[Congressional Record Volume 149, Number 57 (Wednesday, April 9, 2003)]
[House]
[Pages H3004-H3009]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 EXPRESSING SENSE OF CONGRESS REGARDING REFORM OF INTERNAL REVENUE CODE

  Mr. THOMAS. Mr. Speaker, I move to suspend the rules and agree to the 
concurrent resolution (H. Con. Res. 141) expressing the sense of the 
Congress that the Internal Revenue Code of 1986 should be fundamentally 
reformed to be fairer, simpler, and less costly and to encourage 
economic growth, individual liberty, and investment in American jobs.
  The Clerk read as follows:

                            H. Con. Res. 141

       Whereas the Internal Revenue Code of 1986 is overly 
     complex, and imposes significant burdens on individuals, 
     businesses, and the economy;
       Whereas the complexity of the Internal Revenue Code of 1986 
     makes the Code extremely difficult and costly to administer 
     and to comply with;
       Whereas recent reports estimate that 1 in 4 Americans are 
     out of compliance with the Code and that the Internal Revenue 
     Service provides the wrong answer nearly half the time 
     through its telephone information program;
       Whereas in 2001 the Internal Revenue Service spent 
     $8,900,000,000 to administer the current system while 
     American taxpayers spent an estimated $135,000,000,000 and 
     3,000,000,000 hours, more than a full day for each return, to 
     comply;
       Whereas the Code imposes multiple layers of taxation and 
     hides the true cost of taxes in the price of goods and 
     service;
       Whereas the Code penalizes investment, discourages the flow 
     of capital into our domestic economy, drives businesses to 
     consider moving investment and jobs to foreign locations, and 
     disadvantages domestically produced goods and services in 
     international markets;
       Whereas the Code disincentivizes work, savings, and 
     investment by individuals and families;
       Whereas the Code is riddled with decades of loopholes, 
     special interest exemptions, and contradictions which make 
     the Code confusing, costly, and unfair;
       Whereas the Department of the Treasury estimates that 
     approximately $70,000,000,000 in taxable income remains 
     untaxed in off-shore accounts;
       Whereas on April 13, 2000, the House of Representatives 
     passed, by a vote of 229 yeas and 187 nays, House Resolution 
     4199, calling for replacement of the Internal Revenue Code 
     not later than December 31, 2004; and
       Whereas the most recent Economic Report of the President 
     states that ``the current tax system also causes households 
     and businesses to rearrange their affairs in a number of ways 
     that make poor use of economic resources, leading to 
     substantial economic waste and, ultimately, reducing real 
     incomes'': Now, therefore, be it
       Resolved by the House of Representatives (the Senate 
     concurring), That the Congress--
       (1) encourages and supports a national debate on 
     fundamental reform of the Internal Revenue Code of 1986;
       (2) agrees with the most recent Economic Report of the 
     President which identifies reducing complexity, improving 
     economic incentives, and achieving fairness, as key 
     objectives of fundamentally reforming such Code; and
       (3) as part of this national debate, will begin a series of 
     hearings to examine the case for, and the possible options 
     for, fundamental reform of such Code.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California (Mr. Thomas) and the gentleman from Washington (Mr. 
McDermott) each will control 20 minutes.
  The Chair recognizes the gentleman from California (Mr. Thomas).
  Mr. THOMAS. Mr. Speaker, I yield my time to the gentleman from 
Georgia (Mr. Kingston), sponsor of the concurrent resolution, and ask 
unanimous consent that the gentleman from Georgia control the balance 
of the time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. KINGSTON. Mr. Speaker, I yield myself such time as I may consume.
  I rise today as millions of Americans are spending billions of 
dollars and countless hours trying to comply with the monster we call 
the IRS code. We all know it is that time of year when we should have 
done what we promised last year, that we would even do it in mid-
January; but somehow all the stuff that we need did not come in the 
mail, the dividend accounts and all the data that we need, and we know 
we are supposed to put it together, but we just do not do it. So we 
postpone it. And now here we are almost on April 15, that dreaded day 
on the American calendar that we all have to pay our income tax, and we 
just cannot stand it.
  So all over the country right now people who would rather be doing 
other

