[Congressional Record Volume 143, Number 44 (Tuesday, April 15, 1997)]
[Senate]
[Pages S3160-S3167]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              TAX DAY 1997

  Mr. BROWNBACK. Mr. President, I appreciate very much the opportunity 
to be able to address the American people on a very difficult day. I 
would like to recognize a couple of things that have been said by 
previous speakers, to start off with.
  I congratulate the President on the reduction of the overall deficit 
that has taken place during the past 4 years, because the deficit has 
gone down. But what I also want to point out to the American people is 
there are a couple of ways of doing this. In the first 2 years of 
President Clinton's time in office, with a Democratic Congress, they 
did it by raising taxes. In the second 2 years, with a Republican 
Congress, we lowered the deficit by cutting spending. Now, you can go 
either way on this; you can raise taxes or cut spending. I happen to 
believe that, in the long term, when you raise taxes, you are going to 
cut your revenues and it is going to make things worse. The point of it 
is, on tax day, we should be talking about the level of taxes; they are 
too high in this country. The way to reduce the deficit is by cutting 
spending. That is not the way it was done in the first 2 years--by 
raising taxes.
  The second thing I would like to respond to that has been raised by 
the other side of the aisle is capital gains taxes. That certainly 
needs to be cut, along with some others, and along with a $500 per 
child tax credit for working and struggling families.
  I find it interesting that, as we look forward to working with the 
issue of Washington, DC, the District of Columbia, and rejuvenating the 
District of Columbia, a metro area that has great difficulties in this 
country, one that we have had a lot of problems with which are well 
known to this Nation--do you know what the other side of the aisle is 
proposing to rejuvenate Washington, DC? What Eleanor Holmes Norton, 
along with Jack Kemp, is supporting to rejuvenate Washington, DC? They 
are proposing a zero capital gains tax rate on real property. Both the 
left and the progrowth ring on the right in this Congress are proposing 
zero capital gains for Washington, DC. Why would they do that? If this 
is such a bad thing to do, why are we doing it to Washington, DC? 
Because they know it will stimulate growth, hope, and opportunity. That 
is being put forth by Eleanor Holmes Norton and Jack Kemp.
  These are things that I think people have to realize. When you make 
those sorts of cuts, it stimulates the growth overall taking place in 
the economy. Now, the month of April--particularly April 15--I think 
serves as a powerful reminder of the size and scope of the Federal 
Government. Even though America will pay its taxes today, Americans 
will not be freed from taxation. They will not experience tax freedom 
day until May 9. Last year, it was May 7. This year, it goes up 2 more 
days, and it won't be until May 9. In other words, on May 9, ladies and 
gentlemen, you finally start working for yourself instead of the 
Government. Up until May 9, you are effectively working for the 
Government, paying your taxes to carry this huge, large Federal 
Government that is too big.
  The issue is not that we should raise taxes to balance the budget; 
the issue is, we should cut taxes and cut the size, the scope, and the 
intrusiveness of the Federal Government to liberate the American 
people.
  Today, a family of four must send both parents into the workplace to 
provide for the same standard of living that was once provided by only 
one parent. Is that a way to support the family across America, that we 
have to have both parents going out and working just to support the 
family? Is that a way to have strong families across the country? I 
don't think it is.
  Unfortunately, even with both parents working, our families are still 
often unable to get ahead. Living paycheck to paycheck has been the 
norm for American families for as long as our Federal Government has 
grown as large as it as, consuming more and more.
  Taxes hurt America's families. They punish good investment, they 
stifle entrepreneurial activity, and they hamper true economic growth. 
That is why I support a tax limitation amendment and insist that any 
budget deal must provide for meaningful tax relief.
  Balancing the budget and cutting taxes are not mutually exclusive 
goals, as some would have you believe. In fact, balancing America's 
budget virtually requires that we cut taxes. In the long run, it will 
be more difficult to balance the budget if we do not shrink the size of 
our Federal Government with significant tax cuts. And what we are doing 
today is happening across this country. We have a good economy that is 
growing strong. We are having an economy that is producing more 
revenues coming into the Federal Government. We need that to continue 
to take place if we are going to be able to balance the budget. You 
need to have growth taking place in the economy. That is the critical 
nature of cutting taxes. It continues to stimulate growth so we can 
have those revenues coming in and balance the budget, and it is not 
enough to just balance the budget.
  As my good colleague from South Carolina has pointed out, we need to 
start paying the debt down so that interest levels can go down.
  The tax limitation amendment is a simple amendment requiring a 
supermajority in both Houses in order to raise taxes; in other words, 
more than a majority. You have to have a supermajority. And we should 
do that so that we don't just shift this Government from being debt 
financed to being tax financed. We need to be able to, overall, force 
the Government to be smaller and to live within its means instead of 
taking more of those means from hard-working American families.

[[Page S3161]]

  Later today the House will vote on the tax limitation amendment. I 
believe this vote will send a strong message to the American people 
that the Republicans in the House are committed to truly reducing the 
tax burden in America. The Senate had an opportunity to unify with the 
House and show their support for this amendment but balked at the 
opportunity late last week. I think that is an unfortunate reality that 
too many people lack the wherewithal to stand up to the tax-and-
spending regimes of this Government and say no--just say no--to future 
tax increases.
  Because Congress has lacked the will in the past on both sides of the 
aisle to stand up to a flawed Keynesian economic principle that our 
Government has used in its fiscal policy, that has hurt economic growth 
and that has hurt our families.
  I think what we have to do clearly in the future is we just have to 
stand up and say no to more big Government programs, to put policies in 
place that reduce that tax burden, that release the American people, 
their opportunities, their entrepreneurial spirit, and their families 
to grow and to prosper. Government must be cut. Taxes must be cut.
  Mr. President, I want to quote the President of the United States 
who, a couple of years ago, made a very clear statement to the American 
people. It was resonating very clearly, which the American people 
wanted to believe. But they know it is just not true yet. And it may 
end up being the signature statement of this President. ``The era of 
big Government is over.'' Well, the era of big Government unfortunately 
is only over in rhetoric. In practice, it remains, and more is even 
being proposed by the President.
  To end the era of big Government, we must end the era of big taxes 
and a big Tax Code. I want to point out to you, Mr. President, and 
others about the size of the Tax Code. This is something that Steve 
Forbes has made us familiar with. But I think it is pretty good on a 
graphic.
  Just look at the words that govern our lives and the important 
documents that have taken place. You can see that they do not 
necessarily have to be documents with a lot of words to have a great 
deal of meaning. The Declaration of Independence--1,300 words--which 
declared our independence and more vision of a National Government.
  The Holy Bible--773,000 words are in this document that so many 
people read and go to with reverence.
  The U.S. Tax Code--this is just the code; this is not the regulations 
that underpin the code that direct all of our lives. But the Tax Code 
itself is 2.8 million words. If you add the regulations to it that go 
forward with setting out what this code actually means and interpreting 
it, we are up to 10 million words governing our lives.

