[Congressional Record Volume 143, Number 131 (Friday, September 26, 1997)]
[House]
[Pages H8037-H8040]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      GREAT FUTURE FOR OUR NATION

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 1997, the gentleman from New

[[Page H8038]]

York [Mr. Paxon] is recognized for 30 minutes as the designee of the 
majority leader.
  Mr. PAXON. Mr. Speaker, I do not think there is any doubt in the 
minds of most of our constituents back home that the best days of this 
Nation are ahead of us. We have always been a nation that has looked 
ahead with great hope and the belief that the future is ours to shape, 
and I think we can subscribe to that notion today more than ever 
before.
  I am proud of the work this Congress has done since we Republicans 
took control of this institution in 1994. The American people wanted 
real change and we have done what we can to try to provide that change 
and a real difference in the way this Congress is operated, looking 
forward, moving this country ahead, whether it was the institutional 
reforms we put in place on the opening day, whether it was welfare 
reform or immigration reform, the Freedom to Farm Act, and so many 
other pieces of legislation.
  In the last Congress and in this Congress legislation has addressed 
important issues that for so long had been pushed aside and not really 
taken to fruition, to move those issues forward and solve these 
problems; whether it trying to address the problems of a Medicare 
system that was in financial failure, we have now passed legislation to 
extend the life of the Medicare system that saved the lives of my 
parents; whether or not it was for many years setting aside the issue 
of tax relief for working families, this Congress this summer moved 
forward with an important step forward in providing tax relief in the 
form of a $500 per child tax credit, and death tax and capital gains 
tax relief.
  But certainly one of the most important and historic things we have 
done is focus our attention on the effort to balance our Nation's 
budget. For so long this Congress would spend our children and 
grandchildren's money. We would use their credit cards, put the bills 
on their home mortgages so that 30, 40, 50 years from now they would be 
paying the bills for today. And in 1994, with the Contract With 
America, the Republican Party said right out in front of this Capitol, 
just a few steps from where I speak today, this party said we were 
going to balance the budget by the year 2002.
  We put a deadline on it to force action, to force this to become a 
priority. And this summer I am pleased that in July we were able to 
pass legislation that will do just that, make certain our budget for 
this Nation balances for the first time in a generation or longer.
  I think that these efforts will ensure that the best days of our 
Nation are ahead for us and for our children and succeeding 
generations. My wife Susan and I are very proud parents of a 16-month-
old daughter, little Suzie. And every night, as she is sleeping, I look 
in and feel that it is our job to make certain that her future is 
better than the ones that our parents handed to us. Each generation 
wants to be given the chance to give the next generation hope and 
opportunity. That is what balancing this budget is all about.
  Now, the next great issue that we face, and I believe it is one we 
have talked about for a long time, but the issue that we face and we 
need to move forward on, much like the issue of the balanced budget, is 
the issue of fundamental tax relief.
  Now, I know, my colleagues, that when we say those words at home, 
people grab for their wallets. Because for years when Congress talked 
about tax relief and tax reform, what they really meant was we want 
more of your taxes. We are going to sit here in Washington and tinker 
with that Tax Code a little bit. And we will go home and say it is 
better, but what folks know at home, really, is that it makes their 
life more complicated.
  It is the reason why today 50 percent of all taxpayers finds it 
necessary to seek professional help, and I do not mean psychiatric 
help. Some may feel they need that in trying to deal with that 5 
million-word Tax Code, but 50 percent of Americans have to go to H&R 
Block or to an attorney or an accountant because of the complexity and 
the confusion that that Tax Code brings to them every year.
  This, to me, is as important an issue as balancing our budget. We set 
a deadline to get that done, to force the issue to be resolved, and I 
think we can do the same with the issue of fundamental tax reform, 
sweeping tax reform. We need to set a deadline. Just last week we 
started that process. I filed legislation, H.R. 2483, that would set a 
deadline.
  I use the analogy of my school years. I know how it was when it came 
time to study for an exam. It usually resulted in me thinking about it 
the night before the exam. And I see one of our pages walking across 
the back of this room nodding his ahead. Well, my grades reflected 
that. I hope his do not. But the fact is that we do need deadlines in 
life to force us to move and to act.