[[Page H3005]]

things are trying to figure out how much do I owe my favorite Uncle 
Sam. And they are sitting around trying to fill out these forms, and 
they cannot do it, and so many times they have to go to an accountant 
or a lawyer to get opinions, and it is even said often when one goes to 
two or three different accountants or lawyers and give them their tax 
information, usually they will come up with a different number which 
one needs to pay. So that is confusion even on the experts' part.
  But in 2001 the American taxpayer spent over $135 billion just trying 
to comply. I want Members of Congress to think for a minute what would 
we do if we had another $135 billion in the budget that we could use 
for education or for Medicare, for health care, for the war effort, for 
rebuilding Iraq or Afghanistan or so many other things. The irony is it 
is certainly not our money. It is the taxpayers' money, and we would 
not even be entitled to that money. It would be $135 billion in the 
economy that consumers would control; but, instead, it is, in fact, a 
hidden tax because if I have to spend $200 or $300 on an accountant 
figuring out what I owe Uncle Sam, then that $200 or $300 is a 
mandatory payment of taxes.
  We spend over 3 billion hours filling out form. That is 1 full day 
for every single tax return. I was giving a speech the other week to a 
leadership Georgia group about volunteerism and was proud to report 
that there are something like 94 million Americans who volunteer 4 
hours a week, and it is worth millions and millions of dollars and 
billions of dollars to the economy if we figure it at $14 an hour. But 
the reality is these 3 billion hours do not help children. They do not 
help dropouts. They do not help confused pregnant teenagers. They do 
not help senior citizens and all the other groups who could use some 
volunteer labor. It just goes to Uncle Sam. The IRS itself spent $10 
billion just trying to enforce this very complicated system.
  Mr. Speaker, I reserve the balance of my time.
  Mr. McDERMOTT. Mr. Speaker, I yield myself such time as I may 
consume.
  This is, as I said, the second act in the Republican tax follies. 
This is the one that is the longest-playing act in this town. They have 
been talking about tax simplification since they took over. Since 1997 
to today, they have added 293 Tax Code provisions that required 515 
rule changes, that everybody has to understand they have added 2 hours 
to filling out their tax form every year. By 2010 there are going to be 
35 million people who are going to have to figure their tax twice 
because of the alternative minimum tax. So these are the people who say 
we want tax simplification, and they come out here every year and add 
more complexity to this whole business.
  I read this resolution. It says one out of four taxpayers are not in 
compliance with the tax laws. The facts are that wage earners, the 
ordinary citizens of this country, 98 percent of their income is 
reported and 85 percent are in complete compliance with the law. The 
former IRS Commissioner, Mr. Rossotti, said in his departure speech, 
the most serious noncompliance areas are promoters of tax schemes of 
all varieties, the misuse of devices such as trusts and offshore 
accounts to hide or improperly reduce income.
  The average guy working in an automobile plant is not setting up a 
trust, does not have any money invested offshore. He is not using 
abusive corporate tax structures. He is not underreporting, as high-
income people do, and the accumulation of failure to file and pay a 
large amount of employment taxes, these are the people who are not in 
compliance with the law. The average taxpayer has been waiting for that 
taxpayers' bill of rights they have been promising them. And of course 
the Republicans fell to fight among themselves upon that issue; so they 
could not even bring that out here. They have been promising it for 
weeks and weeks and weeks, and it ought to come out. April 15 is almost 
here. But, no, they are going to bring this foolishness out here.
  This reminds me of that story of the Methodist minister who was sick 
and they had a board of deacons meeting come together and they had a 
long discussion about what they should do about the minister's illness. 
Finally, by a vote of four to three with 25 abstentions, they voted to 
write a letter to the minister urging him to get well. This is a get-
well letter to the tax structure from the people who make it 
complicated.
  Why do you not stop putting this nonsense out here? We have had 
Speaker and Committee on Ways and Means chairman after Speaker and 
Committee on Ways and Means chairman talk about the fact that we are 
going to have a simpler tax structure. I remember Mr. Armey, we are 
going to pull it up by the roots. You have never put a single bill out 
here. Eight years of talking and sending these letters urging the tax 
structure to get well. Come on, guys. Let us stop this nonsense.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1830

