[Congressional Record Volume 143, Number 44 (Tuesday, April 15, 1997)]
[House]
[Pages H1527-H1534]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      TAX RELIEF FOR ALL AMERICANS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 1997, the gentleman from Missouri [Mr. Hulshof] is 
recognized for 60 minutes.
  Mr. HULSHOF. Mr. Speaker, last week the newly elected Members on the 
other side of the aisle held a press event, with the minority leader in 
tow, to complain about the legislative pace of this Congress.
  As the Speaker knows, on this side of the aisle, newly elected 
Members have, since back in February, taken to the floor of this House 
each week that we have been in session to talk about solutions instead 
of pointing out problems. We have been accentuating the positive, 
success stories that are alive and thriving in each of our 
congressional districts across this great Nation.
  We have spoken passionately about ways to renew our communities, how 
government can be a partner rather than as a parent. We have promoted 
efforts to talk about our pro-family agenda and ways to enact 
regulatory relief.
  Tonight, it is no secret, Mr. Speaker, that with millions of 
Americans we train the white hot glare of the spotlight of this House 
onto the Tax Code.
  I have spoken to several constituents by telephone who have been 
supportive and yet have been very angry as they have made their way to 
the post offices across the Ninth Congressional District of Missouri. 
And even as some may be tuned in with pencils worn down and erasers 
worn thin and piles of tax forms and instruction booklets scattered 
about, Mr. Speaker, our message tonight should be one of hope, because 
today on the floor of this House, in this hall, we have a couple of 
victories to pass along to the American people, two victories and a 
minor setback. And, again, we hope to focus on the positive.
  One of those was the House Resolution that was actually introduced by 
another freshman GOP member, a friend and colleague, the gentleman from 
Pennsylvania [Mr. Pitts], expressing a sense of Congress that American 
families deserve some much needed tax relief.
  I see that my friend from New Jersey is in the well of the House. I 
know the gentleman spoke very eloquently earlier today about this 
resolution, and I would yield to my colleague from New Jersey.
  Mr. PAPPAS. Mr. Speaker, I thank the gentleman for yielding, and I 
thank him once again for providing the leadership as president of the 
freshman Republican class, for giving us each the opportunity to come 
to the floor and to talk to each other, but also to the American people 
that are watching, about what we hope to accomplish here as Members of 
Congress.

[[Page H1528]]

  Today, I say to the gentleman, is an important day for all Americans, 
and it is an important day for a good friend of mine, Jim Flannery, an 
accountant, who is also celebrating his birthday today. It is 
particularly unique to have someone in that line of work who has today 
as his birthday.
  Our tax system, our Tax Code, is complex, and I am told, although I 
have not counted, that there are 17,000 pages of IRS laws and 
regulations, approximately 480 IRS forms, and even the instructions to 
the 1040 EZ are 28 pages long. I know the gentleman from Missouri had 
earlier today held that book, that was probably about that thick, of 
the IRS regulations.
  The IRS spent $4 billion on a computer system recently that was 
referred to as the tax system's modernization computer program, $4 
billion, and I am told that it does not work.
  The average American family pays approximately 19 percent of their 
income in Federal taxes, which is significantly higher than the single-
digit percentages just a few decades ago.
  The gentleman is absolutely correct, the resolution that the House 
passed today was, while it was a sense of the Congress, I think it was 
very, very important to demonstrate to the American people that we are 
serious about providing for real significant across-the-board tax 
relief for the American people.
  I am disappointed that the tax limitation amendment, the 
constitutional amendment, failed today, but I am hopeful that, again, 
we can continue to speak about that and that kind of a measure. I 
believe, as most State legislatures in our Nation have adopted that, 
that that would be something that at some point in the not too distant 
future this Congress could address and approve to send to the States 
for their ratification.
  The tax resolution that we passed was, as I recall, passed by a 412 
to zero vote, and the Taxpayer Protection Act was also passed today by 
the same margin, which makes it a crime for IRS employees to snoop in 
people's files.
  A member of my staff said they saw in a newspaper article that the 
actor Tom Cruise had his file snooped in as well. And people, whether 
it is Mr. Cruise or anyone else, certainly deserve the privacy that 
that Taxpayer Protection Act would afford.
  Tax Freedom Day is one that we will be celebrating, which, if I am 
not mistaken, is May 9 this year, 2 days later in the year than it was 
last year.
  Earlier, when we debated the resolution, I had a chart here that 
showed the calendar for 1997 and reflected January 1 to May 9 circled 
in red, each of those days, and that is the amount of time that the 
average American spends working to go pay their taxes, whether it is 
Federal taxes or taxes at lower levels of government.
  People are fed up. And I certainly am looking forward to working with 
the gentleman. I know, as a member of the Committee on Ways and Means, 
the gentleman is intimately involved in reviewing reforms to lower 
taxes for American families.
  A couple of other things that I wanted to mention, and maybe we could 
talk about those a bit, are the number of tax reform measures that many 
of us have introduced in this Congress. I introduced two myself, the 
first one on the first day I served, and we were sworn into office on 
January 7, that would reduce the capital gains tax by 50 percent and 
then seek to eliminate it, phase it out 1 percent a year for the next 
14 years, significantly lower the corporate capital gains tax, and to 
raise the estate tax to a million dollars to help many family-owned 
businesses and farms to be passed from one generation to the next.
  More recently, just a few weeks ago, I introduced H.R. 955, which 
deals with the home office deduction and would, I think, correct what 
has been an inappropriate interpretation by the IRS of the home office 
deduction applicability to allow those that have legitimate home-based 
businesses, that may not see their customers or their patients or their 
clients within their homes, to take that deduction.
  I am very pleased there have been a number of other Members that have 
joined as cosponsors and would encourage those that are here that may 
not have joined as cosponsors to consider doing so.
  Mr. HULSHOF. If the gentleman would allow me to reclaim my time on 
that, during the Easter recess, when we had the opportunity to go back 
to our districts, the gentleman from the Second Congressional District 
of Missouri [Mr. Talent], who is the chairman of the Committee on Small 
Business, held a field hearing and invited me to attend and to 
participate. I found it extremely interesting.