  By setting the deadline in H.R. 2483 for fundamental tax reform, I 
think we will force this Congress and this country to come up with a 
better way in which we can gain the revenue we need to run the 
Government and the important programs of the Government, but do it in a 
way that does not force 50 percent of Americans to run off to H&R Block 
or somebody else to get help in putting together their taxes.
  Now, I am pleased to report that today, and it has just been a week 
and a couple of days since we filed this historic legislation, 2483, 
that 47 Members of this Congress, this House, have moved forward to 
cosponsor that legislation. I am pleased with the fact that just the 
day before yesterday, out in front of the Capitol, Senator Brownback, 
the senior Senator from the State of Kansas, announced that he was 
putting his version of our legislation in before the U.S. Senate. So 
now we have a bill in both Houses to sunset the Federal Tax Code and to 
begin this great debate.
  I am pleased with the fact that this is bipartisan legislation. In 
this House both Republicans and Democrats are sponsoring H.R. 2483. I 
am also pleased that groups outside of the Congress have already moved 
forward in support of our legislation to sunset the Federal Tax Code.
  The most important group, in my view, in America that deals with 
small business and entrepreneurs, the National Federation of 
Independent Businesses, on Monday launched a nationwide campaign in 
support of legislation, our legislation, to sunset the Federal Tax 
Code. They have decided they are going to get a million signatures 
across this country to bring here to Washington to lay down in front of 
this Capitol to say to Members of Congress your constituents back home, 
Mr. Congressman or Congresswoman, they would like you to move forward 
on this debate on sunsetting the Federal Tax Code.
  They have been joined, along with the NFIB, Americans for Hope, 
Growth and Opportunity, which is headed up by Steve Forbes, who in the 
past few years has raised the issue of a national flat tax and tax 
reform to a national debate. They have endorsed our proposal as well as 
Americans for Tax Reform, which is one of the most important 
organizations that have been fighting for fundamental tax reform for a 
long, long time now.
  These organizations, along with people across the country, have 
called in to our office and offices across Capitol Hill and are saying, 
yes, we want to sunset that Tax Code, we want to begin this debate on 
fundamental reform of our Federal tax system. We want to do for the Tax 
Code what Congress did this year by balancing the budget; set a goal, 
involve the American people in that debate, and move this issue 
forward.
  Now, what exactly does H.R. 2483 do? It is real simple. As a matter 
of fact, it is probably one of the shortest pieces of legislation in 
terms of verbiage we could ever find. I even understand it. I do not 
need to have people explain it to me, which is a blessed relief in 
Washington to have something so short even a Member of Congress can 
understand it. But it is just this long. It is less than a page of 
information.
  And all it does is say, first, that the Internal Revenue Code is 
sunsetted on December 31, 2000. Three years from this New Year's Eve 
the entire Federal Tax Code will come to an end. It repeals 96 of 99 
chapters of that code.
  I make this caveat. The only thing we do not repeal in there are the 
provisions relating to the financing of Social Security and Medicare. I 
do not want to touch those two systems. The way we collect the revenue 
for those two programs will not be touched by

[[Page H8039]]

our reform of the remaining part of the Tax Code that deals with all 
the other provisions.
  We eliminate the overwhelming majority of the 5.5 million words in 
that Tax Code and, frankly, eliminate the need for most, if not all, of 
the 113,000 folks who work at the Internal Revenue Service.
  We will reduce the $200 billion cost of tax compliance. What does 
that mean? It means that folks every year spend in our country $200 
billion out of their pockets every year to have somebody help them 
prepare their taxes, keep their records they need for their taxes, get 
advice and consultation on how to deal with this 5.5 million words Tax 
Code. That is $200 million that families will have to spend to set 
aside to put for their college education of their kids, maybe to take a 
vacation that is long overdue, put a new roof on the house, maybe some 
folks will use that money, instead of preparing for the tax man, to 
start a new business instead, to create some new jobs in their 
businesses for other folks to be employed. It is a lot better way to 
spend those dollars than in complying with the 5.5 million-word Tax 
Code.
  Now, I think these are important steps forward, the opportunity to 
sunset this Tax Code, and then to begin a great national debate, to 
involve citizens from across the country in choosing a new system of 
taxation.
  Now, some, like Steve Forbes, or in this Chamber our majority leader, 
the gentleman from Texas, Dick Armey, have proposed a flat rate income 
tax that we could fill out on a postcard about this size. We would put 
down our income and a few basic deductions and send it to Washington. 
We would not need to fill out countless forms and deal with countless 
bureaucrats or countless Congressmen and women to fill out our tax 
forms.
  There is another alternative, proposed by the gentleman from Texas, 
Mr. Bill Archer, chairman of the Committee on Ways and Means, or the 
gentleman from Louisiana, Mr. Billy Tauzin, or the gentleman from 
Colorado, Mr. Dan Schaefer, and they propose no income taxes or no 
business or corporate taxes at all, just a national sales tax.
  Now, those are two good ideas. I am sure there are many more out 
there out across this country, and once people realize we are serious 
about sunsetting the Tax Code, I think we will be flooded with good 
ideas, just as we were during the balanced budget debate on how we can 
move forward with a better, fairer system of taxation in this country.
  But there is another reason to change, and that is a fundamental 
philosophical one. This current 5.5 million-word Tax Code, which is 
enforced by 113,000 IRS folks, which is changed and meddled with 
constantly by 535 Members of Congress, this does more than just cause 
inconvenience, it limits other personal and economic freedom, and it 
discriminates against children and families and entrepreneurs.
  The Tax Code encourages, as I mentioned, hundreds of billions of 
dollars in tax costs of preparation and it also incurs hundreds of 
billions of dollars in the underground economy, which we never find out 
about and which is never taxed and the revenue is lost to the 
Government.
  I think most of all the complexity and unfairness of the Tax Code 
leads most folks back home to distrust the Tax Code. I know when I hold 
town meetings throughout the Finger Lakes or western New York, in 
Buffalo or Rochester or Syracuse, New York regions, people come to me 
all the time and say they do not believe in the system; it does not 
work, this tax system, and they lose their faith in a Congress that has 
put this in place or a Government that enforces it. We can change all 
that.
  If there has ever been a reason to make change, all we have to do is 
walk out of this Chamber and down to the other body at the other end of 
this Capitol and listen to the discussion that has been going on in the 
committee chaired by Senator Bill Roth from Delaware on the Senate's 
Committee on Finance, that has been holding hearings this week, 
bringing in current and former IRS agents and other experts who have 
been talking about the abuses of this current system and how it is 
unfair.
  They have done it in the Senate, and earlier this year Money magazine 
devoted a lot of attention to this issue. And they have said that the 
Internal Revenue Service says that they are simply implementing the Tax 
Code that Congress put in place. There is no arguing the current code 
is too complex, but any agency with the power of the Internal Revenue 
Service needs to be watched very, very closely. Whether it is Money 
magazine or ``60 Minutes'', the CBS show last Sunday night, or the 
Senate hearings, they have been underscoring these kind of statistics, 
which are frightening.
  The fact is that more than 8 million Americans a year receive 
incorrect tax bills, incorrect tax billings from the Internal Revenue 
Service.