  Mr. KINGSTON. Mr. Speaker, in the spirit of what my friend from 
Washington had requested, I yield such time as he may consume to the 
gentleman from Georgia (Mr. Linder), to explain a solution to the 
problems of the onerous Tax Code.
  Mr. LINDER. Mr. Speaker, there is simply no doubt that what we are 
talking about is follies, but the follies are a 45,000-page Tax Code. 
The Internal Revenue Code has made criminals of us all, and it is time 
for it to go away.
  There is a bill replacing the current code, H.R. 25, that would 
abolish the entire IRS and all the Internal Revenue Code and replace it 
with a simple, straightforward retail sales tax.
  We have spent $22 million in the last 7 years with economic and 
market research, and a study out of Harvard says, Dale Jorgenson, who 
was at the time the head of the Economics Department at Harvard, 
concluded that, on average, 22 percent of what you pay for at retail is 
embedded costs to the current code, which is to say you pay every 
company that has touched that product, their payroll taxes, their 
income taxes and their accountants and attorneys to avoid the taxes.
  It has been estimated that in 2001 Americans spent $250 billion just 
complying with the code, and that was only the estimate of the man-
hours it would take to fill out the paperwork. That did not include the 
tens or maybe hundreds of billions of dollars that corporate America 
spent just calculating the tax implications of a business decision. And 
in 2001, after spending a couple of hundred billion dollars complying 
with the code, corporate America sent in to the government $187 
billion. This is not an efficient system for gathering revenues.
  We need to start with a truth: There is not a mechanism for a 
business to pay a bill other than through price. The only way to pay 
the light bill, the labor bill and the tax bill is through price, and 
your customers pay it; and the only taxpayers in the world are 
consumers, who actually consume the product and all the embedded costs 
therein.
  So if we have a price system that has a tax component that is 22 
percent of the price system, we ought to fix it. If you abolish the 
code and replace it with an embedded 23 percent, your cost of living 
goes up 1 percent, but you get to keep your whole check. Nothing is 
taken out for payroll taxes or income taxes, and every American becomes 
a volunteer taxpayer, paying taxes when they choose, as much as they 
choose, by how they choose to spend.
  We also have a provision in the bill that would rebate to every 
household, rich or poor, we are not going to know how rich they are, we 
are not going to have that number; it would rebate to every household a 
check at the beginning of every month sufficient to rebate the entire 
tax consequences of spending up to the poverty line. For a household of 
one, that is $9,500 a year. For a household of six, it is about $30,000 
a year, which is to say, a household of six could spend $30,000 with no 
tax costs at all.
  If you get the tax component out of the price system, you increase 
the purchasing power of everyone at or below the poverty line by 22 
percent.
  What will happen to our economy? We have studies that say the exports 
go up 26 percent in the first year. We have studies that say capital 
spending goes up 78 percent in the first year. We know a study taken 
from 1945 to 1995 shows that real take-home wages increases in exact 
correspondence with

[[Page H3006]]

