[Congressional Record Volume 142, Number 48 (Tuesday, April 16, 1996)]
[House]
[Pages H3456-H3463]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TAXES
The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Ohio [Mr. Chabot] is recognized for 60 minutes.
[[Page H3457]]
Mr. CHABOT. Mr. Speaker, the topic of our special order this evening
is taxes, and periodically, we will likely be joined by some other
principally freshman Members of this House. One of the things that we
all share is that we all believe very firmly that taxes are just far
too high in this country. The American public is overtaxed, and our
Government overspends, and we have to do something about that.
I am 43 years old, and back when I was born, and I was born in the
early 1950's, during that period of time the average American family in
this country sent about 5 percent, 3 to 5 percent to Washington in the
form of taxes.
Here we are 40 years later, and that has gone from 5 percent up to
about 25 percent that Americans send to Washington to cover our Federal
Government's spending. But that is not the whole picture. It is even
worse than that. When you add State taxes, local taxes, city taxes,
county taxes, township taxes, school taxes, sales taxes, real estate
taxes, all the other taxes that we pay as Americans, the average
American family now spends about 40 percent, 40 percent of what it
earns in the form of taxes.
{time} 1800
Another way to look at that 40 percent figure is that if you work
Monday through Friday, you are working Monday and Tuesday for the
Government and only Wednesday, Thursday and Friday are you able to
support your family on the money that you earned. That is far too high,
far too much of a bite out of the taxpayers of this country coming to
the Government.
Another way to look at it is if you work an 8-hour day, about 3 of
those hours are worked for the Government. That is just ridiculous. I
am sure that our Founding Fathers and founding mothers never envisioned
anything like the burden of taxation that we now have on the people of
this Nation.
Wages have gone up somewhat. If we look since 1989, for example,
wages have increased somewhat. However, when we look at the tax burden,
the fact that taxes have gone up, we are at best in this country
treading water. We are trying to stay even. But we are really losing
out on the American dream.
Our parents, I know my parents, envisioned their children doing
better than they did. We all want to advance some in life. The problem
is right now because taxes at all levels of Government, particularly at
the Federal level of Government, have gone up and up and up, the
American dream is being destroyed. Because we are overtaxed, we cannot
keep enough of our own money to support our families, and that
absolutely has to change.
A group called the Tax Foundation, for example, calculates that in
this country we right now pay more in taxes than we do for food,
clothing, or housing, shelter, medical costs. Think of that. Food,
clothing, health care, housing, all those things, we are spending less
for that than we are for taxes. That shows again that we are just
overtaxed in this country.
At this time I have been joined by several of my colleagues. I will
pick up here in a few minutes but I would like to, I believe, start
with the gentleman from Kansas [Mr. Brownback] since he was here first,
and I will at this point yield to a good friend of mine from Kansas
[Mr. Brownback].
Mr. BROWNBACK. I appreciate the work that the gentleman from Ohio
[Mr. Chabot] does in representing Ohio in this great Nation, one of the
big power forces we have had in this new freshman class of things we
have been able to get done. I do not know how many American people
recognize that this freshman class has hit here and people like the
gentleman from Ohio [Mr. Chabot] have gotten things done, sent here to
make Washington smaller, more efficient, work better for the American
people, and it has happened.
One of the things we have not gotten done yet is changing the taxes
and being able to get the tax burden less on the American people. We
have passed it and passed it again, and have been vetoed and sent back
by the President. As the gentleman aptly put forward, the American
people are I think taxed to the max, to the point now that they work
nearly 40 percent of their year just to pay taxes at all levels, and it
is just too much.
I wanted to make another point, if I could, on the issue of taxes. I
have got some words here in front of us that rule our lives, if I could
show these to the American people. I think it will be kind of
interesting to other Members of Congress.
I have got on this page the Declaration of Independence, where we
declared independence from a dictatorial nation that was telling us to
live a different way than what we wanted to, and these are some words
that rule our lives. Within this page is the Declaration of
Independence that talks so much about the freedoms and justice that we
treasure so much as the American people.
I also have with me today the Holy Bible, words that help with our
life as well. I have got the number of words here, 773,000 words
approximately in the Holy Bible. The size of this, Declaration of
Independence, 1,300 words.
I have got to show the Members of Congress the 1940 Tax Code. I
thought we would go back a little ways and we would see the 1940 Tax
Code, and I can still lift this one up. It is 4 volumes, the United
States Code Annotated, Internal Revenue Code of the United States,
1940's Tax Code.
I cannot pick up the current Tax Code of the United States. I guess I
need to be lifting weights better, then I would be able to. The
gentleman from Arizona [Mr. Hayworth] might be able to do this, but it
is a stack about 2\1/2\ feet tall of books. It contains 555 million
words that control our lives.
This is no joke at all. Unfortunately, this is the real thing. This
is just the Tax Code itself, so we can see how much it has grown and
how much it has expanded over a period of from 1940 to what
it presently is today.
The IRS actually sends out 8 billion pages a year in forms and
instructions, which itself would stretch around the world 28 times,
just the words that they send out and the billions of pages.
In 1948 a typical family paid only 3 percent of its income in Federal
taxes, 3 percent. Imagine that. Because today they pay 24 percent, 8
times as great as in 1948. Imagine what an increase in salary and wages
and income we would be giving the American people if we could cut the
Government back even a quarter of the way to where we were in 1948.