  One of the things he talked about and that we had testimony about was 
just what the gentleman just mentioned, and that is the home office 
deduction.
  We had some women who testified that they were trying to juggle 
family responsibilities and, at the same time, wished to join the work 
force. Several of them had children that were in their teenage years, 
and some who had actually gone on to college, and they had wanted to 
start their own businesses and do it from their home.
  Of course, with modern technology, when we have fax lines and we have 
the copying machines and being able to do so many things over the 
Internet and on the computer systems, they wanted to establish their 
own businesses in their homes so that they could still juggle their 
responsibilities with their families, yet they were fearful to do so 
because, as one of them told us in this field hearing back in St. 
Peters, MO, she was fearful of an audit by the IRS; that she had been 
told by a tax accountant, and probably some very conservative advice 
passed along to her, that this is a red flag. She was told that taking 
a deduction for home office expenses, a percentage of the home that is 
dedicated to business as well as other expenses, that this is like 
waving a red flag in front of an IRS agent.
  So there were many, I believe, who testified that day who had 
qualified deductions but chose not to take those deductions due to fear 
of an ultimate audit.
  The gentleman talked about a couple of facts, that it seemed there 
were a lot of papers and publications on this day, and he talked about 
all the pages and numbers of words.
  I took note of a survey that was recently conducted as to those who 
would prefer having root canal surgery in the dentist office or an IRS 
audit. Forty-seven percent said they favored root canal work, and 40 
percent said an IRS audit. I guess the others were torn between those 
two attractive alternatives.
  I applaud the gentleman for promoting a measure and introducing that 
measure in this House.
  Mr. PAPPAS. I appreciate that, and I wish the gentleman would not 
mention root canal, because I have to have some wisdom teeth removed 
and he has just reminded me about that.
  But getting back to the discussion we are having on home-based 
businesses, I have heard of a statistic that there are over 14 million 
home-based businesses in our country today. Of those that are starting, 
those people that are starting businesses, new businesses, over 70 
percent of them are women.
  There are many families, whether they are single-parent families or 
two-parent families, that would find a home office deduction being 
helpful to them to assist them in raising their children, saving the 
expense, or not having to have the expense of day care, which would 
again give them greater flexibility. I think all of those things are 
critically important.
  I look forward to working with the gentleman and the other members on 
his committee to move legislation such as this, but I think it is 
absolutely critical for our country to have permanent, across-the-board 
tax relief, capital gains tax reduction, not estate tax but it is 
really a death tax.
  There are so many family-owned farms in my district and small 
businesses where there are people, men and women, who have worked their 
lives to be able to pass that business or that farm on to their 
children and just face the likelihood that that will not take place 
because of the tax bill that their kids would see. I view it as a 
family-friendly measure. I view it as an environmental measure.
  There was a rather large farm in the central part of my district. 
Fortunately, we have a farm preservation program in our State, which 
has joined with the counties, and the development rights were purchased 
by the State and the counties to pay to the heir of the farmer, and we 
were able to see that farm preserved.

[[Page H1529]]

  She did not want to see that farm sold for development, nor would her 
parents have wanted to see that take place, but she faced the estate 
tax bill which had to be paid, and she had two options: She had the 
option of selling it for development, which she did not want to do; 
and, fortunately, we have the option of selling the development rights, 
or her selling the development rights, so that farm is now preserved.
  But there are many other people who are not in that position. I 
certainly want to work with the gentleman in doing what I can to see 
that people like that and families like that are given greater options 
and are not penalized for working hard and trying to better themselves, 
the opportunities for themselves and their families.

