[Congressional Record Volume 141, Number 162 (Thursday, October 19, 1995)]
[Senate]
[Pages S15332-S15333]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     WHY AMERICANS NEED TAX REFORM

  Mr. GRAMS. Mr. President, I have been sitting here listening earlier 
tonight to some of my colleagues on the other side of the aisle talking 
about the numbers and problems associated with trying to balance this 
budget over the next 7 years, and while they have been laughing and 
telling jokes, not just tonight, but for the last 30 years, they have 
buried the American taxpayer $5 trillion in debt. It would be funny, 
maybe, if it were not so serious.
  They talk about the Social Security trust fund and that Republicans 
are spending every dime to balance this budget over the next 7 years. 
But what they fail to tell you is that they have endorsed this same 
practice for years. In fact, this year alone, the budget that the 
President of the United States that they passed in 1993 spent every 
dime of the surplus out of the Social Security trust fund, which, by 
the way, under law, can only be invested in U.S. securities, backed by 
the Federal Government. So that money goes to the Treasury, and it has 
been spent by the Congress ahead of us, by the Democratic majority. It 
has been spent away. So when they talk about the Republicans using 
every dime from the Social Security trust fund, they should look at 
their votes in 1993, as their President tried to mask the deficit in 
the budget by using those trust fund dollars.
  In fact, the deficit touted today by this President of $170 billion 
actually is using $68 billion of Social Security trust fund money from 
this year. Otherwise, he would have to report a deficit of about $240 
billion. This Congress has inherited the troubles created over the last 
30 years. It would have been a lot easier, especially politically, if 
we could have just continued this huge giveaway. But it would have been 
at the expense of the next generation. It was time to stand up and look 
this problem in the face and make some of those tough decisions.
  The Democrats talked about the drastic cuts. Just a few moments ago, 
my good friend from Arkansas talked about fewer dollars for education. 
Well, these are the first signs of the problems we are facing today 
because of the last 30 years and the spending spree that this Congress 
has been on.
  The Democrats have pre-spent those dollars that could be used today 
for education, and if we do not get this budget under control today, 
next year those problems are even going to be worse, and we are going 
to be talking about other programs that are not going to have the 
dollars because they are going to pay interest and other expenses.
  So we do have to make some very serious decisions, Mr. President. 
Otherwise, our next generation, and the generation after, are going to 
have to pay for the mistakes we have made, and we should not leave 
them, financially or morally, that way. It is wrong to do that. This is 
the first good attempt to put a balanced budget in place that is going 
to make sure that we do not leave our children with our debts.
  Mr. President, as we begin debating the tax policy, including a $245 
billion tax cut, I believe that the time has come to also begin some 
serious discussions about how best to reform our badly outdated Tax 
Code itself.
  Since 1913, when Congress first gained the power to impose taxes on 
income, the Tax Code has been manipulated and expanded so many times by 
Congress that it has become the greatest barrier between the American 
people and their Government.
  Every segment of society has a reason to complain about the Tax Code. 
For individuals and families, the cost of complying with the Tax Code 
too often becomes the difference between making it in America, and just 
making do.
  I have spoken several times on the Senate floor about a young 
Minnesota family, the Wolstads, who represent the very frustrations 
felt by millions of Americans when it comes to the topic of taxes.
  Natalie Wolstad wrote to me about the enormous tax burden her family 
is forced to bear, a burden she and her husband did not fully 
appreciate until they met 1 day with their realtor, and learned they 
simply could not afford to purchase a new home on their own.
  Countless other Minnesota families have sent me letters sharing 
similar stories of their own.
  They were trying to decide, ``Where are we spending our money 
foolishly?'' When they finally looked at their pay stubs, they were 
seeing how much money was being taken from them in taxes.
  Yes, the Tax Code is tough on families, and it is equally hard on 
America's job providers--small businesses and large.
  When nearly 2,000 entrepreneurs gathered in Washington this summer 
for the third White House Conference on Small Business, they came with 
hundreds of ideas on how to make Government more responsive to the 
people who create the jobs on Main Street.
  Although their suggestions covered an enormous range of concerns, one 
point generated near-universal agreement: something must be done about 
the complex and costly Federal tax system.
  If Congress is truly serious about answering the calls of help from 
the American people and reforming the tax system, there are three 
distinct problems which must be addressed.
  First, taxes are too high. That is something President Clinton 
acknowledged this week, when he admitted that the recordbreaking tax 
increase he pushed through Congress in 1993 was too much for the 
American people.
  Under the headline in the paper ``Tax Rise,'' ``too much,'' President 
Clinton concedes. But he did take time to blame the Republicans for it. 
That is at a time when the Democrats controlled every branch of 
Government--the House, the Senate, and the White House. I welcome the 
President's realization, but I wish it had come before he signed the 
$255 billion tax hike into law.
  The first step toward building a better Tax Code is to look at the 
role of the Federal Government and let the people start keeping more of 
their own money, which they work for.
  After all, it does not belong to the Government in the first place. 
And who 