According to the Tax Foundation, more than 3 hours of every working
day are dedicated to the Tax Code. That is how long Americans work on
average to pay their taxes. In total, individuals will spend 1.7
billion hours filling out their taxes, responding to this stack of
books here, of rules and laws and words that govern our life.
My point in mentioning all of this, and there is a number of other
facts that move forward with this, is that we have far too much tax
burden on the American people. Average working American people across
this country are working too much for the Government and not enough for
themselves and their own families.
We have got to much manipulation out of Washington, trying to
micromanage our individual economic and personal decisions, trying to
make everybody, I guess, perfect across the country as somebody might
have designed from here. The Tax Code was written by a thousand
different Members of Congress at different times over the eight decades
that we have had an Internal Revenue Code.
I just think it is time we say enough is enough. We have got too much
of a tax burden, it is too complex, it is too much manipulation out of
Washington, and it is time we cut it down to size. It is time we cut
the tax burden, and give the American people a real raise by cutting
their tax burden.
It is time we cut back on manipulation out of Washington and say that
the Tax Code is not for social engineering, it is not for economic
engineering. The Tax Code is for raising revenue for the Federal
Government. It should be done with a lot of change that we are going to
have to get through, and making these sort of changes so the American
people can get the relief that they need to have both in the burden and
the quantity of manipulation they are getting out of Washington.
I see we have been joined by some other colleagues.
Mr. CHABOT. Reclaiming my time, I thank the gentleman from Kansas. I
particularly think it is very interesting the figure you used about 8
billion forms and instructions that go out to taxpayers all over this
country.
[[Page H3458]]
I think one of the interesting figures that I had seen recently was
to put together those forms, we have to cut down 293,000 trees just to
put together these forms that we send out to the American public and I
personally think that we ought to leave a lot more of these trees
standing and cut down the Tax Code substantially. I yield to the
gentleman from Mississippi [Mr. Wicker].
Mr. WICKER. I thank my colleague from Ohio for yielding. I certainly
also want to commend my friend from Kansas for the remarks which he
just made. I certainly hope that he will leave those books there on the
desk. They are a graphic example of the increase in the complexity of
our Tax Code over the past number of years. They translate into
something very, very practical, and, that is, the fact that too much
money is being taken out of household budgets and brought to
Washington, DC, and that is just a very graphic example there.
Yesterday was tax day all across the United States of America, which
was another reminder to American families and American working men and
women of the bite that the Federal Government takes out of household
incomes. But there is another date that is also very, very significant,
and that is May 7, to be exact, May 7, 1996. That is Tax Freedom Day in
the United States of America. That means that the average American has
had to work until May 7 just to pay his obligation for all Federal,
State, and local taxes. Not until May 8, 1996, will the average
American begin working for himself.
This is the latest time during a calendar year that Tax Freedom Day
has occurred. What that means is that the tax burden on Americans is
heavier than it has ever been in the United States of America. I want
to commend our party, the Republican Party, for proposing a solution to
that and proposing to change the direction.
Sometimes I go back home and people say, ``Well, Roger, there's too
much partisan rhetoric on the floor of the House of Representatives,''
and certainly I applaud any effort at bipartisanship, and I also
applaud the efforts of those who have put forward the civility code. I
think we need more of that.
But, Mr. Speaker, there is a reason for the very pitched partisan
debate about the tax issue. And that is this. That there are two very,
very fundamentally different approaches to taxation represented here in
this Capitol building. There is the Democrat approach of 40 years of
increased taxation, increased overreaching into the pocketbooks of
American workers, and we are here now as a Republican majority for the
first time in 40 years to reverse that trend.
The differences at the national level are certainly heightened, I
think, by none other than the President of the United States. Candidate
Clinton ran in 1992 promising a middle-class tax cut. The American
people responded to that plank in then Governor Clinton's platform and
he was elected. Once elected, President Clinton not only abandoned his
pledge for a middle-class tax cut but he gave us the largest tax
increase in history. I note that one of my colleagues yesterday came
onto the House floor and disputed that, saying that actually maybe it
was the largest tax increase in peacetime history.
Regardless of how you do your figures there, it was a whopping
increase of nearly $260 billion, which meant a 4.3 cent per gallon tax
on gasoline which affected farmers, truckers, and people certainly
living in the rural areas of my district in north Mississippi. The
Clinton tax increase involved a 70-percent increase in the amount of
Social Security benefits that can be taxed. I certainly am proud to
stand as one of the Members of this House of Representatives who voted
to reverse that tax and repeal that tax and certainly regret the fact
that President Clinton has stymied us and not allowed that repeal of
that tax to go through. Also small businesses were hit hard. Don't take
my word for it. The National Federation of Independent Business called
the Clinton tax plan about as anti-small business as you could ever
see.
So I would simply point out to my colleagues, Mr. Speaker, that there
are fundamental differences in our approach to this very, very
significant issue. The Republicans in the House of Representatives and
in the Senate stand for lower taxes, tax cuts which not only benefit
families but also which will encourage job creation. And so I thank my
colleague from Ohio for putting together this special order and I look
forward to participating in it this afternoon.