                              {time}  2145

  Mr. HULSHOF. I appreciate the gentleman's efforts. I know that in a 
special order speech just prior to ours that our more seasoned 
colleagues took to the floor and began the debate, or facilitated the 
debate about having major reform, whether that means going to a 
consumption-based tax or to a flat income tax, and certainly that is a 
debate that we need to bring the American people into with us, to hear 
their ideas and concerns. But I also believe in the short term that we 
need to provide some meaningful tax relief.
  You talk about the home office deduction. I think that is a very 
realistic way, for those that are still perhaps tuning in, Mr. Speaker, 
gnawing on their pencils, wondering about trying to squeeze out those 
last few deductions before the clock strikes midnight and they get 
their forms down to the post office.
  Another I think that has been talked about in this House is a 100 
percent deduction for those individuals who are self-employed who 
purchase health insurance. As it is right now, those that are 
employers, that have a company that purchase health insurance for their 
employees, and certainly we encourage making health care accessible to 
those working men and women, but the fact is that those bosses get to 
deduct as a business deduction the full cost of the premiums that they 
pay to cover their employees. Such is not the case for those that are 
self-employed, and those that are truly seeking the American dream do 
not have the opportunity to take a similar deduction for their own 
health insurance, and I think this is a way to craft some relief in the 
short term that can really make a meaningful difference in the lives of 
those Americans.
  Mr. PAPPAS. Just one concluding point because I know there are other 
Members here who want to participate in this discussion. There 
hopefully are many people around the country that are watching this 
debate as we take part in it. I would encourage them if they have not 
completed their tax returns, that when they do, if they may take a 
moment and just write a note to their Member of Congress or their 
Member of the Senate, and if they agree with you and with me and with 
so many other people that are here to talk about this very important 
issue, I might encourage people to enact the kind of tax reform 
measures that we have been speaking about.
  Mr. HULSHOF. I think, Mr. Speaker, certainly tax burdens for working 
families have reached new heights in recent history. As my friend 
pointed out, the first 120 days of our calendar year we toil and labor 
simply to pay the tax bill. Certainly we need to provide some relief, 
even in the immediate future. But I know there was one measure that we 
did bring up on the floor today that would have provided, I think, a 
more forward vision, Mr. Speaker, as far as future lawmakers who gather 
in this body, to make it more difficult for them to raise taxes on the 
American people. I know that there are many States that have a tax 
limitation constitutional amendment.
  In fact, if I am not mistaken, the State of Arkansas has such a tax 
limitation amendment. I know my friend from Arkansas also spoke very 
forcefully this afternoon during that debate. I would be happy to yield 
to him for what comments he would like to make.
  Mr. HUTCHINSON. I commend the gentleman from Missouri for the 
excellent leadership he has provided, not just the freshman Republican 
class but also a broader range than that, of Members of Congress on 
this tax issue and tax limitation.
  I did want to talk for a moment about the tax limitation amendment 
that received 233 votes in this body today. I was disappointed that it 
did not receive the two-thirds vote necessary in order to refer this 
constitutional amendment to the people of this great country. But it 
did receive 233 votes of the Members of this body. I think that it is 
important that we continue to educate the American public, that we 
continue to talk about this tax limitation amendment, because I believe 
that it is something that is necessary to ward off additional tax 
increases, to make it more difficult to pass tax increases in the 
United States. The tax limitation amendment is very simple, that it 
requires a two-thirds vote of the House and the Senate in order to 
raise taxes.
  I want to say quite frankly that I was reluctant. I think too often 
we go to constitutional amendments to solve our problems. I think they 
should be reserved for serious national problems in which we have a 
framework difficulty with our founding document that we need to adjust. 
I believe that such is the case with the tax limitation amendment. I 
believe we have a serious national problem today that should be 
addressed, and that is why this amendment is necessary.
  Whenever Congress has had the choice of either raising revenues or 
slowing the growth of spending, they have always had to raise revenues 
in order to move forward and not decrease spending.
  I believe that there should be, if there is a fair approach to it. 
Sometimes when you have a budget problem, sometimes you raise revenues, 
sometimes you decrease spending. We do that in our family budgets all 
the time. But the history of Congress is that we have never reduced 
spending. We have never slowed the growth of government. Instead, we 
have always decided that we need to raise the revenues. So Congress has 
historically taxed more and spent more, and I believe this is a serious 
national problem.
  In Arkansas, the average Arkansan pays $7,000 per worker in taxes to 
the government. This might not be much in Washington, D.C., but in 
Arkansas it is a lot of money. It is one-third of the average paycheck.
  And so I think it is a serious problem, as the gentleman pointed out, 
that the Tax Foundation has indicated that we work until May 9 just to 
pay our tax bill, and it is the latest tax freedom day ever. If you 
compare this in history, in 1902, tax freedom day came on January 31. 
This year it is not 31 days into the year, but it is 128 days into the 
year. It is because we have not been able to control taxes.
  There have been a number of arguments that have been proposed that 
say we should not have this tax limitation amendment. One of them is 
that, well, our Founding Fathers never imposed a supermajority 
requirement. Well, that is true that they did not in reference to the 
income taxes, because our Founding Fathers did not have the income tax. 
They simply restrained the Federal Government and said it does not have 
that power, and so it was a power that did not even exist when our 
Founding Fathers wrote the Constitution of the United States. It was in 
1913, in which the people of America adopted the 16th Amendment that 
did give the power to Congress to impose the income tax. Yet we have 
seen it increase consistently and consistently, never going down for a 
long period of time. That is why this two-thirds vote is necessary.
  I think that that amendment was good. I am disappointed that it did 
not get the two-thirds vote. I hope that Congress will readdress it in 
the future.
  Let me just conclude on what I believe is very, very important, and 
that is restoring faith to the American worker, to the American people. 
We have had broken promise after broken promise when it comes to taxes. 
With every broken promise, this Government loses the faith of common 
Americans. Increasingly they see Washington, DC, as a hollow city, 
built upon hollow promises. Shall we in Congress lead for a change and 
accept responsibility for this loss of faith? Or will we, like hollow 
men, offer excuses and then return to the campaign trail in another 
year to yet again promise great things?