increases in capital spending, because it makes them more productive 
and they get to take home the money.
  When Bill Archer was here and chairing the Committee on Ways and 
Means, he had cited many times a study done by Princeton Econometrics 
of 500 European and Japanese international firms, and the question was 
asked to their leadership, what would you do in your long-term planning 
if America eliminated all taxes on capital and labor and taxed only 
personal consumption? Eighty percent said they would build their next 
plant in the United States. Twenty percent said they would relocate to 
the United States.
  We have been bickering about companies relocating their mailboxes 
overseas to save taxes. Some years ago we complained about rich people 
moving to Ireland and giving up their citizenship. Those people would 
be flocking to our shores. We would have a problem finding workers for 
all the manufacturing jobs.
  It is time for us to take a hard look at what we have created. The 
tax we have today is the flat tax on incomes, 90 years later. It 
started out at a single rate on the upper 2 percent, and look what it 
has become.
  We ought not worry about punishing people who are successful. They 
are going to spend more money and they are going to pay their share. 
The single biggest reason people escape the Tax Code is bankruptcies, 
and quite frankly, they can still bankrupt. But if they buy a loaf of 
bread, they are going to pay for their share of government.
  We do not know how large the underground economy is. We simply do not 
know. But if you want to see it, go to your regional banker any Friday 
afternoon at 4 o'clock and watch the contractor come out and pay off 
his subs in cash, and every banker in America will come out and shake 
his head and agree with that.
  This simplified, voluntary tax system would raise the same revenues 
as the current system, but more important than anything else, it would 
make every taxpayer a voluntary taxpayer, and it would give every 
American in a free society the privilege of anonymity. No one should 
know as much about us as we know about the American citizens. No one 
should know that.
  So this is not pie in the sky. There is a proposal that would replace 
the current system. It has been looked at by economists all over the 
country. It has been looked at by people in the last administration 
favorably and in the current administration favorably, and we just need 
to take the huge step to make it happen.
  To those who are concerned about who pays, the rich or poor, let me 
say that the bill that is going to come due on the young working 
generation is the payroll tax. It is going to eat up working America, 
and this fixes that. It removes the payroll tax and collects the money 
out of the sales tax. It saves Social Security in 13 years by doubling 
the revenues to those categories by just doubling the size of the 
economy.
  Last, let me say to my liberal friends, this is a tax on accumulated 
wealth. You ought to love this. Because if you paid taxes on the money 
you earned and you paid taxes on the capital gains when you sold the 
business and you paid taxes on the interest you earned, we are going to 
tax you one more time when you spend it.
  Last, to those who have accumulated wealth, it is simply this: You 
are already paying this. It is just hidden. You are already paying this 
tax. Let us make it honest. Let us have a tax system that is fair, that 
is understandable, that is voluntary, that is neutral between 
industries, neutral between businesses and neutral at the border. The 
fair tax does it, and this is a great opportunity to talk about it.
  Mr. McDERMOTT. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, before I yield to my colleague from Massachusetts, I 
would point out that the gentleman from Georgia has introduced a bill 
called the Fair Tax Act. We submitted it to the Joint Committee on 
Taxation, that is a joint House and Senate committee, everybody agrees 
that it is balanced, Democrats and Republicans and all that sort of 
thing, and they came up with the fact that this flat tax that we are 
talking about here, the rate would have to be at 59.5 percent.
  That means if you buy a Coke, suddenly the Coke is $1.60. If you buy 
a hamburger and it is $2, you are going to have to pay $3.20 for that 
hamburger. This goes onto health care, this goes onto pharmaceuticals, 
it goes onto everything, not just things you just choose; that is, 
everything you buy, you have to pay 60 percent taxes.
  Mr. LINDER. Mr. Speaker, will the gentleman yield?
  Mr. McDERMOTT. I yield to the gentleman from Georgia.
  Mr. LINDER. Mr. Speaker, would the gentleman admit that the Joint Tax 
Committee made presumptions and assumptions that the bill would not 
pass as written, and so they changed it to the way they thought it 
would pass and changed the numbers entirely?
  Mr. McDERMOTT. Mr. Speaker, reclaiming my time, no, I would not admit 
that at all. This is the letter they put out, and they are standing by 
this.
  Mr. LINDER. They also presumed the bill would not pass as written.
  Mr. McDERMOTT. Mr. Speaker, reclaiming my time, I know, you fired the 
lady that wrote this. You got rid of her. So I know that that is 
probably why you got rid of her.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Massachusetts (Mr. Neal).
  Mr. NEAL of Massachusetts. Mr. Speaker, I thank the gentleman for 
yielding me time.
  Mr. Speaker, I do not know if this is more this evening about amnesia 
or cranking out a press release for April 15. When you listen to these 
folks, they talk about changing the Tax Code. They have now been in 
charge since 1994. We are no closer to changing the Tax Code today than 
we were in 1994. But we were told we were going to pull the Tax Code up 
by its roots, we were going to drive a stake into the heart of the Tax 
Code, we were all going to a long funeral procession for the Tax Code.
  Well, this resolution today is like their commitment to term limits: 
You hope that the public is not watching, and you change your position 
on the issue.
  We have an opportunity to do something real about the Tax Code, and 
we could do it tomorrow, and everybody on the other side knows it, 
because I share their late-stated interest in closing tax loopholes.
  I filed a bill last year that would close the most egregious tax 
loophole that confronts the American people, and that is for those U.S. 
corporations who claim their headquarters are really in Bermuda so they 
can avoid paying U.S. income taxes.
  Well, my bill has languished for a whole year despite the fact we 
have had 186 signatures last year on a discharge petition, 125 
bipartisan signatures this year on the bill, and they do not seem to 
think that there is any speed with which they can act.
  Let me give a few names tonight. Here are some of the corporate 
expatriates who are taking advantage of the Bermuda loophole: Tyco, 
they avoid paying $400 million a year in U.S. taxes; Ingersoll-Rand, 
$40 million a year in U.S. taxes, and by the way, walk outside and see 
the machinery that says Ingersoll-Rand on it, where they win contracts 
with the Federal Government while our troops are overseas in Iraq, and 
they will not pay their fair share of income taxes while they win these 
contracts; Cooper Industries, $55 million a year in U.S. taxes they 
avoid. How about Weatherford, $40 million a year in U.S. taxes?
  The Joint Tax Committee scored my proposal. We save $4 billion over 
10 years if they would enact an opportunity to close the Bermuda tax 
loophole.
  We hear the majority tonight that is concerned about a code that is 
riddled with decades of loopholes, but we cannot close this one?
  We are going to vote tomorrow on an energy bill which cleverly 
includes a protection for a loophole. I mentioned earlier there are 
many who exploit this $4 billion loophole, but in fact, tomorrow, in 
that energy bill, they are going to grandfather a whole element that is 
left, and they think they are doing it in the disguise of tax reform.
  The Treasury Department estimates that $70 billion a year in taxable 
income remains untaxed in offshore accounts. Sound familiar? Of course, 
this is what I and 125 Members of this body think we should be 
addressing. But instead we get a meaningless resolution

