is ready to enter into the 21st century, and yet we have a 
tax system based on the 19th century. The existing tax laws, rules, and 
regulations hold back needed investment and savings in our economy 
which could derail the inventors, and the innovators of the future.
  I believe the Congress should consider reigniting the debate on tax 
simplification. A flat tax system should be considered as a viable 
option for real tax reform. A flat tax approach would simplify the 
current Federal tax system. I believe by having every American pay the 
same flat tax rate, individuals would agree to a more simple and 
equitable form of taxation.
  Mr. Speaker, I am pleased to lend my support as a cosponsor of H.R. 
4585, the Freedom and Fairness Restoration Act, introduced by 
Congressman Dick Armey. H.R. 4585 would establish a new flat tax system 
which would implement the use of a 17 percent flat tax rate for all 
Americans. This bill would only exempt those below the Federal poverty 
line. The Armey bill would reduce excessive spending by our Federal 
Government while also reducing the tax burden on the American people.
  Our economy currently lacks the seed money to sustain long term 
economic growth. H.R. 4585 eliminates the double taxation on long term 
investments by repealing the current tax on capital gains, tax on 
Individual Retirement Accounts [IRA's] and tax withholding. I believe 
elimination of these provisions will provide more individuals with the 
desire to invest money, which in the end will create more available 
capital for businesses, and thus spur economic development and jobs.
  H.R. 4585 is similar to legislation which I have supported in the 
past. In 1984, I cosponsored H.R. 2137, which like the Freedom and 
Fairness Restoration Act, proposed a Federal flat tax system. Under 
this legislation, a 10 percent income tax rate would have become 
effective for all individuals, and exempt only those whose income was 
under $10,000. This bill if enacted 10 years ago would have been much 
better than the changes in the Internal Revenue Code of 1986. However, 
I am concerned whether H.R. 4585 will be able to sustain the current 
level of receipts by reducing Federal tax rates and spending at the 
same time.
  In recent history, Congress tried this approach before and found it 
was relatively easy to reduce taxes, but harder to reduce the size of 
the Federal Government. Finally, I also believe every individual should 
have an obligation to pay Federal taxes to better understand what this 
great Nation provides them in benefits, even if it is a nominal tax 
rate.
  Mr. Speaker, I believe it is time to begin a discussion on reforming 
the current tax system. As George Santayana has stated, ``those who 
speak most of progress measure it by quantity and not by quality.'' Our 
so called progressive tax system is not anything that the American 
people were expecting when they asked for reform. Enacting H.R. 4585 
would be a step in the right direction. This bill would give the 
Federal tax system back to the American people and wrest the system 
away from the bureaucrats in Washington. While I do not agree with 
every proposal included in this legislation, I do support the need for 
reforming an inequitable Federal tax system and urge my colleagues to 
lend their support to this needed legislation.

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