[[Page H1530]]

  I know that because of the leadership of people like the gentleman 
from Missouri and the other good Members of this body, that we will not 
do that. Let us be committed to tax reduction, tax relief in the form 
of capital gains tax reduction, reducing the inheritance tax, $500 per 
child tax credit, and we can start to restore the faith of the average 
American. That is what I believe is important on this tax day.
  I thank the gentleman for allowing me this opportunity to address 
this issue.
  Mr. HULSHOF. I thank the gentleman. A couple of points that I would 
like to make, and even ask a question of the gentleman. Does the State 
of Arkansas have such an amendment?
  Mr. HUTCHINSON. We do. Whenever we imposed the income tax in 
Arkansas, we required a supermajority in order to increase it, a 
supermajority of both houses of the general assembly, and so with that 
we have not turned to increasing the income tax. It is very difficult 
to do. It is not impossible to do it. Because it takes a bipartisan 
effort to do it. You have to have a broad base of support to do it. So 
it is not a hurdle that cannot be risen over but it is something that 
slows down tax increases. It has worked well in Arkansas. It has served 
our State well.
  Mr. HULSHOF. I know that at various town hall meetings back in 
Missouri during the district work period that we had some discussions 
about the upcoming vote that we had today on the tax limitation 
amendment. There were some questions about exigent circumstances or 
what about at times of emergency or times of war, and that safety 
feature was in this constitutional amendment had it passed, for exigent 
circumstances such as war or military conflict or situations that would 
require an immediate access to substantial Federal revenues, that that 
could be done by a simple majority vote. Yet again, I also note with 
interest, as the gentleman pointed out, that on this vote, on the tax 
limitation amendment, while it did pass by a simple majority of 233, 
earlier in the day when we had the sense of Congress expressing a 
strong desire that American families deserved tax relief, I think that 
passed unanimously, with well over 400 votes. So if we deduct, then, 
the 400 votes of those Members who believed that the American people 
deserve tax relief and yet only 233, there are about 170 or so that 
were not willing to step up to the plate, if you will, on this issue 
that would have had a very forward vision for the future of our 
country.
  Mr. HUTCHINSON. If the gentleman would yield for just a moment, I 
will elaborate on that. One, we can reach this consensus in Congress on 
areas that there is great unanimity on, on which there is a great 
national interest on. In fact, tomorrow we have what we call suspension 
votes in this Congress, in which you have to have a two-thirds vote to 
suspend the rules and pass the legislation. We do this routinely. 
Tomorrow I believe we have 4 or 5 votes under the suspension calendar 
which will require a two-thirds vote, and we are going to do it. We are 
going to reach that level.
  And so I am confident that this Congress, working together, if there 
was exigent circumstances that we had to increase the revenues of our 
country for a multitude of purposes, that we could do it in a 
bipartisan fashion and get the job done.
  Mr. HULSHOF. In fact, if memory serves me, that earlier because of 
such an emergency situation regarding the safety of airports and the 
fact there was a shortfall in the airport trust fund or the safe harbor 
rule, that there was an extension of the airline fee that was extended 
for another year. If memory serves, that passed by a two-thirds 
majority vote.
  Mr. HUTCHINSON. That is exactly correct. That passed by two-thirds. 
It was done then, and it can be done. And so the argument that a two-
thirds majority requirement, a supermajority requirement for raising 
taxes puts an impossible burden on this Congress to raise taxes is 
really fallacious. I do not think it has merit. I think it is really a 
question of whether you believe that the American people are overtaxed 
or not. I believe, as I know the gentleman does, that they are 
overtaxed. We need to turn back the tide.
  Mr. HULSHOF. I appreciate the gentleman's comments.
  I see that our friend from Colorado, our patriot, has joined us. I 
would be happy to yield to my friend from Colorado.
  Mr. BOB SCHAFFER of Colorado. Good evening. I thank the gentleman 
from Missouri for yielding.
  I am curious if the gentleman recognizes this. Before people get too 
confused, this is the red and white stripes without the stars. I am 
curious whether the gentleman recognizes this. Many people do. I assure 
the gentleman that around the founding days of our country, the British 
understood full well what this banner was. This is the flag of liberty. 
This is the flag that the Sons of Liberty had flown and had organized 
under. The Sons of Liberty, of course, being the ones who initiated the 
Boston Tea Party. I keep this flag in my office as a constant reminder, 
as well as several other things that I will be happy to share with the 
gentleman and others today, reminders that I keep in my office in the 
Fourth Congressional District office of Colorado, across the street, to 
remind me and my staff and all those who enter that office every day 
what our job here is and what the challenges are for the country and 
for the people that we represent, not just in Colorado or Missouri but 
throughout the country as well.
  The Sons of Liberty have been mentioned several times today. In fact, 
some of our colleagues went up to Boston and dumped the entire Tax Code 
into the Boston Harbor. I am going to leave this hanging up here. I 
hope people do not confuse this with our American flag, but let me tell 
the gentleman why recalling the Sons of Liberty and this banner are so 
important today and why I hope that more and more Americans begin to 
identify with the theory behind this, the theme behind the flag of 
liberty, the spirit of the revolution and what caused it to initiate. 
Because I have to tell the gentleman that we as Americans tolerate far 
more than what the colonists tolerated back 220 years ago. The terms 
which launched the Revolution against the British was the Stamp Act, 
the intolerable acts, these acts which, yes, resulted in excessive 
taxation and taxation without representation, but nowhere near the 
extent of confiscation that our tax policy represents today.
  They were in larger colonial cities, they sprang up in American 
communities, they largely opposed the Stamp Act of 1765. They 
circulated patriotic petitions, they harassed British tax officials, 
they denounced British tyranny and organized mass protests against 
increasing British control of the colonies. New York and Boston had the 
largest and most active Sons of Liberty chapters. They celebrated the 
opposition to the Stamp Act, August 14, 1773, they flew this flag over 
the tent where they were meeting. It consisted of 13 stripes, 
alternating red and white, the flag's popular design, of course, before 
and after the Revolution. In fact, as my colleagues can see, this 
largely resembles with the addition of the stars to represent those 
colonies and eventually States, represents our U.S. flag today.