[[Page H3007]]

and a bill to cement the loophole into law on the same day. Oddly 
enough, one of those expatriates, by the way, and listen to this one, 
listen to this one, they currently hold a $50 million contract with the 
IRS to help the IRS collect taxes from the rest of us.
  Mr. Speaker, the American taxpayer deserves better. There is no 
reason on Earth why that Bermuda tax bill is not on this floor in front 
of the American people for an up-or-down vote.
  I would suggest this to you tonight: If they put that bill on the 
floor, there will be a rampage to get to the well to vote for this 
measure, and there will be at least 300 votes in this House if the 
Republican leadership would let the bill come up.
  Close the Bermuda tax loophole.
  Mr. KINGSTON. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I just want to say, if we could get rid of the current 
Tax Code, we could get all those companies back.
  Mr. Speaker, I yield 3 minutes to the gentleman from Texas (Mr. 
DeLay), the distinguished majority leader.
  Mr. DeLAY. Mr. Speaker, I might say to the gentleman from 
Massachusetts, that he is making our case for us. The reason that all 
these companies are leaving our shores is because the Internal Revenue 
Code is unfair, it is incomprehensible, it is broken, and it needs to 
be fixed.

                              {time}  1845

  Since 1955, the text of the Internal Revenue Code has increased 472 
percent to nearly 1 million words. The Code costs almost $9 billion for 
the IRS to administer, and it costs Americans more than 5 billion hours 
and $244 billion just to comply with it.
  For some perspective, let us consider those numbers amount to 2.7 
million people or five full congressional districts working full-time 
just to fill out the paperwork for the IRS. It taxes income when it is 
earned, spent, invested, and even after death when it is left to loved 
ones. All of these factors slow down our economy, wasting the valuable 
time of the American people.
  In short, our Tax Code is a giant, ugly mess that only a jumble of 
lawyers, politicians, bureaucrats, and committees could love.
  We need a tax system that is fair and supportive of American workers 
and one that does not penalize people for working hard and saving for 
their family's future.
  We have taken important steps with the tax bills we have passed over 
the past 2 years, or over the past 8 years. We can take another this 
year by passing the President's proposal, including an end to the 
unfair double taxation of dividends.
  This commonsense move would simplify the law and bring us closer to 
reforming the Tax Code once and for all, and I look forward to working 
with my colleagues to finish the job.
  I just want to thank the gentleman from Georgia for introducing this 
resolution, and I urge my colleagues to support it.
  Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Cleveland, Ohio (Mrs. Jones).
  Mrs. JONES of Ohio. Mr. Speaker, I would like to thank the gentleman 
for yielding me this time, and I thank him for the opportunity to be 
heard on this issue.
  Mr. Speaker, today in our hearing before the Committee on Ways and 
Means, one of the speakers said, Well, what are you talking about? The 
Congress is the board of directors. If the Congress wanted to change 
the law, the Congress could do so. In fact, he said, we could change 
the health care issues; we could change the Medicare programs. So I am 
asking the question, Why, if we are the board of directors, are we 
``expressing the sense of Congress'' instead of doing the job of 
Congress and making a change?
  Mr. Speaker, I am clear that my constituents would say to me, keep 
the ``sense,'' meaning S-E-N-S-E, and give me a prescription drug 
benefit for senior citizens. Keep the ``sense'' and fund No Child Left 
Behind. Keep the ``sense'' and improve our economy. Keep the ``sense'' 
and maybe all the money that we are talking about that is collected by 
the IRS could, in fact, pay for the war in Iraq, pay for the fact that 
there are seniors out there who need a prescription drug benefit, pay 
for the fact that their children, the best investment we can make in 
this country that will pay for generations and generations and 
generations, we ought to do that.
  I want to respond just on one thing. I have been a vocal advocate for 
not allowing the dividend tax cut, and the reason I have been an 
advocate is because the dividend tax cut will have a significant impact 
on low-income housing. And while we are talking about low-income 
housing, keep the ``sense'' and build enough housing so people can, in 
fact, have a safe place to live in a decent neighborhood with their 
families.
  Mr. KINGSTON. Mr. Speaker, it is my proud opportunity to introduce 
the gentleman from Indiana (Mr. Chocola), and I yield 2 minutes to him. 
He is one of our distinguished freshman Members.
  Mr. CHOCOLA. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, I came to Congress from the business world; and I would 
like to share briefly a real life experience, a real life story on the 
implications of our Tax Code. The smartest person I ever met in my 
business career was a man named Gerry Shivers. Gerry Shivers is an 
accountant. He works for a big accounting firm in New York, and every 
time our business ever even thought about entering into a transaction 
of any kind, we would have to call Gerry Shivers up on the phone and 
ask him, how do we comply with the more than 17,000 pages in our 
Internal Revenue Code. Every time we called him, it cost us thousands 
and thousands of dollars. Instead of paying those thousands of dollars 
to Gerry Shivers, we could have been investing in new equipment, we 
could have been investing in research and development, we could have 
been investing in our markets, and we could have been creating jobs.
  So, Mr. Speaker, it is time that we give Gerry Shivers a new job. It 
is time that this very intelligent man has a more productive life in 
our economy. It is time to simplify the Tax Code that no one truly can 
understand and comprehend, and it is time to put the billions and 
billions of dollars we spend every year on these costs to building our 
economy and creating jobs.
  Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from 
California (Mr. Sherman).
  Mr. SHERMAN. Mr. Speaker, I was just down here because the next bill 
is one I am managing dealing with Cyprus and international relations; 
but in a former life, I headed the second largest tax agency in the 
country, and that is why I thank the gentleman from Washington for 
yielding me this time this evening.
  This resolution calls for a fundamental review of our tax system; but 
no speaker has mentioned the most unfair, egregious, and unproductive 
tax of all, and that is the debt tax. Tomorrow, we will bring to this 
floor a budget resolution which will put us on target and may even be 
honest enough to express this in exact numbers, to tell us that we are 
on target for an $11 trillion Federal debt. Imagine the effect that has 
on our economy. Imagine the effect that has on interest rates and on 
what our children will be paying one way or another. Surely we should 
close the Bermuda loophole.
  But what concerned me most was when the majority leader himself came 
down here and addressed the issue of those U.S. corporations that want 
to contract and do business with our Federal Government while renting a 
hotel room in the Cayman Islands and claiming to live there. He came 
here to justify and protect and court and woo those tax trader 
corporations back to the United States with a plan; and that plan, as 
the gentleman, I believe from Washington, pointed out is to tell 
working people that when they buy a $1 can of cola, they should pay an 
extra 60 cents so that the corporations do not have to pay anything so 
that they can come back from the Cayman Islands. I welcome in depth 
congressional hearings on such proposals.
  Mr. KINGSTON. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Burgess).
  Mr. BURGESS. Mr. Speaker, I thank the gentleman from Georgia for 
yielding me this time.
  Mr. Speaker, Albert Einstein once said, ``The hardest thing in the 
world to understand is the income tax.'' If we look at today's Tax 
Code, it is easy to