Mr. CHABOT. Reclaiming my time, I thank the gentleman from
Mississippi for sharing his thoughts on taxation. You mentioned the
disparity, the discrepancy between the two parties in this House and I
do not think it could have been plainer than as recently as yesterday.
What we attempted to do in essence was to make it tougher, make it
harder for the Government to raise income taxes on the American people.
Right now we can do it with a simple majority of Congress, taxes can be
raised on the American public and assuming that the President signs the
bill.
What the Republicans in this House tried to do was to make it
tougher, to go up to two-thirds. We tried to pass a constitutional
amendment that would require two-thirds of this House and then two-
thirds of the Senate in order to raise taxes on the American public.
Mr. WICKER. If the gentleman would yield on that point, I think the
gentleman would agree that four out of the last five tax increases
would not have been enacted had that provision been part of the
Constitution when they were voted on.
Mr. CHABOT. Reclaiming my time, I think that is absolutely correct. I
firmly believe that we should make it tougher for Congress to ever
raise taxes again.
{time} 1815
Unfortunately, since it is a constitutional amendment, we needed two-
thirds of this House to pass it. Some 234 Members of this body voted
for it, 177 voted against it. Almost every Republican, there were only
17, I believe, Republicans voted against it. And 200-plus Republicans
voted for the constitutional amendment. There were a relatively small
number of Democrats who joined us on this.
But there are many people in this House, and even though we did not
get it this time, we are going to keep coming back, because we should
definitely make it tougher for this Congress ever to raise taxes on the
American people again.
At this time, I would like to yield to one of the most articulate and
truly one of the leaders of the freshman class, the gentleman from
Arizona, Mr. J.D. Hayworth.
Mr. HAYWORTH. Mr. Speaker, I thank the gentleman from Ohio and the
gentleman from Mississippi and the gentleman from South Carolina for
joining us here to talk about taxation. I thought especially eloquent
was the gentleman who preceded me at this podium, the gentleman from
Kansas. And while he is quite eloquent in his verbiage, I thought the
stack of books that now comprise the Internal Revenue Code, Mr.
Speaker, with those joining us on television this evening and this
afternoon back in my home State of Arizona could see with their own
eyes that huge stack of books in a system that has grown more and more
complicated. I think just as there were volumes upon volumes, that
picture spoke volumes.
The gentleman from Ohio, you mentioned yesterday's proceedings, and I
thought it was interesting what transpired in this Chamber during the
course of the debate. A couple of arguments used and one, quite
candidly, that some Members of the new majority bought into, was this
notion that somehow the Constitution of the United States should not be
amended or amended only sparingly. I just thought it was worth going
back to article 5 of the Constitution, this document of limited and
enumerated powers, to see precisely what is said. Again, I think the
first clause in article 5 lays it out quite simply: The Congress,
whenever two-thirds of both houses shall deem it necessary, shall
propose amendments to this Constitution.
Now, for the accurate historical picture, of course there is one
prohibition dealing with the Government and dealing with a certain year
date, 1808, with reference to some amendments to the Constitution, but
that had to do with the foundation of this very republic and some time-
sensitive matters.
But that is clearly where it is left. You see, our Founders did not
say, now
[[Page H3459]]
we would limit you to a Bill of Rights or to 40 subsequent amendments.
They left no numerical prohibition there. Nor did they feel it was
their place to articulate a procedure that either of these two Houses
in the legislative body would follow.
Indeed, yesterday, Mr. Speaker, it was very interesting to watch
Members of the liberal minority stand up to profess great feeling for
the Constitution, but in reality, to hold higher alleged rules and
customs of this House than the Constitution. To somehow claim, and I
know that I am joined here by friends who work on the Judiciary
Committee who are in their own right juris doctors. And for the purpose
of full disclosure Mr. Speaker, ``J.D.'' in my name does not stand for
juris doctor. It stands for John David. I am not a lawyer, nor have I
played one on television.
But I think it is worth noting that our Founders simply said whenever
two-thirds of both Houses deem it necessary, they gave us the ability
to bring these proposals directly to the floor. And if there were ever
a proposal that we needed to move on, it was the tax limitation
amendment that fell somewhat short last night but is long, long
overdue.
Mr. Speaker, I attempted to offer some perspective during the course
of last night's debate, and indeed I thank the gentleman from Ohio for
allowing me to fulfill a promise, because as I said from that well that
we would have to wait for a special order to articulate this. But a
couple of points worth noting. Those folks who were so reluctant to
amend the Constitution failed to answer the question I proffered last
night. And that was, if a direct personal income tax were such a good
idea, why did the Founders not put it in the original document? They
were strangely silent about that amendment.
But also it is worth noting what transpired in the wake of the 16th
amendment. The Center for Small Business Survival put together a
survey, put together a study, went back and took a look at the original
tax code in 1913, in the wake of the passage of the 16th amendment, and
the numbers were absolutely astounding. If we wre to take the tax code
of 1913 and apply it in 1990's dollars, a single person filing singly,
of course, would be exempt on the first $46,000 of his income. A
married couple filing jointly would be exempt on the first $59,000 of
their income. And most astonishingly, to take the 1913 tax code and
project it into 1990's dollars, 1 percent tax would be levied on the
first $298,000 of earnings. Absolutely astonishing.
