[Congressional Record Volume 145, Number 113 (Wednesday, August 4, 1999)]
[House]
[Pages H7238-H7239]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              THE TAX BILL

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from California (Mr. Sherman) is recognized for 5 minutes.
  Mr. SHERMAN. Mr. Speaker, there has been a lot of partisan talk about 
the tax bill, and I can understand it. A bill of $800 billion, 
exploding to $3 trillion in the second 10 years, does indeed put our 
economy at risk. A bill that says lock up the Social Security money for 
Social Security but then take every bit of the regular general surplus, 
or virtually all of it, and pay that out as tax cuts. Regardless of 
whether that surplus actually arises, pay it out, lock it into the law. 
That could be regarded as fiscally irresponsible by many of us on the 
Democratic side of the aisle.

                              {time}  2320

  And of course, there are many partisans who would recognize that if 
we do not use the opportunity to pay off the debt now while the baby-
boomers are in their peak earning years, that when the baby-boomers 
retire, there will not be any capacity to use general fund revenues to 
help make Social Security last through its most challenging demographic 
era and that as a result we will hear the cries at the first economic 
hiccup for cuts in Social Security or increases to FICA taxes.
  Yes, indeed, with all that fiscal irresponsibility and all that risk 
to the Social Security system, some Democrats decry the bill in the 
most partisan terms. But do my colleagues know, we should not just 
decry the bill. Because as a tax lawyer, I was just amazed by it as I 
read each provision.
  How is it that they could write a tax bill giving 45 percent of the 
benefit to only one percent of the people in the country? We should not 
decry the bill.

[[Page H7239]]

 We should be impressed by its draftsmanship.
  Let us talk about some of the amazing provisions of this bill. This 
is a bill that turns to 50 million Americans at the base of our 
economic pyramid and says they get a tax cut of 8 cents per day per 
family. Split it up at the breakfast table, all 8 cents a day. Of 
course, a tax cut of over $54,000 a year to each family in the top one 
percent.
  So how are they able to achieve such a dramatic result? One example, 
they take and give to American companies that shift jobs overseas 60 
times the benefits that they provide to 50 million Americans. They do 
this by changing the interest allocation rules so that those companies 
that make equity investments abroad, that is to say build factories in 
other countries and while perhaps closing them down in the United 
States, benefit. They get huge tax breaks.
  Whereas, it is 8 cents a day for the working poor and for the lower 
middle class in the United States.
  But when we get to the details, there are some other provisions that 
are almost as striking. For example, there is a list of special deals 
for the oil companies, such as allowing a 5-year carry-back of NOLs 
while the rest of the business world only gets a 3-year carry-back, 
suspending the 65 percent taxable income limitation on the use of 
percentage depletion, allowing geological and geophysical cost to be 
deducted current, while good accounting practice calls for those costs 
to be capitalized; allowing delay rentals to be deducted currently, 
when the proper accounting for them is to be capitalized; and modifying 
the refining threshold in section 613(d)(4) so that integrated oil 
companies can get the benefits previously reserved for independent oil 
companies and wildcatters.
  And here is a special deal for oil where they get twice the benefit 
of all of the benefits that we give to 50 million Americans goes to 
just a few American oil companies and that they get a tax credit for 
the money they pay to Saudi Arabia and Kuwait for taking the oil out of 
those desert sands. They get reimbursed for what they spend for the oil 
that they then sell to us.
  Mr. Speaker, as 20 years as a CPA and 2 years as a tax judge, I know 
tax fraud when I see it; and this Republican tax bill indeed is tax 
fraud. It is a giant shift of wealth to the wealthiest one percent of 
Americans. We should reject it.

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