[[Page H3008]]

see his genius. The cost of the current income tax system in both time 
and dollars is just too high.
  Consider this: each year Americans spend 6.1 billion hours preparing 
their tax forms, and businesses spend 800 million hours complying with 
the Tax Code. In 2001 alone, Americans lost $183 billion in opportunity 
costs which were calculated at $30 an hour. Those are costs that people 
spend working on taxes instead of working on money-producing activities 
for themselves.
  Two-thirds of Americans think the income tax system is too complex. 
We need a simpler system for all Americans to understand. Taxpayer 
phone calls to the IRS help line doubled during the 1990s from 56 
million to 111 million, even though the number of taxpayers only grew 
by 12 percent.
  The Federal tax rules are over 45,000 pages in length, which is 
double the number of pages since the 1970s, including the full Tax 
Code, the IRS rules and regulations, and tax court rulings. The average 
taxpayer spends over $1,800 per household in compliance costs. In other 
words, that taxpayer must work 6 days per year just to pay for the cost 
of preparing his or her taxes for that year.
  Valuable resources are being lost to taxes, resources that could be 
used for productive, job-creating economic behavior, or for spending 
time with our families. As my colleagues can see, the costs imposed by 
our tax system are just too high.
  Today I rise in support of H. Con. Res. 141 and strongly urge my 
colleagues to join in a national debate about the problems of our 
current tax system and the need for fundamental reform.
  Mr. McDERMOTT. Mr. Speaker, I yield myself such time as I may consume 
just to finish up.
  We have a tax structure, and we are all going to vote for this 
foolishness; and I would suggest to the Clerk of the House that you not 
throw these resolutions away, because you can just bring them out again 
next year. We will be back here at the same old place with the same old 
tired rhetoric. They will not have done anything more about this issue 
than they have this year. So I think we could at least save a little 
money by not reprinting this kind of nonsense.
  We passed a tax bill last spring; and I do not remember the exact 
figure, but something like 75 percent of the benefit went to people who 
make more than $100,000 in this country. Now, if that is a fair tax 
structure, I will be darned. I mean, I have to relearn the meaning of 
fairness. The whole idea of a tax structure is to pay on one's ability 
to pay.
  Ideas like the gentleman from Georgia (Mr. Linder), who comes out 
here with a sales tax, the idea being that we will put a sales tax on 
everybody and that will be fair. Of course, ordinary people have to buy 
food and clothes and medicine and gasoline and a whole bunch of things; 
they do not have any choice whatsoever. So they have to pay the tax. 
Rich people, well, of course, they have to buy food and gas and medical 
care and whatnot; but all of the rest of the money they earn, they do 
not pay any taxes under that kind of a structure. That is not fair. 
Everybody knows it. That is why we can never bring that thing out here 
seriously and debate it on the floor. You would get eaten alive in the 
press when the American people figured out what you are talking about.
  I know what my colleagues are doing today; they are really laying the 
groundwork for their press releases. We will all leave in a couple of 
days and you all have to have your April 15 press release: ``I voted to 
change the unfair tax structure. I was working in Washington all last 
week trying to change the unfair tax structure that is burdening my 
constituents'' and other silliness that will be in the papers.
  This is not going to do anything, everybody knows it will not do 
anything, and it is not going to make anybody do anything. We are just 
sending another letter to the minister telling him to get well.
  I see the gentleman from Wisconsin (Mr. Ryan) is here. He has a great 
chart that is too small for anybody to read, but we are going to put it 
up anyway; and we will go through with this so we can get out of here. 
So I want the gentleman to have his press releases. Are the gentleman's 
press releases related to that?
  Mr. RYAN of Wisconsin. Mr. Speaker, will the gentleman yield?
  Mr. McDERMOTT. I yield to the gentleman from Wisconsin.
  Mr. RYAN of Wisconsin. Mr. Speaker, I will explain the chart so the 
gentleman from Washington can understand it. Even if he cannot see it, 
I will explain it all to him.
  Mr. McDERMOTT. Mr. Speaker, I thank the gentleman. I appreciate that. 
Explain it to my mother who is watching this, will you? Because she 
really wants to understand how this fair tax structure, when she is 
living on Social Security, why she has to pay a 60 percent sales tax, 
because I have no idea. For all of the people living on Social 
Security, if the gentleman from Georgia (Mr. Linder) succeeded, they 
would get a 60 percent flat tax on everything they bought. It is so 
nonsensical, I do not know how my colleagues can stand out here with a 
straight face and offer it up here.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1900

