[Congressional Record Volume 142, Number 50 (Thursday, April 18, 1996)]
[Senate]
[Pages S3689-S3691]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                A FOND FAREWELL TO AN HISTORIC AIRCRAFT

( Mr. KEMPTHORNE. Mr. President, on April 20, 1996, the last of the 
Idaho Air National Guard's F-4G ``Wild Weasels'' will be retired.
  As we bid farewell to this reliable workhorse that has served this 
Nation well for nearly three decades, let me recognize the historic 
accomplishments of the Wild Weasel and the superb men and women of the 
124th Fighter Group stationed at Gowen Field in Boise, ID, who have 
flown and maintained this remarkable aircraft.
  Since June 1991, the 124th has flown the F-4G Wild Weasel. It is a 
two-seat, twin engine jet that can travel at more than twice the speed 
of sound. Armed with radar and heat seeking missiles as well as 
conventional bombs, the Wild Weasel is often the first aircraft to 
enter combat and the last to leave. Its mission is to find and attack 
enemy radar and missile sites--clearing the path in a hostile 
environment for friendly fighters and bombers to enter enemy airspace.
  When the Wild Weasels first arrived at Gowen Field, the 124th 
converted to the new mission and was combat ready in record time.
  Six months later, these men and women were called on to leave their 
homes, families and jobs to serve their Nation. Without a Presidential 
call-up, these troops volunteered for service and became the first Air 
National Guard unit activated for a combat mission during peace time 
when they were deployed to Saudi Arabia as part of Operation Southern 
Watch.
  The Group was fully integrated into the Air Force Wing deployed to 
the region. They were given day to day mission responsibilities for 
patrolling southern Iraq and escorting coalition aircraft into enemy 
airspace that had proven over time to be a hostile environment.
  As I visited the men and women of the Idaho Guard stationed in Saudi 
Arabia, I saw how effectively the active duty and National Guard forces 
were working together to defend our Nation's interest. I also heard 
British and French pilots state they would not fly over Iraq unless 
they knew the Wild Weasels were also in the sky to protect them against 
surface to air missiles.
  Maj. Gen. Darrell V. Manning praised his men and women for their 
critical role in this international enforcement effort. He said, ``They 
were the only trained organization in place that could perform this 
mission and we had the trained and motivated people required to succeed 
in this critical role.''
  But this success required the support of hundreds of personnel who 
performed their duties to near perfection. The mechanics, refuellers, 
weapons handlers, and every other member of this team--and I mean 
team--contributed to the effectiveness of the 124th Fighter Group.
  The 124th was again called to service in Operation Provide Comfort--
this time to Turkey where they enforced the northern Iraq no-fly zone 
as part of combat-ready patrol along with other United States, British, 
French and Turkish coalition forces.
  In the fall of 1995, the Idaho Air National Guard made Air Force 
history by flying the 50,000th aerial mission in support of Operation 
Provide Comfort II.
  I had the privilege of visiting the 124th Fighter Group in Turkey in 
early October, 1995. Once again I saw a well trained and well 
disciplined group of men and women serving our Nation's interests. I 
also saw the pride that these men and women from Idaho had in their 
venerable aircraft, the Wild Weasel. And while there, I let them know 
their State and country were proud of the 124th's dedication and 
commitment to peace in that troubled region.
  Mr. President, it is clear the men and women of the 124th Fighter 
Group have established themselves as one of the premier Guard units in 
the country. And while I have some parochial pride in making that 
statement, that distinction was hard-earned and well-deserved.
  Based on the Wild Weasel's performance in Saudi Arabia, the Secretary 
of the Air Force came to Boise, ID in December 1993 to honor the 124th 
Fighter Group. Secretary Sheila Widnall and Maj. Gen. Philip G. Killey, 
Director of the Air National Guard, presented the men and women of the 
124th Fighter Group with the Air Force's Outstanding Unit Award for 
their role as the leading edge of force projection during peacetime, 
and the first to assume this new and difficult role for Air Reserve 
forces.
  Mr. President, we all knew the time would come for the Wild Weasel to 
be retired, and with the downsizing of active and reserve units that 
has taken place, there were concerns over future missions for Gowen 
Field.
  As we looked for a new mission for Gowen Field, it was clear the men 
and women of the Idaho Air National Guard had already presented their 
case. The performance of the Wild Weasel was well-documented. The 
dependability of the Idaho Air Guard was second to none. Together, they 
had earned not one, but two new missions to replace the Wild Weasels--
the A-10's and the C-130's.
  And while we say goodbye to this trusted airframe, we know the 
tradition of the Wild Weasel will live on with the men and women of the 
Idaho Air National Guard where the motto is ``First Class or Not At 
All.''
 Mr. MOYNIHAN. Mr. President, the Dole/Roth amendment adopted 
earlier today includes a provision designed to address the problem of 
renunciation of U.S. citizenship by Americans who move abroad in order 
to avoid U.S. taxation. On April 6, 1995, shortly after this issue 
first came to light, I introduced S. 700, a bill to close the loophole 
in the Tax Code that permits expatriates, as they have come to be 
called,