                              {time}  2000

  Again I keep this in my office, I keep this plaque next to it, and I 
invite people to stop by and take a look at that and recall what it is 
that unites us today. You know the clock is running. It is 10 o'clock 
here in Washington, DC, in the eastern time zone; 2 hours left for tax 
filers who have not made it to the post office yet to file their tax 
forms. In the central time zone they have got 3 hours. In the Rocky 
Mountain time zone, where my constituents live, they have 4 hours left. 
And so the clock is ticking, and it reminds me, since we talked about 
early Americans, I want to spend a little bit of time on a personal 
level speaking about some of the early Americans of my family.
  A couple of the other things I keep in my office are pictures of my 
grandparents. Now this is a picture of my Grandma Bednar. She is the 
little one here. She is just a few months old. This is a picture taken 
in her hut that she was born in up in Canada. She was Ukrainian and 
immigrated to the United States several years later with this man here 
who ended up being her husband.
  Now when they came here to the United States the Federal Government 
taxed their family at 3 percent of total income. Now 3 percent, when 
you think

[[Page H1531]]

about that, and this is in fact one of the reasons they came here, for 
the search of liberty and the search of freedom and the opportunity for 
honest hard work and self-determination and self-sufficiency, and they 
achieved that, I have to say. I am very proud of these beginnings, and 
they have an awful lot to do with, I think, why I am here and what I 
think about when I think about America. And I think often about how 
hard they worked, what they created for our country.
  These are the people who are much like your parents, grandparents or 
anybody else in America. They are the ones who built the roads, who 
built the schools, who largely put the face on America as a place where 
we really do look within for internal greatness. In fact they are the 
reason the rest of the world still looks to us today for leadership and 
guidance because of what we represent.
  Now I can contrast what they came to America for, opportunity and 
liberty, taxed at 3 percent of their income in order to pay and fund 
for the Federal Government which they deeply believed in and were 
firmly committed to, and I contrast that with this crew here. These are 
three of my children; I have one more at home. And my family, as most 
American families, as opposed to the 3 percent that Americans paid, in 
family, of their income that they paid in taxes back in the early 
forties, my family pays 40 percent of our total family budget to taxes, 
and I say that as an average American. That is what most Americans who 
have 2 hours left in the eastern time zone pay their taxes, that is 
what they pay.
  I also am reminded in that same Ukrainian heritage; I keep in close 
contact with lots of people who come from Ukraine and have immigrated 
to the United States; there is a man named Ivan Stebelski who lives out 
in Colorado, a very good friend of mine. And one day we were speaking 
about the revolution here in the United States and contrasting that 
with what occurs throughout the rest of the world, why he left Ukraine 
to come to the United States, and we talked about tax policy obviously. 
He mentioned that, and I asked. I said, ``Well, why don't the people in 
these oppressed countries just revolt?'' This is prior to the 
revolution in those countries. ``Why don't they just revolt and stand 
up against the tyranny of their government and oppressive taxation and 
so on?''
  He said something that I remember especially this evening. He said 
that the strategy of the Communists and the Soviets was to keep their 
citizens occupied by standing in line for groceries, for food, to 
comply with the rules and regulations to pay taxes. He said people who 
are spending their time standing in line have no time to make 
revolution.
  And so I think of that vision, and I think of that image and how 
similar that vision is to what most people are going to see tonight 
when they are lined up at the post office to make the Government-
imposed deadline to get their taxes filed in time to avoid any 
penalties of their Government, 40 percent of their family income. And 
let me just put that into real numbers as those are people perhaps 
keeping one eye on their Government tonight and the other eye on their 
tax forms. Americans this year will spend in excess of 5.4 billion 
hours complying with their tax forms, 5.4 billion hours, and along with 
that that 5.4 billion hours compels $200 billion every year in 
compliance costs.
  Now these are not dollars that go to Uncle Sam, come here to 
Washington. These are dollars that go to tax preparers and accountants 
and attorneys of all sorts to help people understand just what these 
tax rules say.
  We are still smarting, frankly, from the last two tax increases of 
the Bush administration and in the Clinton administration as well in 
1990 and 1993, that latter one being the largest in the history of the 
United States. It raised $285 billion, and we are paying for that not 
just in our taxes today, but we pay for that in, as I mentioned, 
compliance costs. We are also paying that in lost jobs, forfeited 
income, lower living standards, anemic economic security, good farmland 
that is taken out of production, on, and on, and on.
  We just cannot afford it anymore, and for anybody who believes that 
we cannot talk about balancing the budget in this Congress and at this 
point in time without a discussion of--without also engaging in a 
discussion of tax cuts, they are just wrong.
  In fact I would suggest that we, as Americans, look back to the 
Kennedy administration, the Reagan administration, two Presidents of 
different parties, different viewpoints politically who proved that, 
when you cut taxes and implement pro-growth economic policies, that you 
in fact earn more revenue, generate more revenue through economic 
productivity to the Federal Government to allow us to put toward the 
task of balancing the budget.
  So we do need spending cuts certainly; there is no denying that, and 
we need to focus on that. But at the same time, and I say 
simultaneously, we need to focus on tax relief as well in an effort not 
just to provide relief but also to stimulate economic growth.
  Our deficit, $5.5 trillion, and I would submit a challenge to anybody 
here tonight to show that our deficit was caused by not taxing enough. 
This policy we have of confiscatory tax policy sapping 40 percent of 
the average family's income tonight, this very night, is the final step 
in that effort, is just unconscionable. It needs a change. I know it is 
something that people in Colorado care very deeply about, and it is the 
primary mission they sent me to accomplish, was to remember the value 
that went behind this flag and what it stands for, the flag of liberty, 
the sons of liberty who flew it proudly, risked their lives, as a 
matter of fact, and, again I submit, for far less than what we are 
willing to tolerate as Americans today.
  We need a rebellion of sorts. We need to use the occasion of April 
15, tax day, to launch small rebellions in every community. Politically 
I am speaking. I am not suggesting people get up in arms again or risk 
their lives directly. We do not need to do that today thanks to those 
grandparents that I mentioned before and others like them, but to 
resolve tonight that they will no longer vote for politicians who go to 
raise taxes in Washington, will no longer vote for elected officials 
who will go to Washington or their State legislature or county 
commissioners or city councils to increase spending and waste and so on 
and to make it a personal point to get politically involved personally, 
not just to vote, but to be angry customers of their Government, to be 
demanding customers, and, when all else fails, to run for office 
themselves. I hope that that is what we are able to inspire here today 
along with the very clear and decisive message that this tax system is 
undeniably broken and it needs to be fixed, and I think we are just the 
people to do it.
  Mr. HULSHOF. I appreciate the gentleman's historical and personal 
perspective and I think put it very well especially the contrast with 
your grandparents and then the future of this country as evidenced by 
your young children.