  The truth of the matter is, on the Tax Code, not only are taxes too 
high, but the code is so intrusive anymore that it is more about trying 
to cause you to do something or your business not to do something 
rather than being about raising revenue for the Federal Government. The 
Tax Code is about social engineering out of Washington instead of about 
what it raises for the Federal Government. You can see that, just by 
the sheer number of words and the volume of words that are involved in 
the Tax Code.
  Mr. President, April 15 is a tough day for a lot of Americans, and 
people aren't to happy about it. They should not be, because their 
level of taxes are too high.
  I have had people call in on radio call-in shows. I had one in 
Saline, KS, that was so memorable to me. A gentleman called in and he 
said, ``You know, Mr. Brownback, I believe in serving my country. I 
have done everything I could to serve my country. I served in the 
military. I am married. I have two children. I am doing everything I 
can to work hard. But let me tell you, you guys are just taxing me out 
of my family's existence. I can't continue to support my family off of 
what you are taking for taxes. I believe in America and I believe in 
this country. But I just can't keep carrying this burden. It is too 
heavy. It is too much. Can you lift it off of me?''
  If we will help that man in Saline, KS, he will not only start 
working harder and earning more and taking care of that family better, 
which is at the core of the cultural renewal that we need to take place 
in the family, but he is going to be even more of a patriot if we just 
release him a little bit instead of requiring him to work until May 9 
just to pay his taxes. Let's let him work a little bit more to raise 
his family.
  This day should focus on tax policies, on the failings of tax 
policies across the United States, on what its impact is, and on the 
theory that if you tax something, you get less of it, and if you 
subsidize something, you get more of it.
  We have too much tax which is hurting too many people. It is hurting 
us in growth. It is hurting families. It is hurting us in the 
opportunity to create an era after era of big Government. And an era 
after the era of big Government, I think, is one of an unlimited 
America. But it is one in which we have to reduce the tax monster to be 
able to get to that.
  I am happy to be able to speak about the issue of tax freedom which 
is not with us yet. But it is a day I hope people will recognize the 
importance of--of what tax policy has done, how much needs to be 
changed, and how we need to limit taxation taking place in this Nation.
  I yield the floor.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Enzi). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DOMENICI. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. Mr. President, parliamentary inquiry? Is there an order 
for people to speak at this point?
  The PRESIDING OFFICER. The majority controls the next 46 minutes.
  Mr. DOMENICI. I see Senator Kyl. Did he plan to speak next?
  Mr. KYL. I am ready.
  Mr. DOMENICI. I have not spoken yet. How long would he speak?
  Mr. KYL. Five minutes.
  Mr. DOMENICI. Could I yield the floor, the Senator from Arizona 
speaks for 5 minutes, and then I could be recognized for about 7 
minutes?
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Arizona.
  Mr. KYL. Thank you.
  Mr. President, first let me thank the distinguished chairman of the 
Budget Committee. I am glad I don't have to follow his remarks. So I am 
pleased to speak before he does.
  Mr. President, T.S. Eliot once wrote that ``April is the cruelest 
month.'' Of course, he was referring to the change of seasons--of 
``mixing memory with desire.'' Millions of Americans would probably 
agree with Eliot about April being the cruelest month, but for a far 
different reason. It is, of course, on April 15 that income taxes are 
due.
  By midnight tonight, millions of Americans will have finally 
completed their income tax returns. According to estimates by the 
Internal Revenue Service, Americans will have spent 5.4 billion hours 
on tax-related paperwork. The Tax Foundation estimates that the cost of 
compliance will approach $200 billion.
  If that is not evidence that our Tax Code is one of the most 
inefficient and wasteful ever created, I do not know what is. Money and 
effort that could have been put to productive use solving problems in 
our communities, putting Americans to work, putting food on the table, 
or investing in the Nation's future are instead devoted to tax 
preparation. And that is a waste.
  It is no wonder that the American people are frustrated and angry, 
and that they are demanding real change in the way their Government 
taxes and spends.
  Mr. President, the House of Representatives is today considering a 
proposed constitutional amendment that represents the first step in the 
direction of the kind of fundamental tax reform the American people 
have been demanding--it would require a two-thirds majority vote of the 
House and Senate to approve tax increases. Why do I say that it is the 
kind of reform the people are demanding? Because a third of the 
Nation's population has now imposed such limits on their State 
governments, and voters have approved tax limits by wide margins. In 
Arizona, for example, tax limitation passed with

[[Page S3162]]

72 percent of the vote. In Florida, it passed with 69.2 percent of the 
vote; in Nevada, with 70 percent.
  The tax limitation amendment, which I introduced in January, now has 
22 Senate cosponsors. It is something that was recommended by the 
National Commission on Economic Growth and Tax Reform. The commission, 
chaired by former HUD Secretary Jack Kemp, advocated a supermajority 
requirement in its report on how to achieve a simpler, single-rate tax 
to replace the existing maze of tax rates, deductions, exemptions, and 
credits that makes up the Federal income tax as we know it today.
  Here are the words of the Commission:

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

  Mr. President, tax reform cannot succeed without a supermajority 
requirement for raising taxes. In the decade since the last attempt at 
comprehensive tax reform, Congress and the President have made more 
than 4,000 amendments to the Tax Code. Four thousand amendments. The 
constant changes have left taxpayers perplexed, unsure how to 
comply today, let alone how to prepare financially for the future. 
Without the protection of the tax limitation amendment, taxpayers will 
be vulnerable to further tax-rate increases, particularly if tax 
reform--which we all hope will occur within the next few years--
eliminates many of the tax deductions, exemptions, and credits in which 
they find refuge today.