  Mr. KINGSTON. Mr. Speaker, I yield 3\1/6\ minutes to the gentleman 
from Wisconsin (Mr. Ryan) so he can explain these charts.
  Mr. RYAN of Wisconsin. Mr. Speaker, I thank the gentleman for 
yielding time to me. Mr. Speaker, these are not sales tax charts, by 
the way, I say to the gentleman from Washington. Let me explain what 
these charts do in a second.
  We are here to talk about tax reform. We are here to talk about, can 
we have a better way of raising revenue for the government without 
doing so much harm and damage to our economy, to the daily lives of 
individuals and to the businesses and job creation in this economy.
  There is an issue that is also important, not only to mention the 
fact that our Tax Code consumes so many hours of preparation, wastes so 
many trees, and the fact that it is just so large; but it also inhibits 
our competitiveness globally. Where we work on the Committee on Ways 
and Means, we are experiencing this on a day-to-day basis.
  But the point that I want to make here today, the reason we need to 
reform our Tax Code is not just to make it easier for people to keep 
more of the money they earn, but to make it simpler, to make our Tax 
Code less punitive.
  Let us take it for a fact, the Tax Code punishes all the qualities 
that make America great. It penalizes us if we get married, it 
penalizes us if we want to have kids, it penalizes us if we have a 
small business, it penalizes us if we save, it penalizes us if we 
invest, it penalizes us the more we work and the more successful we 
become. These are things we should not be penalizing in this country; 
we should be rewarding those things in America.
  Where it really is arrogant is in the fact that we are losing jobs to 
foreign trade every day in this country. When we look at our Tax Code, 
and this is what this chart goes to, if we look at the effective top 
central and local corporate rate, meaning how much do we tax businesses 
in this country, if we look at the entire industrialized world from 
Ireland on up to Japan and every other industrialized nation in the 
world, the United States has tax rates on business income that are 
higher than any other industrialized country in the world except for 
Japan. Japan is in their second decade of recession.
  If we take a look at just the tax rates on capital, and what I mean 
when I say ``capital'', that is investment, that is plant and 
equipment, that is expansion of businesses, that is capital. When we 
take a look at the tax rates on capital such as the tax rates on 
dividends, that tax rate is the second highest in the world except for 
Japan, again, a country that is in its second decade of recession.
  So when we sit here and tax capital, when we sit here and tax our 
businesses at not 20 percent, not 15 percent, but at an effective tax 
rate of over 35 percent in America, we are taxing jobs overseas.
  More importantly, what is also harmful with our Tax Code is, unlike 
our industrial competitors, we tax our income on a worldwide basis. Not 
only do we have the second highest tax rates in the world, we tax all 
worldwide income made by U.S. companies at that higher