How then do we account for the change? How do we account for the
volumes the gentleman from Kansas brought? Quite simply this. The
insatiable desire of this Federal Government to take money from its
citizens, to reach into the pockets of hard-working Americans. If you
need proof, understand this. Adjusting for inflation, according to the
Center for Small Business Survival, even adjusting for inflation, the
cost of the Federal Government from 1913 until the present day has
increased in excess of 13,500 percent. The marginal tax rate on
families has increased some 4,000 percent.
The arguments have been made eloquently here again in this special
order. I commend the gentleman from Ohio. But simply this thought
should be remembered: When the average American family surrenders more
to the Government in taxation than it spends on food, shelter, and
clothing combined, something is fundamentally wrong. We were sent to
this Congress with a basic premise and a basic promise: To let the
hard-working people of the United States of America hand on to more of
their hard-earned money and send less of it to Washington.
Mr. Speaker, I salute my colleagues who join me here tonight. I
salute them also for voting for this tax limitation amendment.
Mr. CHABOT. Mr. Speaker, I thank the gentleman from Arizona.
Reclaiming my time, I would like to at this time recognize, introduce
the gentleman from South Carolina [Mr. Sanford], a very good friend. I
also want to compliment the gentleman from South Carolina on a recent
score he received from one of the groups that ranks Members of
Congress, and that is the National Taxpayers' Union. And what they do
is they go through a very large number of votes and keep track of which
Members are really serious about cutting spending and cutting taxes.
They put all the votes together, and of the 435 Members of the House,
this gentleman was tied for No. 4, I believe, and of the freshman
class, you were tied with lead, coincidently with myself.
But in any event, I want to thank the gentleman and commend you on
that particular score, and let us keep cutting taxes and reducing the
rate of spending in some areas and cutting spending in other areas.
The gentleman from South Carolina [Mr. Sanford].
Mr. SANFORD. Mr. Speaker, I thank the gentleman from Ohio for
yielding the time.
I consider it good company that I had both this evening and on that
particular scoreboard. I do not know if I thank you, though, for
putting me behind J.D. It is always horrible following J.D. J.D., you
are a walking encyclopedia on this stuff, and I admire the almost ever-
growing list of things that you know about on the whole tax matter. I
applaud your efforts there.
I would simply say this. I do not want to beat an old horse, and a
lot of things have been covered as we have talked about taxes, but I
would like to throw in these two cents. That is, we had a town meeting
last Saturday, just prior to everybody sending in their tax returns,
back home in Charleston, and I tried to think about what is it that you
are going to talk about just prior to tax day. I thought about well,
May 7 is Tax Freedom Day. I thought about how the average family sends
almost 40 percent of what they earned off to the Federal, State, or
local government. I thought about how, you know, a hard-working couple
works almost until noon to pay for the total cost of Federal, State,
and local government. But what occurred to me was why in the world
would I be telling them that? Because they know it a whole lot better
than I do. In fact, when I have neighborhood office hours, people come
up to me saying, Mark, do you realize how much we are paying in taxes?
So I did not want to state the redundant, and so I looked. I do not
know if you all have heard, Charles Adams wrote a book entitled ``For
Good and Evil: The Impact of Taxes on The Course of Civilization.'' So
I got out pen and pad and began to work my way through his book. What
he does in his book is he looks through the course of civilization, and
with each different civilization breaks out tax rates.
What was interesting about his study is that if you start, let us
say, with the Egyptians, go all the way back to the Egyptians. You go
back, let us say, 3,000 B.C., to all the way to when they ended, which
I guess was around 476 A.D. And if you look at taxes in their
civilization, what you would find is that on average, they had an
agricultural production tax of about 20 percent. And then during hard
times, this is nothing you would see with the IRS today. But during
hard times, they had what they call philanthropa, wherein the pharaoh
would say, we had a bad year with crops this year, therefore, there
would be no taxes this year. It was rumored that is where the word
``philanthropy'' came from. But roughly around 20 percent.
Then you move to the Greeks. Athens and Sparta had this sort of
military sharing arrangement there with the other city/states to fight
off the Persians, which they did quite successfully. And what was
interesting there was they had an indirect tax, a tax ranging anywhere
from 2 percent to around 10 percent, 10 percent if it was a shipping
channel covered with pirates, 2 percent if it was not. And then around
a 10 percent harvest tax for the city/states. They actually had the
first progressive tax, which they called liturgy, where it was a
voluntary tax for somebody who lived in that city/state who was doing
well, they would come and say, we need this help with x. Would you help
us? And there was a voluntary tax. But roughly again somewhere on the
order of 10 and 15 percent on average.
Then in Rome, you break out the republic versus the empire during the
first part. During the republic, there was very little in the way of
tax because you had a volunteer economy. What you had there is with
their army, every citizen who was a landowner volunteered for the army
for 1 year. That
[[Page H3460]]
spirit of volunteerism, if you want to call it that, was so pervasive
that even the magistrates volunteered. So as a consequence, there was
not a lot in the way of taxes. They had indirect commercial taxes and
custom duties, which ranged from on the order of 2 percent to 5
percent. Unfortunately they had slave auctions back then, which were
roughly another 2 to 5 percent. But those were the two big taxes.
Then as you moved into the empire, taxes began to go up because,
first, they had tribunal, which was a war tax. There was a 5-year
census. Every 5 years they took a census, and then depending on your
wealth, if you were poor, roughly about one-tenth of your wealth was
taxed. If you were wealthy, roughly about 1 percent of your wealth was
taxes. And that tax went off. And if they were successful in their war
effort, there was a rebate with the booty that came with war.