  Let me make a few other points about this amendment. First, the tax 
limitation amendment itself cuts no taxes. It does not preclude 
Congress from raising taxes in the future. It only raises the bar on 
future tax increases.
  Many people, myself included, believe that taxes are already far too 
high, and that we ought to cut taxes. This amendment does not do that. 
All it says, in effect, is ``enough is enough.'' It makes Congress find 
a way to meet its obligations without taking even more from the pockets 
of the American people.
  Mr. President, here are some astonishing statistics from Americans 
for Tax Reform. According to the organization's calculations, about 31 
percent of the cost of a loaf of bread is attributable to taxes. About 
54 percent of the cost of a gallon of gas goes to taxes. About 40 
percent of the cost of an airline ticket is attributable to taxes, as 
is 43 percent of the cost of a hotel room.
  Understand that on an aggregate basis, the average family pays more 
in taxes than it does on food, clothing, and shelter combined. 
According to the Tax Foundation, Federal taxes amount to about 27 
percent of the family's budget, and State and local taxes consume 
another 12 percent--for a total of almost 39 percent. But spending on 
food, clothing, and shelter totals only about 28 percent of the family 
budget. And families still have to find a way to pay for everything 
else they need--for example, medical care, transportation, education, 
and an occasional vacation or dinner out--out of the meager amount that 
is left after taxes.
  So what the tax limitation amendment says is that Government already 
takes far too much from hard-working Americans and should at the very 
least take no more, unless there is a very broad and bipartisan 
consensus in Congress and around the country.
  A second point. There is no small irony in the fact that it would 
have taken a two-thirds majority vote of the House and Senate to 
overcome President Clinton's veto and enact the 1995 Balanced Budget 
Act with its tax relief provisions. By contrast, the President's 
record-setting tax increase in 1993 was enacted with only a simple 
majority--and not even a majority of elected Senators, at that. Vice 
President Gore broke a tie vote of 50 to 50 to secure passage of the 
tax-increase bill in the Senate.
  The tax limitation amendment is based upon a simple premise--that it 
ought to be at least as hard to raise people's taxes as it is to cut 
them. What the tax limitation amendment seeks to do is force members of 
Congress to think of tax increases, not as a first resort, but as a 
last resort.
  Mr. President, I hope the House will pass the tax limitation 
amendment today. And if it does, I hope the Senate will take it up 
promptly and give the States an opportunity to consider its 
ratification. While there is much disagreement about whether to cut 
taxes and how, we should at least be able to agree that we should not 
raise taxes any further. I urge support for the tax limitation 
amendment.
  I hope we will be able to pass that amendment, and I hope we will 
have an opportunity thereby to ensure that more money is left in the 
pockets of hard-working American families rather than being sent to the 
Federal Government here in Washington.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. Under the previous order, the Senator from New 
Mexico is recognized for up to 10 minutes.
  Mr. DOMENICI. Mr. President, I compliment the distinguished Senator 
from Arizona, Senator Kyl, for his devotion and dedication to doing 
something about the tax mess in America. I look forward to supporting 
many of his ideas here on the floor.
  Mr. President, I thought today I would speak just a few moments about 
the history of the income tax law in this Nation, and see if we can't 
all agree without equivocation that something has really gone awry.
  On October 13, 1913, President Woodrow Wilson signed the bill 
enacting the income tax law under the authority of the 16th amendment 
to the Constitution of the United States--October 13, 1913. The entire 
law was 14 pages long. Slightly more than 1 percent of the population 
had incomes large enough to be subject to the new tax.
  The New York Herald predicted that many new taxpayers would proudly 
display their income tax receipts as evidence of the fact ``that their 
value and standing in the commercial world was worthwhile.'' So people 
were pleased to pay their taxes and held up their receipts to indicate 
that they had accomplished something meaningful in the United States, 
they had gotten somewhere.
  According to the Treasury Historical Association, when the first 
income tax was due--listen to this--throngs of new taxpayers crowded 
the IRS offices to pay and some of them were glad to be there. There 
are throngs at the post office today mailing in their tax forms. I 
daresay few are glad to be there.
  At the time of the enactment, Representative Cordell Hull, the 
chairman of the Ways and Means Committee, labeled the income tax ``the 
fairest, most equitable system of taxation that has been devised.''
  Amazingly, most Americans actually agreed and welcomed the tax. 
Perhaps those statements were true in 1913, I say to our new Senator 
from Arkansas in the Chamber, but in 1997 they no longer reflect 
reality.
  The current code is neither fair, equitable, efficient, nor loved. It 
adds one-third to the cost of capital. Capital which makes a modern 
economy grow and prosper is encumbered by the antigrowth ingredients of 
this Tax Code such that capital has had added to its cost one-third--in 
other words, one-third is wasted because of the nature of our tax laws. 
It is hostile toward savings. It is tilted toward debt. Thus, it slows 
economic growth, prevents jobs from being created, and makes us less 
competitive in world markets.
  The Tax Foundation estimates that complying with the Federal tax 
system of the United States will cost the American people--I am not 
talking about paying the tax. The cost, the waste, the money, the 
energy--$225 billion in 1996.
  Based on historical data from the IRS and the OMB--that is the Office 
of Management and Budget--taxpayers will spend 5.3 billion hours 
complying with the Federal tax laws.
  Since 1954, the number of sections dealing with this have increased 
dramatically. Determination of tax liability has grown 1,000 percent; 
deferred compensation, 1,400 percent; computation of taxable income, 
1,500 percent. Since 1954, there have been 31 major tax bills enacted, 
more than 400 public laws that have amended the Internal Revenue Code.