[[Page S3690]]

from evading U.S. taxation. I said here on the floor that the Senate 
would act expeditiously to end this abuse, and would act in a careful 
and judicious manner to do so. The amendment before us today, which 
includes a modification of S. 700, would do just that.
  Although expatriation to avoid taxes occurs infrequently, it is a 
genuine abuse. The Tax Code currently contains provisions, dating back 
to 1966, intended to prevent tax-motivated relinquishment of 
citizenship, but these provisions have proven difficult to enforce and 
are easily evaded. One international tax expert described avoiding them 
as ``child's play.'' Individuals with substantial wealth can, by 
renouncing U.S. citizenship, avoid paying taxes on gains that accrued 
during the period that they acquired their wealth--and while they were 
afforded the many benefits and advantages of U.S. citizenship. 
Moreover, even after renunciation, these individuals are permitted to 
keep residences and reside in the United States for up to 120 days per 
year without incurring U.S. tax obligations. Indeed, certain wealthy 
individuals have renounced their U.S. citizenship and avoided their tax 
obligations while still maintaining their families and homes in the 
United States. They need only take care to avoid being in the United 
States for more than 120 days each year.
  Meanwhile, ordinary Americans who remain citizens continue to pay 
taxes on their gains when assets are sold or when estate taxes become 
due at death.
  I regret to say that the expatriation issue has been the subject of 
more controversy than it probably deserves, so in the interest of 
setting the record straight, I will briefly review the history of its 
consideration in the Congress. On February 6, 1995, the President 
announced a proposal to address expatriation in his fiscal year 1996 
budget submission. Three weeks later, on March 15, 1995, during Finance 
Committee consideration of legislation to restore the health insurance 
deduction for the self-employed, I offered a modified version of the 
administration's expatriation tax provision as an amendment to the 
bill. My amendment would have substituted the expatriation proposal for 
the repeal of minority broadcast tax preferences as a funding source 
for the bill. The amendment failed in the face of united opposition by 
members of the majority on the Committee. The vote against the 
amendment was 11-9.
  Subsequently, Senator Bradley offered the expatriation provision as a 
free-standing amendment, with the revenues it raised to be dedicated to 
deficit reduction. Senator Bradley's amendment passed by voice vote. 
That is how the expatriation tax provision was added to the bill that 
came before the Senate.
  After the Finance Committee reported the bill, but before full Senate 
action and before our conference with the House, the Finance Committee 
held a hearing to review further the issues raised by expatriation. At 
our hearing, we heard criticisms of some technical aspects of the 
provision, as well as testimony raising the issue of whether the 
provision comported with Article 12 of the International Covenant on 
Civil and Political Rights, which the United States ratified in 1992. 
Section 2 of Article 12 states: ``Everyone shall be free to leave any 
country, including his own.''
  Robert F. Turner, a professor of international law at the U.S. Naval 
War College, testified that the expatriation provision was problematic 
under the Covenant because it constituted a legal barrier to the right 
of citizens to leave the United States. The State Department's legal 
experts disagreed, as did two other outside experts who provided 
written opinions to the Committee: Professor Paul B. Stephan III, a 
specialist in both international law and tax law at the University of 
Virginia School of Law; and Mr. Stephen E. Shay, who served as 
International Tax Counsel at the Department of the Treasury in the 
Reagan administration.
  Given this division in authority, it seemed clear that the Senate 
should not act improvidently on the matter. Genuine questions of human 
rights under international law, and the solemn obligations of the 
United States under treaties, had been raised. We therefore sought the 
views of other experts. Opinions concluding that the expatriation 
provision did not violate international law were received from 
Professor Detlev Vagts of Harvard Law School and Professor Andreas F. 
Lowenfeld of New York University School of Law. The State Department 
issued a lengthier analysis supporting the legality of the provision, 
and the American Law Division of the Congressional Research Service 
reached a like conclusion. However, there were dissenting views, most 
notably the powerful opinion of Professor Hurst Hannum of the Fletcher 
School of Law and Diplomacy at Tufts University, who first wrote to me 
on March 24, 1995.
  This is where things stood when the House-Senate conference met on 
March 28, 1995. Although the weight of authority appeared to support 
the validity of the provision under international law, very real 
questions remained. Yet the underlying bill had to move at great speed. 
As my colleagues well know, the legislation restoring the health 
insurance deduction for the self-employed for calendar year 1994 needed 
to be passed and signed into law well in advance of the April 17, 1995 
tax filing deadline, so that self-employed persons would have time to 
prepare and file their 1994 tax returns. The conference committee had 
to decide immediately whether to retain the expatriation provision; 
there was no time for further inquiry into its validity under 
international law. We accordingly chose not to risk making the wrong 
decision with respect to international law and human rights, and so the 
expatriation provision was not included in the conference report. The 
conferees instead adopted a provision directing the Joint Committee on 
Taxation to study the matter and report back.
  This decision, which was the only prudent one at the time, met with 
some not very pleasant criticism in the Senate. This was surprising, 
since I believed it was axiomatic that government should proceed with 
great care when dealing with human rights--particularly the rights of 
persons who are despised. The persons affected by the expatriation 
proposal--millionaires who renounce their citizenship for money--
certainly fall into that category.
  Since that time, a general consensus has developed that the provision 
does not conflict with the obligations of the United States under 
international law. Professor Hannum, after receiving additional and 
more specific information about the expatriation tax, wrote a second 
letter of March 31, 1995 stating that he was now ``convinced that 
neither its intention nor its effect would violate present U.S. 
obligations under international law.''
  In the interim, there has been time to consider other approaches to 
the problem. On June 1, 1995, the Joint Committee on Taxation published 
its report on the tax treatment of expatriation. Shortly thereafter, on 
June 9, 1995, Chairman Archer introduced an expatriation bill that 
adopted a different approach than S. 700, the bill introduced by the 
Senator from New York. The Archer bill, rather than impose a tax on 
accrued gains, would build on the current law approach of taxing only a 
portion of the income of an expatriate received during the 10-year 
period following expatriation. A version very similar to the Archer 
bill was included in House-passed version of the Balanced Budget Act of 
1995.
  We held a second Finance Committee hearing on expatriation on July 
11, 1995 to consider the two competing approaches. Soon thereafter, the 
Senate in the Senate-passed version of the Balanced Budget Act of 1995 
adopted the accrued gains approach from my bill, rather than the House 
alternative, as the superior response to the problem.
  During the conference on the Balanced Budget Act of 1995, the 
conferees opted for the House approach. This was, I believe, a serious 
error. Fortunately, that version did not become law because the 
President vetoed the conference agreement. The conferees on the pending 
bill will be faced with the same choice. The House version of the 
expatriation provision is included in the House-passed companion to the 
Kassebaum-Kennedy bill. We ought not repeat the mistake made in the 
Balanced Budget Act.
  I am convinced that the House approach has serious defects and would 
fail to eliminate the very substantial tax advantages that currently 
accrue

