[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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