[[Page S3163]]

  Two-thirds of the compliance burden is borne by the business sector. 
Because of the marriage penalty built throughout this code--speak of 
something that is antifamily. I would assume if you have a policy that 
is antimarriage it cannot be, by definition, very profamily--most 
working spouses work primarily to pay taxes rather than to improve the 
standard of living of the family.
  Congress will be dealing with tax cuts if we arrive at a budget 
agreement, and that is good because it is obvious the tax take for the 
United States, the amount of revenue we are getting from taxes, 
continues to rise. But I believe ultimately the country is not going to 
be as well off as it should be until we do a comprehensive tax reform. 
We have put together, Senator Nunn and I and many Senators and many 
people helping, an entire new tax plan. When time comes for reform, it 
will be on the table. This Congress Senator Dodd has agreed to carry on 
the work of Sentator Nunn.
  We call it the USA Tax Plan--Unlimited Savings Allowance. For those 
who think IRA's are great investment vehicles we ought to be using, I 
agree, but this is an unlimited IRA tax plan because essentially people 
will pay taxes only on income they spend. Amounts they save or invest 
will not be taxed until they take it from the savings pool of the 
Nation, an investment pool of the Nation, and spend it. The tax would 
be deferred, in other words, until it is consumed and has become income 
that is being spent.

  There is talk about tax credits and deductions for education 
purposes. This USA tax recognizes those needs and takes care of that. 
It provides a tax credit not for some taxpayers but for all, all 
families facing higher education expenses. This plan recognizes 
investment in capital should be expensed by the business community. It 
provides a deduction from taxable income in the year that the 
investment is made instead of requiring installment deductions called 
depreciation, which I assume is the major argument between the business 
community, business people, and the IRS.
  This plan which I am speaking of today, with its unlimited deferral, 
results in a capital gains tax rate of zero so long as the proceeds 
remain invested. When they are no longer invested and they are being 
spent, they are listed as income and subject to taxes.
  The President and Republicans want to provide a $500 tax credit for 
children, recognizing that family budgets are stretched most when there 
are children in the family. I should say the President wants to do 
this, although with less money. And the age that this stops vesting is 
lower in the President's proposal. Nonetheless, they both recognize 
that families, income tax payers are most stretched when there are 
members of the family under this code.
  The USA tax proposal includes a family living allowance, in addition, 
to the dependent deduction. It does not phase out when a child reaches 
13. It goes on until the child reaches adulthood.
  Taken together, these two USA tax provisions provide relief 
equivalent to what the dependent deduction would have been if it kept 
up with inflation since the time it was first enacted.
  So let me suggest that while we are all talking about tax cuts, and I 
hope I have given a bit of the history that should shock us into 
understanding that something basically is very wrong.
  Our current Tax Code is sapping the strength of this country, it is 
sapping the entrepreneurial spirit of people. This country will be 
great when the entrepreneurial spirit, when innovation and risk taking 
is maximized. Unfortunately, we have a code that does the opposite, 
obviously, and we ought to get rid of it.
  For now, we are scheduled this year for some tax cuts. I have 
outlined them heretofore, and the Finance Committee chairman and others 
have announced them, and the President has his set of proposals. But I 
do not think we should let today go by without saying that tinckering 
is not enough.
  What we must do is throw out what we have and do a new one for the 
American people, for growth, prosperity, and peace of mind for the 
American people.
  I yield the floor.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Missouri.
  Mr. BOND. Mr. President, let me thank the Senator from Tennessee, who 
is next in line and allowed me to go first.
  I commend my distinguished colleague from New Mexico for his great 
leadership on this issue. He has within his hands the needed mechanism 
to get to tax relief, and that is what I want to address very briefly 
here today.
  I follow up his point about the cost of the complexity of today's Tax 
Code by saying we in the Small Business Committee have figures 
indicating that computing taxes, figuring out taxes, takes 5 percent of 
the revenues of small business. That is not paying the taxes. That is 
just figuring out how much they are.
  Mr. President, each year the American Tax Foundation computes what 
they call ``Tax Freedom Day,'' the day of the year when the average 
American can quit working to pay Federal, State, and local taxes and 
start working for herself or himself. Last year it was May 7. This year 
it will be May 9. This means each day you have worked since the new 
year has been simply to pay your tax bill for the new year and you 
still have 3 weeks to go. If that does not make you happy, I do not 
know what will.

  The American people take too much of their hard earned income to pay 
for Uncle Sam's spending habits. Why is the tax burden on families so 
high? Because Uncle Sam spends too much. It is that simple. Congress 
has not balanced the budget since 1969. The cumulative effect of all 
that deficit spending is a tax burden for most families that exceeds 
what they pay for food, clothing, housing and automobile costs 
combined. We need to fix that. We are trying to balance the budget so 
we can reduce the tax burden for families with children, small and 
home-based businessowners, family farmers, and frankly, everybody else 
who is taking part in the economy.
  The first step in bringing tax relief to middle-class America, 
however, is to bring Government spending under control. A balanced 
budget means a healthier economy, more Government revenue and less need 
for taxes. As you fill in the amount of tax paid line on your 1040 form 
this year or as you write out your check to the IRS, think about ways 
you could use even a portion of that tax money and remember who is 
trying to balance the budget and who is not because balancing the 
budget and getting spending under control is the first step toward tax 
relief.
  I thank the Chair and yield the floor.
  Mr. THOMPSON addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the senior Senator from 
Tennessee.
  Mr. THOMPSON. I thank the Chair.
  Mr. President, it seems at this time of year every year we tend to go 
out of our way to criticize the Internal Revenue Service, but I think 
part of the reason for that is that sometimes it seems to take so much 
to get their attention. As the Presiding Officer knows, the General 
Accounting Office has a list of high-risk agencies which they set forth 
as agencies that are more prone to fraud, waste and abuse, and 
mismanagement.
  The IRS has been on that list now for 6 years in a row, and we had 
hearings last week in order to find out what they intended to do about 
it because not only do they have the normal problems that we all hear 
about and complain about every year, it seems now that in their attempt 
to modernize their computer system, which is totally outdated; they are 
working on 1960's technology, but in an attempt to do something about 
that they have spent billions of dollars and canceled one program after 
another and are not making substantial progress into getting into the 
20th century much less the 21st century.
  We also found out that the Internal Revenue Service cannot stand an 
audit. They do not really know how much they have spent on this 
computer modernization system and they really do not know how much 
money they collect in terms of various categories of collection.

