[Congressional Record Volume 144, Number 75 (Thursday, June 11, 1998)]
[Extensions of Remarks]
[Page E1120]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


INTRODUCTION OF TAX SIMPLIFICATION LEGISLATION STATEMENT OF MR. NEAL OF 
                             MASSACHUSETTS

                                 ______
                                 

                          HON. RICHARD E. NEAL

                            of massachusetts

                         HON. CHARLES B. RANGEL

                              of new york

                    in the house of representatives

                        Thursday, June 11, 1998

  Mr. NEAL of Massachusetts. Mr. Speaker, Congressman Rangel and I are 
introducing legislation to help taxpayers. In the next few months, both 
the House and Senate will vote on legislation to sunset the tax code by 
2002. Instead of engaging in rhetoric and unrealistic solutions, I 
think we should be working on legislation that simplifies our intricate 
tax code. We should not be wasting time on an unworkable proposal to 
repeal the current system.
  Today, we are introducing legislation which would make the 
calculation of individual taxes that require complicated calculations 
simpler. This legislation would replace two worksheet schedules with a 
total of 19 lines and replace with them with one line.
  This legislation simplifies the individual income tax by repealing 
the adjusted gross income (AGI) limitations on itemized deductions and 
the personal exemption. Under current law, personal exemptions are 
reduced by 2 percent for each $2,500 by which the AGI of the taxpayer 
exceeds $181,000 for joint filers and $121,200 for single filers. If an 
individual's adjusted gross income exceeds $121,200, certain otherwise 
allowable deductions are reduced by the lesser of 3 percent of the 
excess of adjusted gross income over the applicable amount, or 80 
percent of the itemized deductions otherwise allowable for the tax 
year.
  This legislation repeals the complicated provisions described above 
and replaces them with an additional income tax of 1.59 percent. The 
bill simplifies the calculation of current phaseouts and removes the 
marriage penalty of these provisions.
  In order to remove the marriage penalty the new additional income 
will affect individuals with lower AGI in order to remove the marriage 
penalty imposed by the provisions. The additional income tax of 1.59 
percent applies to individual taxpayers with adjusted gross income of 
$75,000 for individuals and $150,000 for joint filers. These thresholds 
are indexed for inflation. This additional tax does not apply to 
estates or trusts. This legislation is effective for taxable years 
beginning after December 31, 1998.
  This legislation is revenue neutral. The purpose of this legislation 
is to make it easier for individuals to compute their taxes and to 
remove unfair marriage penalties included in phaseout provisions.
  I urge my colleagues to join us in sponsoring legislation to simplify 
the tax code. Instead of talking about strapping the tax code, we 
should be taking concrete steps to simplify it. This legislation builds 
upon other legislation offered by Democratic Members of the Committee 
on Ways and Means. These bills address complexity of the code in areas 
such as the individual AMA and capital gains.
  I look forward to working together to reduce the complexities of our 
current code. I urge you to consider cosponsoring this legislation.

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