[[Page H3009]]

rate. If you are an American company making money in Ireland, a country 
with a corporate tax rate of 17 percent, you are going to end up paying 
that U.S. tax rate of 35 percent, whereas it will be much less for 
France or England.
  Mr. Speaker, we are losing jobs because we tax our companies and 
businesses more than anybody else does. We tax them overseas. What 
happens? Foreign companies are taking over U.S. companies, pushing 
income and jobs overseas.
  We need to lower our tax rates, we need to fix our Tax Code and make 
it more efficient so we can keep jobs here at home.
  Mr. McDERMOTT. Mr. Speaker, I yield myself the balance of my time.
  The SPEAKER pro tempore (Mr. Bass). The gentleman from Washington 
(Mr. McDermott) is recognized for 3\1/2\ minutes.
  Mr. McDERMOTT. Mr. Speaker, I appreciate the erudite lecture on the 
tax structure of the gentleman from Wisconsin (Mr. Ryan). I know he 
sits on the Committee on Ways and Means, and he knows we have not had a 
single hearing on any kind of tax reform bill the whole time he has 
been on the committee.
  It is good to come out here and send these letters to the Congress. I 
do not know who this Congress is. When we send the sense of the 
Congress, where do these go? Do these go to the leadership or 
somewhere, or up in the air, or over to the Senate?
  Mr. RYAN of Wisconsin. Mr. Speaker, will the gentleman yield?
  Mr. McDERMOTT. I yield to the gentleman from Wisconsin.
  Mr. RYAN of Wisconsin. Mr. Speaker, I would tell the gentleman, we 
have had hearings in the Committee on Ways and Means. We have had 
hearings in the Subcommittee on Select Revenue Measures on tax reform 
ideas.
  Mr. McDERMOTT. I would ask the gentleman, Mr. Speaker, when are they 
going to bring something to the full committee? I do not sit on that 
subcommittee.
  Mr. RYAN of Wisconsin. Well, in the subcommittee we had a lot of 
hearings.
  Mr. McDERMOTT. Mr. Speaker, I take back my time. I appreciate the 
gentleman's point.
  The last tax we had last year, the one they have been running their 
elections on, the Urban Institute says that if your income is between 
$30,000 and $40,000, that is the average income in this country, the 
tax cut was $339. Households with over $1 million get an average tax 
cut of $90,000. Sixty-eight percent of households in this country get a 
tax cut of less than $500.
  If you are a typical elderly family with an income between $20,000 
and $30,000, you get 89 bucks. That is an unfair tax structure. They 
made it worse. If they have their way with this $700 billion nonsense 
that they are trying to push in this session, they will make it even 
worse, because they will saddle our kids with debt and give all the 
money to people on the top.
  Now, I agree, this is a great thing. I wish we could get somebody, 
when we send this sense of the Congress, it would actually get to 
somebody who could actually do something, maybe the Speaker's office, 
maybe the majority leader's office. Mr. Armey used to talk about it, 
but he never brought a bill here. Maybe the new majority leader would 
bring us out something we could vote on. It would be real nice to have 
a debate on an actual piece of legislation, so we could understand what 
it was really going to do.
  Mr. Speaker, I urge all my Members to vote for this, because we all 
want a more fair tax structure.
  Mr. Speaker, I yield back the balance of my time.
  Mr. KINGSTON. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I want to say to my friend, the gentleman from 
Washington (Mr. McDermott), whose mother is watching him tonight, that 
she knows her own son. However, the IRS would define ``child'' five 
different ways under the current code. I know she is with us and 
appreciates the gentleman's ``yes'' vote.
  This bill supports this hearing, this bill supports that debate. It 
is my hope that we can get those of us who may or may not be on the 
right committee to introduce our bills.
  I am hoping that the Democrat Party will introduce a bill. To my 
knowledge, and I have been up here 10 years, I have never seen the 
Democrat Party introduce tax simplification. We have gotten a lot of 
criticism. I would like to see some of their solutions. Maybe we can do 
some bipartisan things together.
  The criticism about the length of this debate is valid, but we have 
spent a lot of time preserving Social Security and Medicare and 
reforming education. These things do, unfortunately, take decades to 
accomplish. Welfare reform, which we passed in 1996, actually was 
debated for 30 years before we actually got reform on it.
  I do not want this to be 30 years, Mr. Speaker. I am hoping that 
Members of Congress can use this resolution as a vehicle to encourage 
debate within this body, within this town, within the other body, 
within the executive branch, to bring the tax simplification debate 
forward.
  I ask Members to put their ideas on the table, whatever it is, 
Democrat Party, Republican Party, Independents, flat tax, sales tax, 
simplifying the current code. Let us do something, because what we have 
right now is not working.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Georgia (Mr. Kingston) that the House suspend the rules 
and agree to the concurrent resolution, House Concurrent Resolution 
141.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of 
those present have voted in the affirmative.
  Mr. KINGSTON. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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