  In addition to that, we have learned more about the security 
problems. We know that we are all concerned about the browsing problem 
we have had some discussions about recently, but

[[Page S3164]]

now we learn of the tremendous physical security problems, so much so 
that they had to classify the report when they sent it over here to us 
because they did not want to provide a blueprint, understandably, for 
people who might wish them ill. It is that bad.
  Congress has responded with the power of the purse. And last year we 
cut them back some, but that is not the total answer because they are 
going to need revenues in order to take care of some of these problems. 
So we had the hearings. We brought the IRS in. We brought the Treasury 
in, which the IRS, of course, is a part of. Perhaps if there is any 
good news in this it looks as if for the first time we do have a 
blueprint to work our way out of this.
  Congress in the past few years has passed some legislation which 
requires these agencies to come in and report on what kind of progress 
they are making in solving some of these problems. We have not always 
had this, but now we have some accountability--what are they trying to 
achieve, and every year come back and tell us and show us in some 
detail what they are doing to work out of these things.
  Treasury now says they are going to take a greater oversight 
responsibility, which they clearly should have done long before. There 
are timetables which they are going to be held accountable to. We are 
going to make sure they report back in solving these problems when they 
are supposed to be reporting back. So perhaps we are going to be making 
some progress for the first time. But this is the reason why we talk 
about the IRS. It is not just the fact that people do not like to pay 
taxes. It is just they have the right to have the IRS and all these 
other agencies at least reach the minimal compliance levels they expect 
out of the American taxpayer because, ultimately, our national security 
and our prosperity depend upon our faith in these institutions and 
certainly the IRS.
  So with that, I thank the Chair and will relinquish the remainder of 
any time I might have.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Alabama.
  Mr. SESSIONS. Mr. President, I would just like to take a few minutes 
on this important day in our Nation's history, this day that comes up 
every year, when we are responsible for paying our taxes, to discuss 
the problems of working families and what they are facing in America.
  Two years ago, I traveled all over the State of Alabama, campaigning 
for Attorney General. I talked to all kinds of people. This past year I 
campaigned throughout the State of Alabama and talked to hundreds and 
hundreds of young families who are struggling throughout our State. 
They are struggling all over America. People who are doing their very 
best to live the American dream are not able to do so because of 
financial reasons. Many families are calling on their parents to help 
them with the finances and burdens it takes to raise their children. We 
need to help those families.
  I was recently in a committee meeting in which a very wise Senator 
said: We look at numbers and we study statistics and we do all these 
kinds of things. But, when it comes right down to it, we need to use 
our judgment about what we believe are the most important problems 
facing America. In my judgment, no matter what numbers show--and 
numbers back me up on this--in my judgment, working families are 
struggling. In terms of income, the numbers have declined in the last 6 
years in relative terms, considering inflation. It is more expensive 
than ever to raise children today.
  I want to show a chart that illustrates a shocking statistic. In 
1950, due to the personal exemption for children and family members, 
which allows you to exempt your income from taxes, 70 percent of the 
average working family's income was exempt from taxes. They did not 
have to pay taxes on 70 percent of their income. Today only 30 percent 
of working families' income is exempt from taxes. They must pay taxes 
on 70 percent of their income and they are paying at a much higher rate 
than they paid in 1970. Is there any reason to wonder that working 
families are falling further behind? In 1950, they paid 2 cents of 
every dollar to the Federal Government. Today, every working family 
pays 25 percent of every dollar to the Government. That is 
unacceptable. No wonder families are struggling to raise and educate 
their children, who will take care of us in the future.
  The Republicans have proposed a bold plan to give a $500-per-child 
tax credit to every working family in America. I support that proposal 
and campaigned for it very aggressively. Just a few months ago the 
President said he believed in the per-child tax credit and that he 
would support such a plan because it is needed to bring working 
families' incomes up to the level that they need to be. I ask American 
families today to think about this. What would you do if there were two 
children in the family and you had a $1,000 tax credit? That means 
$1,000 extra income to the family, in which there would be no income 
tax or health care taken out--nearly $100 a month, $90 a month extra 
income that you could spend for your family.
  It would be available to buy shoes, clothes and for field trips for 
school. Maybe the car breaks down--you could repair the transmission. 
Maybe you need a set of tires for the vehicle or just grocery money. 
These are the kinds of things that families struggle with every day. 
This tax credit would put real money into their hands and drive their 
incomes up in an immediate way. It would put an immediate source of 
income into the pockets of the people who are making America great.
  These are the people who are going to raise the next generation who 
will lead this country. The families today are raising that next 
generation that will take care of us and we need to give them some 
relief. We need to give families some income so that they can do their 
job of raising their children. We need to give them the kind of 
commitment that our families gave to us.
  One thing I must say. The President says he is for a tax credit. But 
you have to look at the small print, as we so often have to do. His 
$500 deduction would only go up to age 13. I have had children under 
age 13. I have had children over age 13. Anyone who has had children in 
that age group knows it costs more to raise a teenager than it does a 
younger child.

  That is totally unacceptable. The President says he is for a tax 
credit. Let's do it. Let us support the teenagers, too. Let families 
have the kind of money so they can raise their teenagers in the way 
they should. I feel this is a very important issue for our country. I 
think it is important that this body recognize that we have penalized 
working families. It is time to give families some relief and restore 
them to the position they were in a number of years ago. It is time to 
restore and strengthen family values in America.
  I yield the floor.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Colorado.
  Mr. ALLARD. Mr. President, I rise today to make a few remarks 
concerning April 15. That is today. As all Americans are no doubt 
aware, today is tax day. Millions of Americans spent this past weekend 
finalizing their returns. Today those returns are due.
  However, while the returns and taxes are due today, the tax burden 
continues. According to the Tax Foundation, the average American family 
now must work until May 9 in order to pay local, State, and Federal 
taxes. April 15 may be tax return day, but May 9 is tax freedom day.
  The Tax Foundation also reports that Federal, State, and local taxes 
now cost a typical two-earner family more than that family spends on 
food, clothing, transportation, and housing combined. It is no wonder 
that most families require more than one income. As families work 
through their tax returns, many were no doubt struck by the complexity 
of the tax system. Earlier this year, Money magazine revealed the 
results of its annual report on tax complexity. The magazine 
commissioned 45 tax professionals, many of them CPA's, to complete the 
tax return of a hypothetical and prosperous American family. While this 
hypothetical family certainly had more tax issues to deal with than the 
typical family, the issues raised were not unique and should have been 
very familiar to tax professionals.
  The results reported in the Money article were astounding. No two 
preparers came up with the same result, and