                              {time}  1430

  Or the refunds are incorrect because of mistakes made by the IRS when 
entering information in their computers. That is 8 million wrong tax 
bills or refunds. That is as if every tax bill or refund was wrong for 
all the taxpayers of Alaska, Delaware, Hawaii, Montana, Nebraska, 
Nevada, North Dakota, South Dakota, Vermont, and Wyoming; 10 States' 
worth of wrong taxes or wrong refunds sent out by our Government. What 
kind of company in the private sector would stay in business very long 
with those kind of statistics?
  The IRS has wasted more than $5 billion since 1986 in an effort to 
modernize their computers. Just think of that, they cannot even get a 
computer system set up to handle all the information that comes in. 
These are the kinds of things that are concerning the taxpayers across 
this country.
  In fact, in a Money magazine nationwide poll, taxpayers believe the 
IRS collection tactics are heavy-handed, intrusive, and outdated. As a 
matter of fact, 34 percent of taxpayers who have been audited said the 
IRS acted rudely or were asked probing questions about their lifestyles 
that had nothing to do with their taxes.
  My colleagues in this Chamber, you know and I know, we hear it all 
the time from our constituents, we do not need a magazine to prove it. 
We do not need ``60 Minutes'' to prove it. And frankly, even though 
they are important hearings, we do not need more Senate hearings. What 
we need is action.
  I am pleased with the fact that the IRS itself is starting to get the 
message. In the Washington Post today the headline is, ``Beleaguered 
IRS Announces Steps to Curb Abuses. Agency Won't Rank District Offices 
on Revenue Collected Acting Chief Tells Senators.'' In other words, 
they heard all the testimony in the Senate, and the IRS is rushing out 
to say, OK, we will clean up our act.
  It says, ``The Internal Revenue Service, battered by 3 days of Senate 
hearings into agency abuse of taxpayers, of its own employees, 
yesterday announced a series of steps to ease the pressures that some 
IRS workers say lead to the problems. The acting commissioner, Michael 
Dolan, told the financial committee that they will stop ranking their 
district offices based on revenue collected.''
  What does that mean? What it means is that they are admitting what we 
know is the case, that there is in effect quotas, that IRS employees 
are told, ``You are going to be graded and ranked.'' The offices are, 
so the individuals clearly, it all adds up, are ranked based on what 
they collect. That means there is tremendous pressure to collect more. 
Do not worry whether or not it is fair or unfair, just go out there and 
get those dollars and make those seizures.
  I do not think that is the way we want our Government to work. But 
the Acting Commissioner Michael Dolan said, ``I don't come here,'' to 
the Senate this is, the other body, ``in denial. The IRS is trying very 
hard to make a priority of serving law-abiding taxpayers.''
  My colleagues, that is an impossibility. The Acting Commissioner may 
be going in doing a mea culpa, may be going in and saying, ``We are 
going to make some changes,'' but they are temporary. They will not 
last. We get this every few years we go through this cycle. They 
cannot, because while the vast majority of folks who work with the IRS 
are good and honorable people, they are caught in a system that is 
impossible to administer. They could not, even with $5 billion, billion 
with a ``B'',