  The gentleman mentioned that the clock is ticking, and I think 
symbolically the clock is ticking. It is not that Americans are not 
taxed enough, because clearly they are overtaxed. The fact is that 
Washington spends too much and should spend less, which those 
discussions we will get to have in the weeks and months ahead, and I 
appreciate my friend from Colorado.
  And I also see that another son of liberty, if you will, from the 
State of Texas [Mr. Sessions] joins us in this Chamber, and I would be 
happy to yield to Mr. Sessions.
  Mr. SESSIONS. Mr. Speaker, I thank my freshman friend from the State 
of Missouri, Mr. Hulshof.
  It is great to be here. I would like to continue this discussion that 
we are having, and my colleague talked about that we spend too much 
money. It is not just the tax system but that our Government in this 
Congress does not have the discipline in order to rein itself in.
  Our message is plain and simple today, April 15. Our tax system is 
too complex, and taxes are too high, and, as we speak tonight, there 
are those in our country that are struggling tonight to try and finish 
out that IRS tax form to comply with the law.
  And before I begin some formal remarks that I have, I would like to 
talk about this complex Tax Code, and I think that Americans that are 
out there tonight struggling with filling

[[Page H1532]]

out their taxes to comply should know that we in Washington, at least 
freshman Republicans, are trying to do our best to hear them and do 
something about it.
  Those people who fill out their tax forms tonight are not by 
themselves. In 1993 the IRS gave out 8.5 million wrong answers to 
taxpayers who were seeking help with their taxes. In other words, 
someone who was struggling like tonight in those final few hours in 
order to comply, picking up the phone and calling the IRS, or perhaps 
earlier today, the IRS gave out 8.5 million wrong answers to people who 
are trying to comply.
  There are 17,000 pages of IRS laws and regulations, there are 480 
separate IRS tax forms, it requires 136,000 employees at the IRS and 
elsewhere in the Government to administer our tax laws, and it costs 
$13.7 billion by the IRS and other governmental agencies simply to 
enforce and oversee our tax laws. That should tell us that there is a 
problem.
  As a member of the Committee on Government Reform and Oversight, we 
have had testimony from the IRS where they talked about spending $4 
billion, upwards to 6, but $4 billion is what they have told us of 
spending to try and put together a computer system, the big IRS 
computer system in the sky. The bottom line is that they could not do 
it. The reason why, the Tax Code is too complex. If you cannot put 
something and flow chart it and put it in a computer, then you cannot 
make it work.
  Mr. Speaker, what we are dealing with is a tax code that is too 
complex and taxes are too high.
  I would now like to, if I could, enter into some formal remarks that 
I have that I believe will once again bring back the point about what 
we are talking about when we talk about taxes or tax system, balancing 
the budget and certainly our appetite to spend money in this country.
  I believe that the budget, balancing the budget, is all about 
discipline, the discipline to do the right thing, the discipline to 
tell the American people the truth. With annual revenues of the United 
States of over $1.45 trillion, the Government spends more than $1.6 
trillion each year. That means that our Government spent $4.3 billion 
every day, $178 million every hour, and $3 million each minute. But 
more importantly, it means that the President and Congress cannot do 
what American families do every single day, and that is only spend what 
they have.
  This year the President, as is required by law, sent his budget to us 
here in Congress. When he delivered his budget, he told the American 
people and us here in Congress that his budget would be balanced by the 
year 2002. But that is not the truth. We have now learned that the 
President wants to send us and will send us a budget that will not be 
in balance until well after the year 2002. In fact, the Congressional 
Budget Office recently announced that the President's budget will leave 
a $69 billion deficit in the year 2002. Mr. Speaker, the President's 
budget also utilizes gimmicks, accounting gimmicks, that I believe he 
should be ashamed of.
  The bottom line is it is going to require serious and tough decisions 
on spending priorities to balance the budget. The responsible thing 
would be to parcel out spending cuts over a period of time that it will 
take to balance the budget. Instead, the President's budget makes all 
the serious cuts in services to the American people long after he is 
gone.
  That is right. The President is not going to suffer with us, but he 
is going to leave the pain for that person that is in the White House 
while he is back in Arkansas. I do not think that this is leadership.
  This country has a great history of standing up to whatever 
challenges God has sent our way. When we were oppressed, we fought for 
independence against overwhelming odds. When tyranny threatened our 
neighbors, we stood up against it and conquered it twice. When poverty 
sapped our Nation's energy, we rose from it to retain our place as the 
greatest Nation in the world. Today we face similar challenges.
  I would like to, if I could, take us back to just a few weeks ago 
when his excellency President Eduardo Frei of Chile spoke to this 
august body, and he spoke to this joint session of Congress, and he 
gave us a good bit of advice about how Chile is handling their problems 
and their future. He began by saying:
  I want to share with you why we Chileans are ever more satisfied with 
the dividends of freedom, why we do not look back, why we wish we had 
been a part in the new history, the history of mine kind of is now 
beginning to be written. In other words, what he said is we look ahead, 
we do not have to look behind, and I am going to tell you why. Chile 
was in a period of stagnation and suffered many of the budgetary perils 
that exist in the United States today.