[[Page S3165]]

the fluctuation in the level of the taxes was striking. There were 
literally tens of thousands of dollars of differences between the 
calculations of some of the preparers.
  Nearly $14 billion is spent by the Internal Revenue Service and other 
Federal agencies to enforce the tax laws each year. There are 136,000 
employees of the Internal Revenue Service. There are 17,000 pages of 
Internal Revenue Service laws. There are 480 tax forms published by the 
Internal Revenue Service, and there are an estimated 8 billion pages of 
forms and instructions sent out by the Internal Revenue Service every 
year.
  I think these statistics make the case for tax reform. There are 
certainly a number of reforms that need to be made at the Internal 
Revenue Service. However, Congress is the principal entity responsible 
for the Tax Code. Congress should scrap the current tax system and 
start fresh with a simple and fair system.
  I support taking this action now. However, if our leadership 
determines we cannot reach agreement with the President on 
comprehensive tax reform, then we should at a minimum reduce taxes this 
year. This should be done by a reduction in the capital gains tax by at 
least half the current rate for all individuals, eliminate the estate 
taxes, and a reduction in the family tax burden. This action should be 
done as a part of the budget and should not be delayed.
  Before I close, I would like to mention a necessary tax change in 
health care. This concerns medical savings accounts. Last year, 
Congress made the tax changes necessary to make medical savings 
accounts available for up to 750,000 individuals. Medical savings 
accounts allow companies to give the funds currently set aside for 
health benefits directly to their employees. These employees are then 
empowered to purchase their own health plans and set aside funds for 
future medical expenses.

  MSA's, or medical savings accounts, are an important counterweight to 
Government and health care bureaucracies. They put greater power in the 
hands of individuals and families. The changes made last year have 
proven popular and demand for medical savings accounts is high. But 
even before Congress provided the full deductibility for MSA's, many 
employers offered them successfully for years.
  Last year, I opposed the artificial cap on medical savings accounts, 
and today I am introducing legislation that would make medical savings 
accounts available to all taxpayers. This will foster the type of 
empowerment and competition that we need in health care. It will also 
increase health care coverage for the self-employed and, thus, those in 
transition from one job to another. Medical savings accounts are the 
ultimate form of health care portability.
  Medical savings accounts provide a superior alternative to a further 
expansion of Government-run health care. Americans want health care 
choice and competition, not more bureaucracy.
  I invite all my Senate colleagues to cosponsor this MSA extension 
legislation.
  I yield the floor.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Arkansas.
  Mr. HUTCHINSON. Mr. President, every year like clockwork, with the 
approach of April 15, tax day, millions of Americans are out scrambling 
to find out how much they owe the Federal Government in taxes and how 
much they have overpaid the Federal Government in taxes. The IRS 
requires us to fill out complicated tax forms and, after plugging in 
numbers to formulas and performing various mathematical calculations, 
we come up with the magic number of what we owe the Federal Government 
or sometimes, rarely, what the Federal Government owes to us. To 
complete these tax forms is sobering. Sometimes it is a frightening 
experience, especially when you look at the block on your W-2 form that 
shows the amount of your income that has been consumed for tax 
purposes.
  The truth be told, the typical worker toils nearly 3 hours in a 
typical 8-hour workday just to pay taxes. Many families with two 
working parents find that one of those working parents is working full 
time just to pay Uncle Sam. Put another way, May 9 is tax freedom day. 
In theory, this is the day when an individual who has been working 
since January 1 will be able to take home his or her first paycheck. 
Every penny of the income they earn during that first 5 months of the 
year has gone to pay their annual income taxes.
  Our Nation's total tax burden is at an alltime high. Federal, State 
and local receipts remain at a record 31.7 percent of the gross 
domestic product. That is one-third of our Nation's total output now 
consumed in taxes.
  Even more demonstrative of the magnitude of the American tax burden 
is the fact that the average American family pays more in taxes, as we 
have heard over and over again, than it spends on food, clothing, and 
shelter combined. This, I think, is proof positive that American 
families are overburdened and in need of tax relief.
  That is why I introduced, with Senator Grams of Minnesota, who is on 
the floor this afternoon, the $500-per-child tax credit for all working 
families, regardless of income. Everyone talks about the importance of 
family values. It is time that we act to preserve American families by 
passing that $500-per-child tax credit.
  I talked to a person in Pine Bluff, AR. He said, ``My children are 
grown. What do you have for me? I don't need that $500-per-child tax 
credit.'' I said, ``Sir, if you would just compute the benefit that you 
had as you had reared your children--they are now grown--you would see 
that the benefit that you had has been eroded through inflation and no 
longer exists.'' And he was soon convinced. As we look at that per 
child dependent exemption, that would be over $8,500 had it been 
indexed for inflation.