[[Page S 15333]]
is in a better position to make a family's spending decisions and set 
their financial priorities--Washington, or the family itself?
  Clearly, that responsibility belongs with the family.
  We have the opportunity to take that first step in the next few 
weeks, by passing a $245 billion tax cut which includes the $500 per 
child tax credit I authored and have fought for over the last 3 years.
  I welcome President Clinton's support for tax relief, and urge him to 
join our efforts. By letting taxpayers keep what is rightfully theirs. 
we send a strong message that our efforts to balance the budget will 
always make taxpayers the first priority--not the last.
  The second area we must address when discussing reform of the Tax 
Code is simplification--and simplification must be at the heart of any 
plan Congress considers.
  There is nothing simple about our tax system anymore.
  The IRS manages a library of 437 separate tax forms and mails out 8 
billion pages of tax instructions every year.
  The distinguished House majority leader, Representative Armey of 
Texas, points out that American workers and businesses spent 5.4 
billion hours in 1990 just preparing their taxes--more time than it 
takes to build every car, truck and van manufactured in the United 
States each year.
  This Congress has made shrinkage and simplification its primary 
goals, and there is nothing that needs it more than our current tax 
system.
  Today's Tax Code may be good business for tax lawyers and 
accountants, but it is not good policy for the average American 
taxpayer.
  Tax reform must include tax simplification.
  The final consideration in building a better Tax Code is making it 
fairer and more equitable for the taxpayers. Far too often, the current 
system is not.
  The Government continually manipulates the Tax Code--not just to fund 
Government objectives, but to micromanage the economy and the 
activities of the taxpayers.
  If the Government wants to encourage a particular behavior, it offers 
a tax benefit.
  If it wants to discourage a particular behavior, it sets a tax 
penalty.
  The social engineers have had a field day with the Tax Code. Fairness 
seems to have been left by the wayside, and families are paying the 
price.
  Look how they have been manipulated through the tax system.
  Families, who in 1947 paid just 22 percent of their personal income 
in the form of taxes, today send nearly 50 cents of every dollar they 
earn to Federal, State, or local government.
  As someone who ran for Congress because of high taxes and what they 
are doing to this Nation, I am incensed that middle-class American 
families are being asked to bear the brunt of our enormous tax burden, 
and then listen to some Senators say that we have to increase taxes 
more.
  In fact, families with children are now the lowest income group in 
America--below elderly households, below single persons, below couples 
without children.
  In 1950, the average American family sent $1 out of every $50 it 
earned to Washington--today, the average family sends $1 out of every 
$4 to feed the Federal Government.
  The marriage penalty targets families by taxing them at a higher rate 
than it does single filers.
  And if the dependent exemption had kept up with inflation, it would 
be more than $8,000 today instead of just over $2,000.
  The message we're sending through our tax policy is that families are 
just not as important today as they were in 1950.
  That message must change.
  We have the opportunity and responsibility in this Congress to repair 
the fractured relationship between the Government and its owners--the 
taxpayers.
  It is time we started to talk seriously about cutting taxes, 
simplifying the system, and making it more equitable.
  A recent Forbes magazine cover story called tax reform a ``broad 
political movement, gaining in popularity the way a hurricane gathers 
force as it heads for land.''
  The questions we should be asking ourselves are not will we ever 
break form the past and will we ever have a Tax Code that treats all 
Americans equitably, but rather when.
  Mr. President, the answer to that question is now, and the Senate 
Finance Committee has taken an enormous step toward reaching that goal 
with its $245 billion tax cut package.
  By cutting taxes for families and job-providers, simplifying the way 
those taxes are collected, and ensuring a process that's fair, 
reforming the tax system will go a long way toward making government 
more accountable to the people.
  Washington needs to be reminded that the money it collects is not 
theirs by right--it is collected for use at the will of the taxpayers. 
And Congress needs to be reminded daily that it represents the 
taxpayers.
  The success of our efforts to reform the tax system won't be measured 
solely by how much of their own dollars Congress allows families and 
job providers to keep. It will also be measured by how equitable the 
system is, and how the taxpayers fare under it.
  If we can successfully accomplish all of that, then we will have 
heard the message of last November and delivered on the solemn promises 
we made to the American people.
  Mr. President, it is time that we get behind this effort. It is time 
that we balance the budget and stop passing our deficits on to our 
children and grandchildren.
  Thank you very much. I yield the floor.
  Mr. KYL addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arizona.

                          ____________________