[[Page H8040]]

develop a computer system to handle this whole tax system. How in the 
name of the good Lord could they ever come up with a system that is 
going to ensure that these kinds of abuses do not occur in the future? 
They cannot.
  When you have 5\1/2\ million words in the tax system administered by 
113,000 people that have such great discretion over their 
interpretation of those rules, when you have 535 people in Congress 
meddling in this, and by the way, I would point out that we do our 
share to make this system worse. During the decade of the 1980's, 
Congress changed the tax law 100 times. The 1986 tax reform alone added 
100 new forms to the tax system. And even the things that we did this 
summer which were good, they were tax cuts, Money magazine says one 
alone, capital gains changes we made, will add 37 new lines to the 
capital gains form.
  So when we have got all this activity going on, who loses? The 
taxpayer. The system will never change. The IRS Commissioner can be 
doing this in good faith, saying, ``We are going to try harder.'' It 
will not work. It is doomed to failure. I predict that if 50 percent of 
Americans today are seeking help filling out their tax forms, within 
the next 2 years, that number will rise. It will be 51 or 52 percent. 
More Americans will be upset with the system.
  The only solution is the solution that moves this country forward to 
give ourselves a better future, to open the opportunity for the next 
millennium to be better, the next 100 years in this Nation's history 
better than the last 100 years. As we enter the next millennium, the 
next 1,000-year cycle, would it not be wonderful to do so with a new 
system of taxation in this country?
  We began the early years of this century putting in place the current 
Internal Revenue system, about 1913. My bill will sunset it on the last 
day of this century. We would have begun and ended this century with 
the Internal Revenue system we have today, and we can begin the next 
century with the new approach.
  The logical question is: What approach do I favor and the sponsors, 
the 47 of us who sponsored this legislation in the House, H.R. 2483? 
Some of us make choices and take sides in the debate: Should it be a 
sales tax or flat-rate income tax or any other tax? I do not. I think 
any system, just about any system, is better than the one we have 
today.
  H.R. 2483 sunsets the code effective December 31, 2000, protects 
Social Security and Medicare. We do not touch the funding of those two 
systems. But it gives the American people an opportunity that is all 
too rare in this country, one that we are trying to do more of in this 
new Republican-dominated Congress: Give them, the American people, our 
employers, the opportunity to be involved in changing the tax system.
  I am excited about this. I think this is an opportunity for the 
Members of this House and of the other body to look at the American 
people and say, we are going to shoot the gun to begin the race. We set 
the goal line down there, but we are going to let you determine how 
that race is run.
  We want the American people to come forward with their ideas on 
reforming, fundamental reform of the Tax Code. We want their ideas on 
whether they support a flat-rate income tax, a national sales tax, or 
some other form of taxation. But the important thing is beginning this 
debate and this race.
  I am hopeful that this Congress will consider H.R. 2483 and our 
Senate companion bill this year. If we do so, that will give us 3 years 
to involve the American people in this dialog on the fundamental change 
we want to undertake. It will also give us 3 years to ponder what kind 
of country do we want moving into the next century.

  Do we want one that is driven by Washington-mandated dictates? Do we 
want one where we in this Congress or bureaucrats or Federal agencies 
determine outcomes for our families or our businesses or our futures? 
Or, on the other hand, would we rather have a system of taxes that 
allows the greatness of this country to flow from the American people, 
not from Washington, DC? Will we want a Tax Code that allows 
entrepreneurs and small businessmen and women to achieve all the 
success they want in their lives? Will we have a system that will allow 
people to employ their friends and their neighbors and relatives and 
people down the street in their businesses, creating more hope and 
growth and opportunity across the country?
  I think that this issue of fundamental sweeping tax reform, setting 
aside the current Tax Code with a new system of fairness, combined with 
our effort to balance the budget and to stay the course on controlling 
wasteful Washington spending, these will give my little 16-month-old 
daughter Suzie and children across this country like her the 
opportunity to live and work in what will again be in the next century 
the great Nation that we have been in this century.
  There are many other challenges we are going to face as a country. If 
we can solve problems like the deficit that we have been running up, 
address the debt issue, which the gentleman from Wisconsin [Mr. 
Neumann] in this Chamber is working so tirelessly to do in his 
legislation to be able to pay down our Nation's indebtedness so we are 
not burdening the future generations with that indebtedness that we are 
running up today, and if we can fundamentally change this Tax Code, 
throw it out, come up with a system that unleashes the greatness of 
this country, I think the best days of this Nation are truly ahead of 
us.
  I look forward to working with my colleagues as we see this issue to 
fruition.

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