  The 1997 tax season has been fraught with reports of abusive 
practices and sloppy management with the IRS--reports of taxpayer money 
being used to provide tax refunds to prison inmates at the nearby 
Lorton prison facility, of IRS agents improperly accessing taxpayers' 
returns, and of other coercive tactics employed by IRS agents to 
collect taxes.
  Americans already suffer under an unfair and incomprehensible Tax 
Code. As they struggle to be honest, taxpaying citizens, they should 
not have to worry about being harassed by an agency that, according to 
the General Accounting Office, cannot accurately account for its own $7 
billion annual budget.
  I think millions of Americans feel as I do today, as we look at the 
Internal Revenue Service. We would say, ``Physician, heal thyself.''
  I yield the floor.
  Mr. FRIST addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Tennessee.
  Mr. FRIST. Mr. President, I understand morning business was to end at 
12:30. Was there a unanimous consent obtained to extend that?
  The PRESIDING OFFICER. The Senator is correct, but there has not 
been.
  Mr. FRIST. Mr. President, I ask unanimous consent that morning 
business be continued for 30 minutes, or until such time that speakers 
on the floor are allowed to make their presentation.
  Mrs. HUTCHISON. Mr. President, can I make an inquiry?
  The PRESIDING OFFICER. The Senator from Texas.
  Mrs. HUTCHISON. The time was extended for the Democratic side by 10 
minutes. Up until 12:40 is still the Republican time; is that correct?
  The PRESIDING OFFICER. The Senator is correct.
  Mrs. HUTCHISON. Thank you, Mr. President.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Tennessee.
  Mr. FRIST. Mr. President, I ask unanimous consent that the time be 
extended up until 1 o'clock, or until Senators are allowed to complete.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FRIST. President, I rise today to speak out for Americans on tax 
day--April 15. On this day more than any other, every American is 
reminded how much government costs--not just in actual dollars but in 
time and energy spent filling out forms.
  Today, many of my colleagues have described the tax burden in many 
insightful and illustrative analogies. For example, we know that the 
average American will work until May 9--tax

[[Page S3166]]

freedom day--just to pay his or her taxes. We know that the typical 
American family pays 38 percent of their income in Federal, State, and 
local taxes--a one-third increase over the past four decades. I commend 
my colleagues for bringing clarity and focus to an extremely complex 
debate.
  Today, I want to add to their comments. Putting statistics and 
anecdotes aside, every lawmaker should be asking three questions about 
tax revenue--not just on Tax Day but every day: Whose money is it? How 
much of it are we spending? and How are we spending it?


                           whose money is it?

  Whenever we debate tax policy in this body, we must begin with a 
simple principle that should govern all our decisionmaking: There is no 
such thing as government money, there is only the people's money. Every 
dollar that comes into Washington belongs to some individual, family, 
or business--not the other way around. For far too long, the Federal 
Government has treated the income of the American people as it own--as 
an entitlement it deserves--and this practice must stop.
  As newspaper columnist James Glassman describes it,

       Tax dollars begin life as personal dollars. They're yours, 
     not Washington's. You do agree, through the political 
     process, to turn over some of your income--but that deal is 
     transitory and renewable, and it depends on Washington 
     providing good value for your money.

  That agreement is based on public trust.
  When we Senators meet with constituents in our home States, we must 
remember: It's their money. Every time we pass a spending bill on the 
floor of the U.S. Senate, we must be able to look our constituents in 
the eye and say, ``Here is how we spent your money.'' If we can't--look 
them in the eye--then we have betrayed their public trust and we have 
failed as representatives.


                    how much of it are we spending?

  Too often over the last half century, lawmakers seem to have 
forgotten or ignored whose money they were managing. Once we remind 
ourselves that we are dealing with the taxpayer's hard-earned dollars, 
we must ask, ``How much of it are we spending?''
  This year, the Federal Government will spend about $1.6 trillion. 
Grasping the concept of a trillion dollars is difficult, but let me 
try. If you started a business 2,000 years ago and that business lost 
$1 million a day each day from then until now, you still would not have 
lost your first trillion dollars. Yet our 200-year-old Government 
already owes $5.5 trillion.
  Why? Because the Federal Government consistently spends more than it 
takes in, running up massive debts and threatening our economic future. 
This year alone, the Federal Government will spend about $107 billion 
more than it receives from the taxpayers. These annual deficits have 
added up over time to a total debt of $5.4 trillion--that's nearly 
$20,000 for every man, woman, and child in America. We cannot continue 
to shackle our children and grandchildren with this debt burden. That 
is why balancing the budget is so critical for our future. A balanced 
budget is the first step toward breaking those shackles.


                        how are we spending it?

  The third and final question lawmakers must ask themselves on tax day 
is ``How are we spending the taxpayers' money?''
  The simple answer is, ``We are spending it at an unsustainable 
rate.'' In 1965, entitlement spending and interest on the debt consumed 
30 percent of the Federal budget. Discretionary spending--which 
includes the basic functions of Government like defense, highways, 
education, medical research, and national parks--consumed 70 percent. 
Today, entitlements and interest consume 70 percent of the budget, 
while discretionary programs consume 30 percent. By 2012, just 15 years 
from now, entitlements and interest on our growing debt will consume 
all Federal revenues--leaving nothing for roads, education, national 
parks, medical research, defense.
  We have all heard from Members who say that the current tax rate is 
punitive, burdensome, and a threat to the survival of our competitive, 
capitalistic economy. If that's true today--when our tax rate hovers at 
38 percent per family--consider the effects on our economy in the 
future if we do nothing to change this. If we fail to act and act soon, 
a child born today will pay a lifetime tax rate of 84 percent on his or 
her earnings to pay for the cost of Government overspending. Such a 
burden would be at the very least unfair and irresponsible.
  As the tax debate rages on, I urge my colleagues to remember that we 
are trustees of the American Treasury. Building and maintaining that 
trust is one of our most important duties as representatives of the 
people. If we always remember whose money we are spending, how much we 
are spending, and how we are spending it, I believe we can be more 
responsible trustees and we can leave our children a future worth 
working toward.
  I yield the floor.
  Mrs. HUTCHISON addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Texas.
  Mrs. HUTCHISON. Mr. President, today is tax day, and for millions of 
Americans, this is the day that they end their painful ritual of fiscal 
fealty to the Federal Government. So I thought it would be appropriate 
to cite a few statistics that make tax day possible: 136,000 is the 
number of employees of the IRS responsible for administering the tax 
laws; $13.7 billion, that is the amount that it costs to administer and 
enforce the Tax Code; 480 is the number of forms printed by the IRS; 8 
billion--8 billion--is the number of pages of forms and instructions 
sent out by the IRS every year; 293,760 is the number of trees that 
must be cut down each year to supply the 8 billion pages of paper 
needed for filing the country's taxes.
  Mr. President, these are just a few of the statistics that point out 
the complexity and the burden that our Tax Code puts on the American 
family and the Nation itself. The typical American family pays more in 
taxes than it spends on food, clothing, and shelter combined. That is 
more than 38 percent for total taxes versus 28 percent for food, 
clothing, and housing.
  This year, the Republican Congress wants to do something unusual for 
the taxpayers of our country: Give their money back to them. We want to 
stop penalizing young couples for getting married. Republicans want to 
increase the standard deduction for married couples filing jointly. In 
1993, 40 percent of families paid higher taxes because they got 
married. A couple without children who earns $20,000 a year pays an 
additional $188 in taxes. When they have children, the number soars to 
$3,717 per year. In Texas, a mother of two children on welfare is 
penalized $5,862 a year for marrying a man who earns $20,000. Our Tax 
Code is biased against marriage, and that is just flat wrong.
  We want to provide a $500-per-child tax credit for the American 
family to give them help in the struggles of raising a family. This 
would mean 3.5 million families in America would not have to pay taxes 
anymore. We want to cut capital gains taxes to encourage and reward 
investment to create new business, to create new jobs.
  A low capital gains tax rate is important to our future, because we 
should be able to take our money and put it where we need it at the 
time. But many people cannot sell their assets because of the huge 
capital gains tax that has accrued over the years. So we need to 
encourage investment to create the new jobs and the new industries that 
will get our economy on a safer track.
  We want to cut estate taxes so that years of hard work and success 
will not be wiped out in a generation. I have known people who have had 
to sell land that they inherited because they could not pay the 
inheritance taxes on that land. Mr. President, that is wrong. It walks 
away from the American dream. The American dream is if you work harder 
in this country, you can do better and you can create a little nest egg 
that will make it easier for your children to have a better life. Why 
in the world would we take dollars that are taxed first when you earn 
them, again when you invest them, then when you die? It does not make 
sense, and it especially hurts the small family farm, ranch, or 
business.
  We are trying to cut the burden of taxes on the American family. What 
better day than today to talk about