They had a couple other taxes, again a 10-percent harvest tax, a 20-
percent orchard tax, a 5-percent custom tax. And toward the end of the
empire, they actually began to have an inheritance tax of around 5
percent. But again, something just slight of 20 percent on average.
If you looked at the Spanish decline, the Spanish empire and how it
declined, what you found was they had two main taxes there. The second
tax began to get out of whack, if you will. There was a revolt there
with Charles V around 1520 as a result of these taxes because they were
not viewed as fair.
{time} 1830
They almost had an arrangement wherein the legislature was promised a
whole lot of benefits, pensions, et cetera from the king, which worked
fine until the taxes got too high and then there was revolt.
The Swiss have long understood the connection between liberty, taxes,
and democracy, and for that matter all revenue matters essentially come
to vote. An example of that would be, in 1991 a value added tax was
proposed in Canada and passed. The same value added tax was proposed in
Switzerland and failed, in large measure because they could take that
vote straight back to the people.
But what struck me about all this, and you could wander through a
whole lot of empires and civilizations, was that you can only squeeze
so much blood from a turnip. Those numbers happen to fit, in terms of
the study of civilizations and taxes there with his book, fit with OMB
numbers, and they fit with Reader's Digest, which is an unlikely
pairing in my book.
Because with OMB they went back and looked at numbers from 1950 to
present, and what they found was that regardless of which tax rate you
were at, roughly the government share was around 19.8 percent, just shy
of 20 percent. Whether you were in the 70-percent tax rate or the 20-
percent tax rate, as tax rates ratcheted up and down, you could only
squeeze so much blood from a turnip.
People responded to that tax. If the tax was up at 70 percent, sure
enough, the second earner stopped earning. They stayed home more. If it
was down to 20 percent, they went back to work. People responded. So,
first, you can only squeeze so much blood from a turnip; and, second,
this is where Reader's Digest recently did a poll and went out and
asked folks, ``What do you think a fair tax rate would be?''
They asked males, they asked females, they asked whites, blacks, and
people earning below $35,000. They asked people earning above $35,000,
``What would be a fair tax rate?'' Resoundingly, in each of those
different categories people came back with the answer, around 25
percent.
Any yet, as you know, our overall tax burden is closer to 40 percent,
which again says to me two things: First, civilizations must have had
something right throughout time, and the fact that they were at or
below 20 percent on average says to me that we are probably out of
whack. And, second, if Reader's Digest gets it right, maybe they could
pass along the lesson to us here in Congress, in that here we are
bouncing along in the neighborhood of 40 percent. What do their readers
say? Around 25 percent would be fair.
So I just thought that that was interesting to look at that whole
time frame and just say where are we in the grand perspective. Because
when I say tax freedom or I say, do you realize you are paying x,
people already know that.
What was interesting was to look at those numbers and to say, boy, 20
percent seems to be a number that has worked throughout time.
I will yield back. I do not want to take too much of your time.
Mr. CHABOT. I thank the gentleman, and reclaiming my time, I think
the gentleman from South Carolina makes many, many very good points. I
cannot touch on all of them, but I think you cannot squeeze blood out
of a turnip or only so much is right on the mark. That has been one of
the problems with the government, particularly the Federal Government,
is they thought there was just an unlimited ability to squeeze
blood out of the American public. The limit for taxes, just unlimited,
just keep raising them, and we have gone far beyond a level which is
appropriate in this country.
This Congress, particularly on this side of the aisle, we have made
some effort. Before yielding to the gentlewoman from California, I want
to touch on a couple of things that we have done in this Congress thus
far to give the American people a break, to reduce the level of
taxation on particularly working people in this country.
For example, right now a married couple in this country is penalized
for being married. We wanted to eliminate the marriage penalty, and
passed appropriate legislation here in Congress to do that.
Unfortunately, down at the White House it was vetoed. This is
unfortunate because we should not penalize married people. We should
encourage people to be married in this country.
Capital gains relief is another example of tax relief that we tried
to pass this year in this house. Capital gains I think is something
that is very important, because some people think capital gains is just
for rich people. Seventy-three percent of the people who benefit from
capital gains relief earn less than $75,000.
Many senior citizens in their pension plans and their IRA's and other
things benefit from relief. Most importantly, capital gains relief
means that the economy will thrive more. It will mean more jobs for
Americans, more entry level jobs for teenager, for example, so we need
capital gains relief in this country.
The adoption tax credit is something we passed here. The President,
by the way, vetoed the capital gains relief. The adoption credit, we
wanted to give a $500 tax credit to people in this country for adopting
a child. There are many diverse views in this House about the issue of
abortion, a controversial issue. Some are pro-life, some pro-choice,
but I think we all agree that we want to reduce the number of
abortions, and the $500 tax credit or, excuse me, $500 adoption credit
would encourage people to adopt children.
We wanted to give seniors in this country relief. Right now a senior
citizen, once they earn about $11,000 they start losing their Social
Security Benefits. That does not seem fair. Seniors all over this
country have paid into Social Security all their lives. Then they
retire, want to make a little bit of money, and they start losing their
Social Security benefits.