                              {time}  2215

  But Chile got the discipline and rose above that. Chile has sustained 
14 years of growth, averaging 7 percent annually. Real annual wages 
have risen over 4 percent each year. Per capita income has doubled in 
Chile in the last decade. Chile's savings rate is now close to 25 
percent.
  All of this has been achieved not in spite of, but as a direct result 
of, and continuing with, 5 consecutive years of balanced budgets and 
fiscal surpluses.
  I listened to President Frei and I was impressed by how he described 
the character of the Chilean people and its leaders. He said, we have 
learned to be patient. Chile does not begin anew with each election, 
but rather, we build on creativity and our work. We are well aware that 
we have a unique historic opportunity to achieve full development in a 
free market of political freedom. We value our achievement, but we give 
equal attention to the challenges that are ahead of us.
  Our President, President Clinton, I do not believe has that same 
belief in the American people. I do not believe that he believes we 
have the same fortitude as the people of Chile. He does not believe 
that the American people have the patience to put our fiscal house in 
order, but I do. I think the American people will rise to this occasion 
as they always have, and I can tell my colleagues that as we stand on 
tax day 1997, talking about freedom, talking about opportunity, talking 
about our families and talking about freedom that can be enjoyed for 
generations, I believe that we can look to a model, another model that 
is in this world, and that is the Chilean government. Free people make 
great decisions.
  Mr. Speaker, I want to fight for freedom, because I think it is the 
thing to do.
  Mr. HULSHOF. Mr. Speaker, I appreciate the gentleman and his 
comments. I also note with interest, as he pointed out, the Internal 
Revenue Service saying the difficulties they have had regarding the 
expenditure of our tax money for the tax system's modernization effort, 
and the gentleman mentioned his committee. I too was serving on the 
Subcommittee on Oversight of our committee, the Committee on Ways and 
Means, and we were examining on that occasion a couple of weeks ago the 
budget that the IRS was wanting us to consider.
  I noted with interest that they made a request for an additional $1 
billion over the next 2 fiscal years for additional capital 
expenditures. Yet, as we talked about, the monies that we have spent, 
and certainly as the clock is ticking and people are actually writing 
checks out tonight to put into an envelope to send to the Internal 
Revenue Service, my question is perhaps we should look to simplify the 
Tax Code rather than to invest additional of our tax monies into 
computer technology.
  Certainly computer technology is needed, but at the same time I think 
we need to look at paring down this very complex and complicated and 
massive Tax Code in an effort to provide some relief. I thank the 
gentleman.
  Mr. SESSIONS. Mr. Speaker, the gentleman has hit upon the key to the 
entire debate and that is, our Tax Code is too complex. We cannot 
expect the IRS to make something pretty of it when it is simply ugly. 
We must have the determination, people who got elected to Congress and 
who gave our word to the American people that we were going to go to 
Washington and do something that would be good for the taxpayer.
  The Tax Code of the United States is the problem. Let us tell the 
truth about it, let us tell the American people. They know they are 
dealing with it

[[Page H1533]]