[[Page S3167]]

this burden and to talk about the differences between the President and 
Congress and our priorities.
  Thank you, Mr. President. I yield the floor.
  Mr. GRAMS addressed the Chair.
  The PRESIDING OFFICER. Time has expired. Under the current order, we 
are in morning business.
  Mr. GRAMS. Mr. President, I ask unanimous consent to speak for up to 
5 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRAMS. Mr. President, there are 365 days in each calendar year, 
but I can think of no other date that the American people await with 
such universal dread as April 15, tax day.
  However, there is one other date working Americans should look upon 
with equal disdain, and that is the date that says a great deal about 
the Federal, State, and local tax burden working families are expected 
to bear. That date is May 9, this year's tax freedom day.
  As it does every year, the Tax Foundation has calculated the date the 
average American stops working just to pay their share of the tax 
burden and begins working for themselves. This year, tax freedom day 
falls on May 9. And while the use of the word ``freedom'' in tax 
freedom day implies something to celebrate, working Americans have 
absolutely nothing to celebrate when it comes to their taxes.
  Tax freedom day falls a full day later this year than it did in 1996, 
meaning taxpayers must work 128 days before they can count a single 
penny of their salary as their own.
  Of those days, 44 will be spent paying personal income taxes; 38 days 
will be spent paying payroll taxes; sales and excise taxes, 18 days; 
property taxes, 12 days; corporate income taxes, 13 days; also 3 days 
will be spent paying miscellaneous taxes.
  When you total all that up, that is 128 days, Mr. President, 128 days 
in which the American people spend imprisoned by their own tax system. 
If the cost of complying with the tax system itself were included in 
the calculations, tax freedom day would be pushed forward another 13 
days.
  The tax burden on middle-class Americans is rising rapidly. Taxpayers 
are now working an entire week longer to pay off their taxes than they 
were when President Clinton first took office in 1993. That sounds like 
Government getting larger and more expensive, not the ``era of big 
Government is over.'' If you calculate the tax load in hours and 
minutes, instead of days, Americans spend fully 2 hours and 49 minutes 
of each 8-hour workday laboring to pay their taxes.
  That is a great deal more than the 1 hour, 40 minutes it takes to pay 
for their family's food, clothing, and shelter.
  May 9 marks the arrival of Tax Freedom Day for the average State.
  Unfortunately for taxpayers in my home State, Minnesota ranks well 
above average in the tax burden my constituents are forced to bear. In 
1997, Tax Freedom Day will not arrive in Minnesota until 4 days later, 
until May 13. Only five other States and the District of Columbia mark 
Tax Freedom Day as late or later than we do.
  There has never been a time in our history when the need for tax 
relief was so obvious and so great. Let us make 1997 the year we enact 
the $500 per-child tax credit. Let us make 1997 the year we kill off 
the death tax. Let us make 1997 the year we promote savings and 
investment by cutting capital gains. Let us not let another Tax Day go 
by before we deliver on our promise of substantial relief for the 
American taxpayers.
  Mr. President, it is not a normal practice of mine to quote poetry on 
the Senate floor. I prefer to leave the rhymes to those Senators who 
possess a more poetic nature than I. But because this is Tax Day, I 
would like to share the closing lines of a poem by Ogden Nash and then 
follow it up with a final comment.

     ``Abracadabra, thus we learn
     The more you create, the less you earn.
     The less you earn, the more you're given,
     The less you lead, the more you're driven,
     The more destroyed, the more they feed,
     The more you pay, the more they need,
     The more you earn, the less you keep,
     And now I lay me down to sleep.
     I pray the Lord my soul to take
     If the tax-collector hasn't got it before I wake.''

  It was 1935 when Mr. Nash first published his poem warning of the 
dangers of a tax system run amuck. At that time in our history, the 
Federal tax rate was less than four percent.
  Now, I cannot imagine what kind of poem Mr. Nash would write today, 
at a time when Washington demands an average 28 percent of our income 
in taxes. And even if I could imagine what Mr. Nash would write I am 
not sure I would be allowed to read it on the floor of the Senate.
  Mr. WYDEN. Mr. President, I ask unanimous consent to speak for 15 
minutes as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________