[Congressional Record Volume 140, Number 135 (Friday, September 23, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: September 23, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
        H.R. 5064: THE INSURANCE TAX FAIRNESS ACT REINTRODUCTION

                                 ______


                            HON. BOB FILNER

                             of california

                    in the house of representatives

                       Friday, September 23, 1994

  Mr. FILNER. Mr. Speaker, I have reintroduced legislation that I first 
introduced as H.R. 4510 on May 26, 1994, to amend the Internal Revenue 
Code of 1986.
  The legislation, the Insurance Tax Fairness Act of 1994, remains 
exactly the same in text and purpose with a small, though significant, 
addition. In section 4, the Sense of Congress Relating To Use of 
Increased Revenues, ``additional health benefits'' was added. Since 
there is such a tremendous need in this Nation for a caring and sharing 
health program, this addition would make the goals of the legislation 
more comprehensive and inclusive.
  Mr. Speaker, my cosponsors and I reintroduce this legislation with a 
renewed sense of purpose and commitment. This has been underscored by 
the dramatic cuts of programs in several appropriations bills affecting 
the lives of many Americans who are struggling daily to make ends meet. 
This was emphasized when Hunger Caucus Chairman Tony Hall hosted a 
briefing on my legislation. This briefing dramatized the major 
obligation we have as legislators to find new ways to fund programs 
that we know work and which our constituents so strongly support.
  My legislation will close an unjust loophole that has been enjoyed by 
the very largest mutual insurance companies. Since the mid-1980's, this 
loophole has cost the U.S. taxpayers about $2 billion annually, a 
staggering amount of money when compared to the needs in our 
communities. I include, Mr. Speaker, just the headline of a recent item 
from a small regional newspaper which, unfortunately, speaks volumes: 
``Meals on Wheels to Hold Yard Sale to Offset Lost Funding.''
  Mr. Speaker, it is difficult to tell my constituents in San Diego 
that we cannot provide funding for such programs that provide food to 
our senior citizens while the Tax Code provides extraordinary 
advantages to those who know how to ``game'' the system.
  It remains a tragedy of large proportions that a nation of our 
stature does not provide the revenues sufficient to meet the needs of 
hungry children, the elderly poor, and others. This is particularly 
true while a few privileged corporations continue to receive favored 
tax treatment.
  My legislation is designed to do away with section 809 of the Tax 
Code that both the U.S. Treasury and the GAO have termed as flawed and 
unworkable and contrary to what Congress intended.
  In fact, Mr. Speaker, certain large mutual insurance companies have 
been paying no tax on earnings from business activity since 
approximately 1986. By being able to modulate the sale of assets, the 
few giant mutuals were able to increase or decrease taxes on business 
activities under the terms of section 809. Obviously, this was contrary 
to congressional intent. Congress asked the insurance industry 5 years 
ago to come up with a solution to the shortfall. Our request is still 
valid, Mr. Speaker, and we can no longer wait for a response.
  We must get to the bottom of this matter by having a congressional 
hearing that lays all of the facts on the table and presents all sides 
of the issue. This legislation will lead to full disclosure of all 
relevant material--and settle what the U.S. Treasury and other tax 
experts agree is the fundamental fairness involved.
  Since May 26, there has been considerable interest in my legislation, 
including national columns supporting the goals of the legislation. The 
national Coalition to Close the Loophole and Put Our Kids First has 
grown to approximately 160 members, and is increasing its efforts on 
many fronts.
  In short, this is an issue which is not going away. Our constituents 
demand our attention to business here in the Nation's Capital. Our 
overwhelming obligation as Representatives is to ensure that all 
entities pay their fair share of taxes. By closing this loophole we can 
fund the programs endorsed by the Hunger Caucus and others without a 
general tax increase.
  Hubert Humphrey challenged us to fulfill the ``moral text of 
government'' which he described as ``how that government treats those 
who are in the dawn of life; those who are in the twilight of life; and 
those who are in the shadows of life.'' Mr. Speaker, we have no greater 
calling before us.

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