[Congressional Record Volume 142, Number 18 (Friday, February 9, 1996)]
[Senate]
[Pages S1171-S1172]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      THE TAX LIMITATION AMENDMENT

  Mr. KYL. Mr. President, I wanted to speak briefly this morning on two 
subjects. The first concerns an announcement that the Senator from 
Minnesota, who is presiding as of this moment, and I and Senator Bob 
Smith made yesterday relating to a constitutional amendment proposal 
which we are soon going to be introducing in the Senate, which has 
already been introduced in the House with about 150 cosponsors, which 
we hope will be quickly adopted by both the House and Senate and sent 
to the States for ratification, in reference to a constitutional 
amendment to require a supermajority of two-thirds voting to approve 
any tax increase at the Federal Government level.
  We want to do this because of the possibility, and I hope the 
probability, that some form of simple, single-rate tax reform could be 
adopted sometime after next January. Some proponents call it a flat 
tax. But a tax proposal of the kind that I support would include 
exemptions and certain deductions, so it cannot be properly 
characterized as a pure flat tax, but a simpler tax rate system with a 
limited number of deductions and exemptions is the kind of tax reform 
that most Americans seem very supportive of at this time, and which I 
hope the Congress will adopt.
  If that occurs, it will be doubly important for us to ensure that tax 
rates cannot easily be increased. Because without the deductions, 
credits, and exemptions that taxpayers can take advantage of today to 
shelter their income, if tax rates are increased, once those exemptions 
and deductions and credits have been eliminated from the Tax Code, 
which is what we propose to do, there will be nowhere to go if Congress 
then begins to raise the single tax rate. That is why we think we need 
a constitutional requirement of a two-thirds support for such a tax 
increase in order to protect the taxpayers of America.
  Let me quote from the Kemp report. The Kemp Commission was a 
commission appointed by Senate Majority Leader Robert Dole and House 
Speaker Newt Gingrich to look into the question of fundamental tax 
reform and to make recommendations. It was chaired by former HUD 
Secretary Jack 

[[Page S1172]]
Kemp. Here is what the Kemp report says with regard to this proposal.

       The roller-coaster ride of tax policy in the past few 
     decades has fed citizens' cynicism about the possibility of 
     real, long-term reform, while fueling frustration with 
     Washington. The initial optimism inspired by the low rates of 
     the 1986 Tax Reform Act soured into disillusionment and anger 
     when taxes subsequently were hiked two times in less than 
     seven years. The commission concludes that a two-thirds 
     super-majority vote of Congress will earn Americans' 
     confidence in the longevity, predictability, and stability of 
     any new tax system.

  That is what we hope to achieve by a simpler, fairer, single-rate tax 
system: stability, predictability and longevity. But if Congress can 
quickly raise the rate after we have put such a system into effect, 
then that stability and longevity and predictability will have been 
eroded. That is why we think it is important to make it a little bit 
more difficult for Congress to raise taxes by requiring a two-thirds 
vote.
  Let me note a couple of things about some history here. Since the 
last attempt at comprehensive reform in 1986, when the number of tax 
brackets were reduced from 14 down to 2, there have been 4,000 
amendments to the Tax Code in less than 10 years. The number of tax 
rates, of course, is back up to five. But 4,000 amendments? It is too 
easy to change the Tax Code. Many of those amendments, of course, 
resulted in taxpayers paying more money. Not only have the rules 
changed in the middle of the game for many taxpayers, but for many it 
was after the game was over. The 1993 Clinton tax increase 
retroactively raised taxes, even on the dead.
  The frequency of changes not only makes people more vulnerable to tax 
increases but also makes it virtually impossible to make financial 
plans for the future, whether to save for a child's education or invest 
in your business or set money aside in a pension fund--or hold it to 
pay taxes. If you have to have that possibility, then you cannot 
predict with certainty that you can invest in these more important 
things. So the tax limitation amendment puts an end to that volatility 
by requiring there be sufficient consensus and partisan support around 
the country before taxes will be raised again.
  One final point. To the extent we are interested in reducing the 
power of the special interests, of the lobbyists who come to change the 
Tax Code to get special benefits for their particular interest, to 
reduce their tax burden, to create a loophole, as it were--this two-
thirds majority requirement would really put an end to that kind of 
practice because, if we assume that we want to continue to collect a 
roughly equal amount of revenue and that therefore any proposal would 
have to be revenue neutral, any proposal to create a loophole for a 
special interest and therefore result in less money to the Treasury 
would necessarily require that tax revenues be raised in some other 
area. But to do that would require a two-thirds vote. So I think 
Members of the House and Senate would look much more skeptically at 
proposals to reduce taxes for certain taxpayers if we knew that, in 
order to make up that revenue, we would have to have a two-thirds vote. 
Therefore, I think the influence of special interests would be very 
much reduced.

  The tax limitation amendment represents an important reform whether 
we stay with the existing Tax Code or we go to a new system. But it 
will be particularly important if the American people conclude that a 
single-rate kind of reform is the one that we should adopt, because, 
again, once all of the deductions and exemptions and credits are 
eliminated, taxpayers will be particularly vulnerable to tax rate 
increases. I think we should ensure it is not too easy for Congress to 
raise their taxes again.
  Again, I compliment Senator Bob Smith from New Hampshire and the 
Senator from Minnesota, who is presiding at the moment, for their 
support as original cosponsors of this important constitutional 
amendment.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. LOTT. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Kyl). Without objection, it is so ordered.

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