[Congressional Record Volume 144, Number 11 (Thursday, February 12, 1998)]
[Extensions of Remarks]
[Pages E161-E162]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 NATIONAL RETAIL SALES TAX ACT OF 1997

                                 ______
                                 

                           HON. BOB SCHAFFER

                              of colorado

                    in the house of representatives

                      Thursday, February 12, 1998

  Mr. BOB SCHAFFER of Colorado. Mr. Speaker, I rise today to speak on 
one effort

[[Page E162]]

Congress should fully consider which promises to bring true tax relief 
for all Americans.
  There is no such things as a good tax.
  Will Rogers once said, ``The income tax has made liars out of more 
Americans than even golf.'' Those who are most familiar with the 
Internal Revenue Service, the agency charged with enforcing the income 
tax code, agree.
  Former IRS Commissioner Fred Goldberg said, ``The IRS has become a 
symbol of the most intrusive, oppressive and non-democratic institution 
in our democratic society.'' Former Commissioner Shirley Peterson 
concurred, ``we should repeal the Internal Revenue Code and start 
over.''
  Indeed, this is the principle objective of the National Retail Sales 
Tax Act of 1997 (H.R. 2001), which has been introduced in Congress by 
my Colorado colleague and good friend U.S. Representative Dan Schaefer. 
The plan is predicated upon the repeal of the Constitution's Sixteenth 
Amendment, which was ratified in 1913 and gave Congress, for the first 
time, power to impose an income tax.
  Income taxes and the IRS would be replaced with a 15 percent federal 
sales tax on the final purchase of goods and services at the retail 
level. The rate would decline in future years to 10 to 12 percent as 
economic growth allows more revenue to be raised at a lower rate and 
downsizing continues.
  According to Mr. Schaefer's plan, no income would be taxed until it 
is consumed. Capital gains and interest income would not be taxed as 
long as that income is reinvested. Deductions would no longer be a 
relevant concept under a sales tax. Taxpayers, not the government, 
would get first crack at their paychecks.
  Any business required to collect and remit the sales tax would keep 
0.5 percent of tax receipts to offset federal compliance costs, and 
nothing used to directly or indirectly produce a good for retail 
consumption would be taxed. The burden of proof would lie with the 
government in any dispute with a taxpayer.
  Mr. Schaefer's plan also includes a personal consumption refund to 
ensure that the basic necessities of life remain tax free. Every wage 
earner would receive a refund equal to the sales tax rate multiplied by 
the poverty level (adjusted for the number of dependents claimed) in 
every paycheck. As a result, every wage earner will earn up to the 
poverty level tax free.
  Though there are several other relevant provisions of the plan, 
perhaps its biggest appeal is the elimination of the IRS and the need 
to file tax returns. This year, taxpayers will spend well over $600 
billion in accounting, legal, and processing costs, and 5.4 billion 
hours just to complete their tax forms.
  These costs, along with the cost of income taxation itself, are 
currently passed along to consumers concealed in the purchase price of 
all goods and services, including food, medical supplies and housing. 
Moreover, the graduated income tax punishes economic success, and 
discourages investment.
  No one should be led to believe that the National Retail Sales Tax 
Act will ever make taxpaying a pleasant experience. After all, no one 
is proposing to abolish taxation.
  Mr. Schaefer is, however, the first to acknowledge that his proposal 
requires much more discussion and he anticipates many more revisions. 
He points out though that just about any criticism that applies to his 
plan doubly applies to the current income tax structure. But as to the 
sales tax, there are just far fewer of them.

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