[[Page S3691]]

to those willing to give up their citizenship. Under the House 
proposal, several categories of taxpayers would continue to owe no tax 
at all should the IRS be unable to prove a tax avoidance motive for 
expatriating. As under current law, taxpayers who are patient would 
avoid all tax on accrued gains by simply holding their assets for 10 
years. A wealthy expatriate in need of funds during the 10-year period 
could simply borrow money using his or her assets as security. Since 
the income from foreign assets generally would remain exempt as under 
current law, clever tax practitioners would continue to find ways to 
convert U.S. assets into foreign assets in order to avoid tax on the 
income earned during the 10-year period.

  The House approach also would be destined to fail because it relies 
on the voluntary payment of taxes by people who have moved beyond the 
reach of U.S. courts. In contrast, the Senate version would collect tax 
while the individual is still subject to the taxing power of the United 
States, which is surely a more administrable approach.
  A separate objection to the House bill is that it would unilaterally 
override existing tax treaties. In its report on expatriation, the 
Joint Tax Committee staff stated that the House version may ultimately 
require that as many as 41 of our 45 existing tax treaties be 
renegotiated and that it might be necessary for the United States to 
forego benefits to accomplish renegotiation. This is a serious matter.
  Article VI of our Constitution states:

       . . . [A]ll Treaties made, or which shall be made, under 
     the authority of the United States, shall be the supreme Law 
     of the Land.

  Further, our treaties come into being through a singular exacting 
sequence. Treaties are entered into by the United States with other 
nations either directly or through adherence to a common document. They 
are signed by a member of the executive branch. Thereafter, the Senate 
of the United States must by resolution, two-thirds of the Senators 
present concurring therein, give its advice and consent to 
ratification. This advice and consent having been given--by an 
extraordinary majority--the President then ratifies and confirms the 
treaty in an instrument of ratification. Only at that point shall the 
said treaty become ``the supreme Law of the Land.'' Matters that 
survive this singularly exacting process should not be abrogated 
lightly.
  One final point, of utmost importance. During the time we have taken 
to write this law carefully and well, billionaires have not been 
slipping through the loophole and escaping tax by renouncing their 
citizenship. The President announced the original proposal on February 
6, 1995 and made it effective for taxpayers who initiate a renunciation 
of citizenship on or after that date. This was an entirely appropriate 
way to put an end to an abusive practice under current law. Likewise 
all the proposals considered by the Senate, including my bill S. 700, 
used February 6, 1995 as their effective date. The House conferees on 
the self-employed bill had proposed moving the effective date forward 
to March 15, 1995, the date of Senate Finance Committee action on the 
provision. But the two chairmen of the tax-writing committees 
ultimately--and wisely--resisted that overture, and issued a joint 
statement giving notice that February 6, 1995 would be the effective 
date of any legislation affecting the tax treatment of those who 
relinquish citizenship.
  Now that the Senate has had adequate opportunity to fully explore the 
best way to address the expatriation problem, it is time to act. As the 
first Senator to have introduced legislation to end tax avoidance by 
so-called expatriates, and as one who urged that it be acted upon by 
the Senate expeditiously, I am pleased that the Dole/Roth amendment 
incorporates the expatriation changes I have favored. I hope that the 
conferees will retain the superior Senate expatriation provision, and 
that it will be enacted as soon as possible.

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