So what we did is, we passed in this House relief which allowed
seniors to go from $11,000 to earning up to about $35,000 over a 7-year
period. It was a gradual increase in the amount that could be earned
before they started to lose their Social Security benefits.
Fortunately, that was one of the things that the President did not
veto, so that was passed, and I am very pleased about that.
The final thing I wanted to mention that we have done in this
Congress thus far is, we wanted to give a $500 tax credit for families
who have children. So if you have two children, that would be a
thousand dollar tax credit, not a deduction but a credit. When you are
raising kids, everybody knows it is an extra burden, and we should give
relief to families across this country.
Now, again, 89 percent of the people that would have benefited from
this would have been people who made less than $75,000, but the
President vetoed it. What we heard was tax cuts for the rich, tax cuts
for the rich. These things were not tax cuts for the rich, they were
tax cuts for hard-working American citizens, and it is time we give the
American public tax relief. I think that is what we are all about.
[[Page H3461]]
At this time I would like to yield to a good friend from California,
a lady who has made many courageous votes in this House thus far in her
career, the gentlewoman from California, Andrea Seastrand.
Mrs. SEASTRAND. Thank you to the gentleman from Ohio. I appreciate
your gathering this time for us to talk about taxes, especially this
day after April 15.
I am very proud to just find out today that I was given a great score
from the National Taxpayer's Union and got an A from them. So I am
pleased to be here.
I noticed one of the preceding colleagues mentioned a townhall
meeting on taxes, and I know there were a number of us that did that
throughout the Nation this past Saturday. I was one. I held a townhall
meeting on taxes in a little town called Paso Robles on the central
coast of California. It went so well that I hope to do, even though it
preceded April 15, I am hoping to do this all through my district,
because the information and the give and take from the constituents
went so well.
I think the thing that I wanted to get across to them was to tell
them that this Congress tried so very much to give them tax relief,
that we are starting to talk about tax reform and had some votes on
reforming taxes, and that we want to give taxpayers rights.
I know a lot has been said about the hours, the dollars that
taxpayers have to spend just to figure out their taxes. We have talked
about the hurdles that many of our taxpayers have to endure to get
their taxes done, and so I am glad that you are talking about some of
the solutions to the problem. I am proud to be part of this 104th
Congress that has looked to solutions.
We had the vote yesterday in trying to get a supermajority to pass
taxes in this House. It is interesting because I come from a State, the
State of California, that does just that. To increase taxes you have to
get two-thirds.
Let me tell you, the liberals in that House howl every time we talk
about the budget because they are down and they want to take it to a
simple majority. They tout how it is better for everybody involved, and
some of the same arguments that I heard on this House floor yesterday
from the liberals that have been in control of this House for 40 years,
and why it was a stupid idea in their estimation to try to even bring
this issue up on the floor. They talked about publicity stunts, and I
should be shameful because I was talking about increasing the number to
a supermajority on this House floor.
Well, I would just say it has worked in my State, and I want to
remind everyone that even if you are a supermajority State such as
California, they still have the opportunity when we are in facing a
dire fiscal situation that, even though I disagreed with that vote
about 5 years ago, they raised taxes in the State of California even
with a supermajority.
So it was a great vote yesterday. We did not have enough people, the
290 votes, to pass a constitutional amendment requiring two-thirds of
this body to increase taxes, but there is another day, another time,
and it is just the beginning of continuing to talk about reform in this
House.
Now, I am glad that my colleague from Ohio just went through the
litany of relief that we tried to give to the taxpayers, those working
families throughout America, those working families in Paso Robles in
my central coast of California. You talked about the $500 per child tax
credit. You talked about the marriage penalty. You talked about your
capital gains relief to create jobs for especially the small businesses
on the central coast of California. I do not have any of those big
corporations in my district.
The tax credit for parents who adopt a child, I know what that is
about because my two children are adopted, and know about what it means
to give tax deductions to children who have elderly parents at home,
and my mom is always worried, concerned about that aspect. And to also
give a tax deduction for the first $2,500 interest on a student loan.
My children have just graduated from college, but we are always
concerned about students, and can they get a tax deduction for their
loans.
All of these issues the gentleman from Ohio pointed out just about
working families. I am one of those freshmen, about half of our class
is under attack by the old guard that have controlled this place for 40
years, particularly those big labor union bosses that sit here in
Washington, DC, and then more or less dictate what their members in my
part of the country will do.
I have been under siege now for a year, since last April, radio ads,
TV ads. You name it, they have done it to me, trying to say that Andrea
Seastrand voted for tax relief for the rich. I keep saying, ``Where?''
I have just read the litany, you read it prior to, and it is
interesting, what we just mentioned, what we are trying to do in this
House, and yet the distortions and the misinformation and downright, I
guess I could say, lies stated about what we have tried to do in this
House to give tax relief to the working families across this Nation.
But you know what I found interesting was that at the townhall
meetings, and Saturday was the 50th townhall meeting I have had since I
have been elected, the first question is what are you going to do about
the Internal Revenue Service. I am telling you, people stand up out of
their chairs and they cheer.
What are we going to do? I tell them I am interested in reforming and
looking to taking that Tax Code and throwing it out as we know it and
looking at something else. Again cheers. So it was no different on
Saturday because people actually sit on the edge of their seat and say,
``What are we going to do?'' What about the flat tax? What about a
national sales tax? What about repealing the 16th amendment, the income
tax as we know it? What about doing away with the Internal Revenue
Service?