here. Let us not be afraid to tell the truth. It is a problem and we 
can do better. A flat tax or a consumption tax is far better, and that 
is the direction that we are headed. I hope the American people hear us 
tonight.
  Mr. HULSHOF. Mr. Speaker, I thank the gentleman, and I see that my 
colleague, the gentlewoman from Kentucky [Mrs. Northup] is here.
  While she is making her way to the microphone, there was, Mr. 
Speaker, as you know, some additional good news that we had today. Yes, 
the tax limitation amendment did not pass, but yes, we did pass 
overwhelmingly the sense of Congress to provide tax relief.
  In addition, Mr. Speaker, we passed today the Taxpayer Browsing 
Protection Act, which I think is certainly necessary in light of the 
conversations we have had about this investment in the computer 
technology and equipment for the Internal Revenue Service. We did pass 
today by a two-thirds majority vote a measure that would protect the 
individual taxpayers, that would make it a crime in the Internal 
Revenue Code for an IRS agent or employee to inspect tax return 
information without authorization.
  In addition, this bill mandates that employees that are convicted of 
browsing or, as some have said, snooping or intruding upon our 
confidential information that those employees be dismissed from office 
or discharged from employment.
  The reason that we had this discussion last week, the General 
Accounting Office gave us information that over 1,500 cases of 
unauthorized inspections of taxpayer records occurred between 1994 and 
1995. Even though the agency had implemented a zero tolerance policy, 
it has largely been ineffective and, therefore, this bill hopefully 
will solve that problem. That was a silver lining to this very dark day 
of tax day 1997.
  I see my colleague and friend from Kentucky is here, and I would be 
happy to yield to her.
  Mrs. NORTHUP. Mr. Speaker, I thank my honorable friend from Missouri, 
Mr. Hulshof, for the opportunity to share with my freshman majority 
party colleagues that are talking about taxes and the tax burden that 
so many of our constituents have told us that they have become very 
angry about.
  The truth is, if I had to describe the one issue that is the most 
uniting issue in my district it has become taxes. I really think that 
that is unique to this year. I think that there have been questions 
about taxes, complaints about taxes as long as people have been paying 
them.
  Over the years there have been a variety of concerns, but somewhere 
over the last 4 or 5 years the American public began to believe that 
truly Congress was going to direct their attention to the tax burden 
that we pay and that we were going to address that issue, resolve that 
issue, and find a way to lower their taxes, a variety of their taxes. 
There are particular taxes that are very unpopular in this country.
  As Congress has moved into its third year under the direction of this 
leadership, there seems to be some frustration and some concerns that 
we have not addressed the issue yet. So tonight I would like to take 
this opportunity to make some suggestions about how we might go about 
in a government of bipartisan control, of bipartisan work, to resolve 
the impasse of tax cuts and government spending so that we can truly 
address the questions and the concerns that so many of our constituents 
have.
  First of all, public policy and dealing with public policy is a very 
imperfect world. I think most of us, when we were elected, we came to 
Washington and if we had a perfect world we would wrap up in one tight 
package a spending bill that would substantially reduce spending, and 
we would also reduce taxes for the American people. We would put it 
together in one package, we would send it to the President, and it 
would be passed.
  I think that we could look into the last 2 years of history and know 
that that is a very difficult thing to achieve. In fact, bill after 
bill was vetoed. There never was any agreement, and the issue is so 
big, when we package it all in an omnibus bill, that it is very 
difficult to discuss with the American people all of the ways that we 
are trying to comply with their wishes.
  So maybe we ought to go about, as has been discussed recently, 
separating the issues of the budget and the tax cuts, not because we do 
not believe in both of them and not because we believe that one should 
foreshadow the other, but because we believe both of them on their own 
merit have the support of the American people.
  First of all, let us look at the budget and the budget that we need 
to pass. It is our responsibility to pass a budget and to decrease 
spending. Most people that have run for Congress in the last couple of 
years have said that the Government spends too much money. Then let us 
scour every agency.
  Sitting on the Committee on Appropriations, I can look at the 
agencies that come before me and see the terrible waste, the millions, 
the billions of dollars that are wasted. Mr. Speaker, sometimes we keep 
spending that money because there is the idea that somehow it is there. 
It reminds me as a mother of six children what it would be like to give 
each one of my children a $10 bill to go into a candy store. There 
would be no limit. They would not stop buying until every last cent 
were spent.
  That is what we are doing in government today, but the money is just 
not there. Somebody is sacrificing and paying and writing that check to 
the Federal Government.
  So because we agree the Government is too big, because we believe 
there is too much bureaucracy that is a part of our programs, because 
we believe there are many areas where we could block grant this money 
to States and local governments and have more effective programs that 
better address the problems, because we believe there are obsolete 
programs, because we believe there are overlapping programs that could 
be combined, because we believe there is waste that is costing all of 
our people money, let us go back to the budget with the idea in our 
minds that we are going to eliminate every excessive program, every 
program that can be eliminated, not because we are looking towards tax 
cuts, but because the American people and we believe government is too 
big and that we need to make it smaller, make it more streamlined, make 
it more effective. Let us put those ideas before the American people. 
Let us write them up in a budget, let us send them to the Senate and to 
the President and let us see if he will sign a bill that reflects what 
we are all talking about: smaller government.
  Let us deal with programs that are insolvent and make them solvent. 
People believe Medicare should be solvent. People believe Social 
Security should be solvent. Let us deal with those problems, separate 
from tax cuts, and make those programs solvent, all of those things, 
because they are the right thing to do. The American people are 
clamoring for it.
  At the same time on a parallel track, let us start talking about each 
and every tax cut that have been mentioned to the American people, what 
they are talking about and asking us for.
  Let us talk about the $500 tax credit for families with children. 
That is the most pinched group of people in our society today. They 
have young children. They have not had a time in their life where they 
could save money and build a nest egg. They drive their car all the 
time to get their children to school, to get to work, to get their 
children to the doctors, all of the things, the demands that are on 
young families.
  They are the people that go to work, they pay their taxes, and they 
wait to buy tennis shoes for their children until they have the money 
in the bank. Those are the families that are most concerned about how 
they are going to make it. They are the most frustrated about the fact 
that they get up every day and they go to work and they do all of the 
responsible things, they pay for day care for their children, they pay 
their taxes, and they do not know whether there will be the money to 
take their family on a camping trip this year.

                              {time}  2230

  Let us give them that $500 tax relief. Then let us move to capital 
gains. Let us send that to the President, in every form. We can start 
with the perfect form. If that is not what he wants, then let us move 
to a phase-in, let us move to the different kinds of capital gains tax, 
and let us move to every form that

[[Page H1534]]

hopefully the President will eventually sign.
  Mr. Speaker, I believe that if we put both of these issues separately 
before the American people that there will be strong support for both 
of them, and that we can describe them and communicate with the 
American people in a way that will build the consensus we so badly 
need.
  Mr. HULSHOF. Mr. Speaker, I thank my friend, the gentlewoman from 
Kentucky. I see our time is about to expire.
  Just to conclude very briefly, once again, those of us on the GOP 
side, newly elected Members, it is our goal to end this tax trap. It is 
our goal to help the American people, as we have heard here tonight, 
earn more money, to be able to keep more money so they can do more for 
their families and communities.
  Earlier today a friend of mine on the other side of the aisle said, 
what about the loss of revenue? Mr. Speaker, Washington's loss is the 
American family's gain. We stand committed and ready to achieve that 
measure.

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