[Congressional Record Volume 150, Number 45 (Friday, April 2, 2004)]
[Extensions of Remarks]
[Page E518]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        INTRODUCTION OF TAX SIMPLIFICATION LEGISLATIVE PROPOSALS

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                           HON. AMO HOUGHTON

                              of new york

                    in the house of representatives

                         Friday, April 2, 2004

  Mr. HOUGHTON. Mr. Speaker, today I am introducing a package of nine 
separate proposals on tax simplification. Also, today I introduced a 
resolution of the House to require a simplification title in any tax 
measure under consideration.
  As we approach the deadline of April 15, taxpayers once again come 
face-to-face with the task of voluntarily--and I emphasize 
voluntarily--complying with filing their individual tax returns. If our 
system becomes too complex for the ordinary citizen, then noncompliance 
will no doubt accelerate. Many Members, and taxpayers, believe that 
Congress will overhaul the entire system. I'm all for overhauling the 
tax system, but it will be a long process. In the meantime, I believe 
the ongoing simplification of the tax system should be a top priority 
of Congress.
  This package of simplification bills highlights some of the areas of 
the Internal Revenue Code that cry out for change in order to reduce 
complexity and make our citizens' task of voluntarily complying with 
our tax laws a less daunting challenge. Some have a cost attached, such 
as the AMT repeal, while others are revenue neutral. The proposals are 
as follows:
  Alternative Minimum Tax Repeal Act of 2004. The repeal of AMT for 
individuals is at the top of about everybody's list of must-do tax 
legislation. However, the revenue lost is substantial. The bill would 
substantially slow the growth in the number of taxpayers subject to AMT 
over the next 10 years, by adjusting the AMT exemption, and finally 
repealing the provision effective after 2013.
  Child Definition Simplification Act of 2004. The proposal would 
address a challenging problem that faces taxpayers every year--the 
multiple definitions of a qualifying child for different tax purposes. 
The proposal would provide a uniform definition of a child based on 
residence, relationship and age of the child.
  Filing Status Simplification Act of 2004. The Head of Household 
filing status has long been a leading source of taxpayer confusion and 
mistakes during the filing season. To address this problem, the 
proposal would change ``Head of Household'' to ``Single Parent or 
Guardian'' filing status, a term that is less likely to cause a mistake 
in filing status.
  Home Mortgage Tax Simplification Act of 2004. Under the proposal, 
points paid on a home mortgaging refinancing would be fully deductible 
in the year in which the expense is incurred. The current law generally 
requires that the refinancing points be amortized over the stated life 
of the loan.
  Taxation of Minor Children Simplification Act of 2004. The proposal 
would eliminate the current restrictions on adding a minor child's 
income to the parent's return. A parent could freely elect to include 
the income of a child under 14 on his or her own tax return. This does 
not change the ability of the child to file a separate return, if that 
is preferable.
  Education Tax Credit Simplification Act of 2004. The proposal would 
merge the HOPE and Lifetime Learning Credits, which serve nearly 
identical purposes but have different rules. The proposal would provide 
a credit for one-half of the first $3,000 of post-secondary education 
expenses. The credit would apply on a per-child basis and would not be 
limited to the first two years of post-secondary education.
  Small Business Tax Modernization Act of 2004. The proposal would 
combine the benefits of Subchapter S (S corporations) and Subchapter K 
(Partnerships) of the Internal Revenue Code in a single, unified 
passthrough entity regime based on Subchapter K. There are presently 
two separate, fully-articulated passthrough entity regimes--an 
expensive and unnecessarily complicated system. The goal of the 
legislation is to establish a single passthrough entity regime that 
preserves the major benefits of Subchapters S and K.
  Personal Holding Company Tax Repeal Act of 2004. The proposal would 
repeal the Personal Holding Company tax, which is outdated and has been 
eclipsed by subsequent changes to the tax code.
  Small Business Law Tax Conformity Act of 2004. The proposal would 
make technical changes necessary to update the Internal Revenue Code to 
take into account changes that have occurred in state business law. The 
proposal would define earnings from selfemployment to exclude the 
portion of a partner's distributive share that is attributable to 
capital.
  If these simplification proposals--which affect millions of 
taxpayers--are enacted this year, filing tax returns next year will be 
simpler and less time consuming. I urge my colleagues to support these 
provisions.

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