So it is exciting to listen to people wanting to start the national
discussion, and I hope that through my townhall meetings we can promote
a national discussion about not only the tax relief that we have done
in this House, but the tax reform that we have begun with our vote
yesterday and the discussion that we have started. Should we do away
with the Tax Code? Should we repeal the 16th amendment? Should we go to
a flat tax or a sales tax?
Now, I think we need to focus on reforming the current income tax,
and just to give you a little thought, the national sales tax would
abolish that need for the IRS because there would no longer be any
income tax.
{time} 1845
Americans would only pay tax on the money they spend so it encourages
savings and investment. Imagine bringing home your paycheck and looking
at the whole thing and then you decide what you would do with your
dollars, what kind of things you would buy. Like the flat tax, it would
be easy to comply with, easy to administer. And there are many that
have advocated that. I have not myself endorsed either the flat tax or
the national sales tax, but I am anxious to continue the discussion
with the American taxpayer as to what they think is the best way to go.
The flat tax has just one rate, treats everyone the same. That is
what proponents of the flat tax say. All the flat tax plans include a
generous family exclusion. There are no special interest loopholes and
the form is a simple postcard, enough to fit it all on one little
postcard, not the numerous forms that we have to look at today.
The National Commission on Economic Growth and Tax Reform appointed
by Speaker Gingrich and Majority Leader Senator Dole concluded on six
principles that should be included on needed tax reform: First, that we
have economic growth through incentives to work, save, and invest;
second, that there is fairness for all taxpayers; third, simplicity so
that anyone can understand the system; fourth, neutrality so that
people and not government can make choices; fifth, visibility, so that
people know the cost of government; and sixth, stability so that people
can plan for the future.
The bottom line is that our current Tax Code is not a good system. It
is time-consuming. It is peppered with loopholes. It discourages
savings. It needs help desperately, and the American people are saying
that they definitely want a fair, simpler, and more equitable Tax Code
and tax system.
So I am glad to be down here and talking with my colleagues that are
[[Page H3462]]
trying to do something about it. I just appreciate you taking this time
etching it out of our busy schedules here in the House so that we can
talk about what is so important, more important than anything else but
the importance to our particular constituents at home and how it is
important that we do something, not only get that tax relief, get that
reform, but also give some good old-fashioned taxpayer rights to the
taxpayers of America.
Mr. CHABOT. I thank the gentlewoman from California. I just want to
compliment the gentlewoman on the may votes that she has taken to give
tax relief to the American people. We need to keep fighting this
battle.
I now would like to yield to the gentleman from South Carolina [Mr.
Graham], a gentleman who has been one of the true leaders in the
freshman class this year and in fact in the Congress as a whole.
Mr. GRAHAM. Mr. Speaker, it has been a great debate to listen to. It
has kind of brought me down here, kind of got my blood stirring.
One thing that was talked about a lot is the two-thirds supermajority
vote requirement to raise taxes. And it has been very well articulated
why you need that. One observation I would like to make, if you took
435 people at random, any town in America, any district in the Union,
and you asked them to vote on this particular measure, the only group I
know of that would have less than a two-thirds agreement is here in
Congress. You could take 435 people in any town in my district and ask
a simple question, should there be a wall between you and the
politician to get in your pocket a little higher than the one that
exists, they would have jumped on it a lot more than two-thirds vote.
It would have probably been unanimous.
Unfortunately, because it was a constitutional amendment, we needed a
two-thirds vote. We were about 30 votes short. The idea is alive and
well and the good thing about this Congress, it has been an historic
Congress. We have not spent much time talking about what we have
accomplished because we have been so busy doing it and ducking rocks
being thrown at us for having done it.
The line-item veto by itself is probably the biggest change in the
last 200 years. The line-item veto allows the President to look over
our shoulder for the first time and look at how we spend money.
This tax debate is a good debate to be having, but it needs to be
linked up with the spending debate that is going on. One thing is for
sure, Americans are going to complain about the umpire and they are
going to complain about taxes. If you go back in time at any time in
the history of our Republic, you will find people complaining about how
much they have to give to the government, I think that is just our
nature. But we always give. We always meet our obligations.
But the question that you must ask now, are people complaining for a
good reason. I think they are complaining for a darn good reason. When
you take money from the American public you should have a game plan in
mind on how to spend it. We collect taxes to provide services at the
national level. Are we providing quality service? Are we spending an
appropriate amount of money, or are we spending too much? Are we doing
too many things at the national level? Should some of those things be
done at home? Should some of those things be done by the private
sector?
That is a great debate that must be joined with the tax debate. I
would suggest to you that the money that we are taking from you is too
much. The average person, black, white, rich, poor, conservative,
liberal, says 25 percent from State, local, Federal taxes is enough
taxation on the American family, and the reality is it is almost 40
percent.
So I would suggest to you that not only does the American public
believe we are taking too much, there is a new group in Congress that
believes we are taking too much. But we are in the minority, but we are
growing. Thanks to the vote in 1994, we have grown a lot. And just hang
in there with us and get enough people up here to do something about
it. We are here talking about it. We need more votes to make it happen.
But the average American believes very sincerely they are having to
pay too much. I agree with them. You agree with them. It is about time
to start delivering. But we take their money. And what do we do with
it? We provide services.
Medicare is a good program. I come from the South where a lot of
people who have worked in the textile industry in years gone by did not
have good pension plans or health care plans. That is getting better.
Medicare was a safety net program for folks that has grown
tremendously. Do you know how much we have increased Medicare spending
since 1980? We have increased it 2200 percent. Welfare, a tremendous
explosion in welfare spending in the last 30 years; $5 trillion have
been spent in the name of compassion. And we have more illegitimate
children, more poor and disadvantaged people than we have ever had.
I would suggest that the Federal Government could get by with less,
that not only are you right when you are saying we take too much from
you, you are right when you believe that Congress does not spend your
money wisely. We can come up with a Medicare system that will take care
of our seniors, that will not grow at 2200 percent every 15 years.
We can provide compassion. We can provide welfare. We can help those
people who are disadvantaged without paying them to have children they
cannot afford. We can help people of alcohol problems without sending
their check to the bar. We can reconfigure this government. We can take
less of your money and do a better job. But you are going to have to
help us. We have got to reinvent systems that are long overdue to be
reinvented, and we can get by on less money. Do not let anyone tell you
otherwise, because it is a complete distortion to say that the Federal
Government is a few billion dollars short.
I thank the gentleman very much.
Mr. CHABOT. Mr. Speaker, I thank the gentleman from South Carolina
for his thoughts on taxation. He also has been a true leader around
here in trying to cut the tax burden on American working people in this
country.
In summarizing where we have been tonight, I would just like to make
a couple of points here. Something that we passed today that I think
was a very good move, something in the right direction, was something
called the Taxpayers Bill of Rights. And in essence what that does is,
if you call the IRS right now, and the IRS gives you bad information,
you are responsible for penalties and interest, even though the IRS
gave you bad information. That sounds ridiculous. It is ludicrous, but
that has been the law.
We passed, however, today a law which basically said that if the IRS
gives you bad information, then you cannot be held responsible for
interest and penalties due to bad information from the IRS.
I think that is a step in the right direction. Congressman Jim
Traficant, who is a Democrat from Ohio, my State, I think has--I am
cosponsor of something I think is a very good piece of legislation. It
basically would put the burden of proof on the IRS rather than on the
taxpayer.
Right now it is supposed to be you are innocent until proven guilty.
But with the IRS, basically you are guilty unless you can prove you are
innocent. This takes the burden off the taxpayer and puts it on the IRS
where it ought to be. Something else that I found kind of interesting
in preparing for this issue this evening was the fact that we have got
6,000 border patrol people in this country, 6,000 people on the border
patrol to protect our borders. We have got 24,000 employees of the FBI,
and we know all the good things that the FBI does for our Nation. So
that is 30,000 employees with border patrol and the FBI. With the IRS,
the IRS has 111,000 employees, almost four times the number of
employees that we have in those other two departments. It really shows
you what our government's priorities have been. I think we need to
change those priorities.
Another thing that is interesting, as we mentioned, April 15 was just
yesterday, taxpayers all across this Nation were trying to figure out
how much they owed to make sure that they paid what they owed; 1.7
billion hours were spent by taxpayers figuring their taxes and the next
figure is really shocking, $140 billion was spent by taxpayers for
attorneys and accountants to figure
[[Page H3463]]
out what their taxes were, time basically wasted figuring out taxes,
$140 billion. I would argue that that time could be much more
productively spent in many other ways.
I had a town meeting, many of the other Members that spoke here this
evening mentioned they had town meetings on the weekend. I had a town
meeting in my district. I represent the 1st district of Ohio, which is
basically most of the city of Cincinnati and some of the western
suburban communities. We had about 125 people at the town meeting.
I started out with a question at the beginning: How many people here
feel that taxes in this country are relatively low and perhaps we could
raise them to balance the budget or do more government programs,
whatever? Not one hand went up.
Then I asked, how many people feel that taxes are about right in this
country? I expected we might get a few hands. We did not get one hand
that said that taxes are anything near what they ought to be. Then I
asked, how many people feel that we are overtaxed in this country, we
need tax relief? And every single hand in that room went up.
These are just regular citizens from my community, the Cincinnati
area, and that is probably true all across this Nation.
We had a couple of groups that were represented there, a group called
TEE. We have had some grass roots groups that just formed in the
community a few years ago. TEE is one. It is Taxed Enough Already.
Brenda Kuhn is the founder of that organization. We have the True Blue
Patriots, Pat Cooksey, founder of that organization that was there, and
also Tom Brinkman, who is the treasurer of a group called CATS,
Citizens Against Taxes and Spending.
So we have actually in my community, in reaction to this high level
of taxes, we have actually had regular men and women, average working
people form groups to try to petition their government to get off their
backs, give them some tax relief. And I think it is time that we did
that.
I want to thank all the Members of the House who came here this
evening to discuss and participate in this topic which could not be
more timely about tax relief. I would like to say finally that I think
it is time that we work together, Democrats and Republicans, and, yes,
the President of the United States, we should all work together to give
tax relief to the American people. It is time we get the job done. Let
us get working on it. Let us relieve the American people of the huge
tax burden that this government has placed on their backs.
Thank you very much for participating this evening.
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