[Congressional Record Volume 150, Number 66 (Wednesday, May 12, 2004)]
[House]
[Pages H2829-H2835]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PROVIDING FOR CONSIDERATION OF H.R. 4275, PERMANENT EXTENSION OF 10-
PERCENT INDIVIDUAL INCOME TAX RATE BRACKET
Mr. SESSIONS. Mr. Speaker, by direction of the Committee on Rules, I
call up House Resolution 637 and ask for its immediate consideration.
The Clerk read the resolution, as follows:
H. Res. 637
Resolved, That upon the adoption of this resolution it
shall be in order to consider in the House the bill (H.R.
4275) to amend the Internal Revenue Code of 1986 to
permanently extend the 10-percent individual income tax rate
bracket. The bill shall be considered as read for amendment.
The previous question shall be considered as ordered on the
bill and on any amendment thereto to final passage without
intervening motion except: (1) one hour of debate on the bill
equally divided and controlled by the chairman and ranking
minority member of the Committee on Ways and Means; (2) the
amendment in the nature of a substitute printed in the report
of the Committee on Rules accompanying this resolution, if
offered by Representative Rangel of New York or his designee,
which shall be in order without intervention of any point of
order, shall be considered as read, and shall be separately
debatable for one hour equally divided and controlled by the
proponent and an opponent; and (3) one motion to recommit
with or without instructions.
The SPEAKER pro tempore. The gentleman from Texas (Mr. Sessions) is
recognized for 1 hour.
Mr. SESSIONS. Mr. Speaker, for the purpose of debate only, I yield
the customary 30 minutes to the gentleman from Texas (Mr. Frost),
pending which I yield myself such time as I may consume. During
consideration of this resolution, all time yielded is for the purposes
of debate only.
The resolution before us is a modified closed rule, the standard rule
used for considering tax bills. It provides for 1 hour of debate in the
House to be equally divided and controlled by the chairman and ranking
minority member of the Committee on Ways and Means.
It also provides for consideration of the amendment in the nature of
a substitute printed in the Committee on Rules report accompanying the
resolution, if offered by the gentleman from New York (Mr. Rangel) or
his designee, which shall be considered as read and shall be separately
debatable for 1 hour equally divided and controlled by the proponent
and an opponent.
Finally, the rule waives all points of order against the amendment
printed in the report, and it provides one motion to recommit with or
without instructions.
Mr. Speaker, the legislation that we will be considering this week,
H.R. 4275, the 10 percent tax bracket permanent extension bill, is very
important to me, to my party, to the American taxpayers, and I believe
this country. I support this legislation to fulfill a promise made by
our great President, George W. Bush, and the Republican Party that was
begun in 2001 when the 107th Congress overwhelmingly passed H.R. 1836,
President Bush's visionary plan to provide American workers with
comprehensive tax relief.
Among other things, the President's bold 2001 tax plan created a new
10 percent tax bracket, enabling millions of American families to keep
more of their hard-earned money. In the period immediately preceding
Congress' passing the President's tax proposal, between 1986 and 2000
the lowest tax rate available to these American workers was 15 percent.
The tax relief this new bracket provides to middle-class taxpayers
has proven to be very beneficial to our economy and for hardworking
families all across the United States. As a result, in 2003 Congress
passed H.R. 2, another tax cut championed by President Bush that
accelerated the phase-in of an expanded 10 percent tax bracket,
increasing the amount of taxable family income that will be subject to
this new lower rate. Under this bill the income eligible for this tax
rate went up to $14,000 from $12,000, and up to $7,000 from $6,000 for
singles.
Unfortunately, because this tax cut language was written as a
compromise with the Senate. If Congress fails to pass my bill and
permanently extend the 10 percent tax bracket, in 2005, 2006, and 2007
the bracket will shrink back to $12,000 and $6,000 for singles,
increasing again briefly and then disappearing forever in 2011 to
satisfy the arcane Senate budgetary rule.
[[Page H2830]]
If this were allowed to happen, it would mean that some 22 million
low-income filers whose tax liability is contained wholly within the
tax bracket of 10 percent would immediately be shouldered with a 50
percent income tax increase. I believe that this kind of tax increase
on working-class Americans is simply unacceptable. My legislation
offers a simple solution to prevent this major tax increase on middle-
class families from occurring. It maintains and adjusts for inflation
the size of the 10 percent bracket at $14,000 for married couples,
$7,000 for singles, and makes this bracket a permanent part of the Tax
Code.
If H.R. 4275 is not enacted, it would mean that 73 million tax
returns, representing almost 150 million individual Americans, will be
hit with a higher tax bill next year, and these taxpayers will face an
average income tax increase of over $2,400 over the next decade. It
would mean that those 22 million lower-income workers would be pushed
into a higher tax bracket, including over 1.7 million hardworking
Texans from my State who struggle every day to make ends meet. Congress
should not and cannot allow this massive tax increase to occur, and my
legislation would prevent this antigrowth scenario from happening.
No other provision of the 2001 Bush tax cut has benefited taxpayers
more broadly than the creation of this 10 percent bracket. Studies have
shown that the benefits for this provision overwhelmingly flow to
lower-and middle-income married earners between the ages of 25 and 54.
These are precisely the people that this legislation will help, and I
urge all of my colleagues to support this important tax measure on
behalf of all American taxpayers.
This week's vote on H.R. 4275 will provide the kind of broad-based
middle-class tax relief to which the Republican Party is strongly
committed and so am I.
Mr. Speaker, I urge my colleagues to vote with me in supporting this
rule and the underlying legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. FROST. Mr. Speaker, I yield such time as he may consume to the
gentleman from Georgia (Mr. Scott) for a brief personal privilege
matter.
(By unanimous consent, Mr. Scott of Georgia was allowed to speak out
of order.)
Mourning the Passing of Gloria Aaron
Mr. SCOTT of Georgia. Mr. Speaker, I thank the gentleman from Texas
(Mr. Frost) for yielding to me, for being kind and generous for this
moment.
Mr. Speaker, I rise really with a heart of sorrow. I rise to ask to
be excused from voting so that I may be able to attend a funeral for my
wife's sister, my sister-in-law, Gloria Aaron in Mobile, Alabama, who
passed on Mother's Day weekend, Saturday. The funeral will be tomorrow
and the wake this evening.
Of course, voting is paramount and most important to us here and I
wanted to make sure it is a part of the Record as to why I will miss
voting.
And while I am here, Mr. Speaker, I would like to say just one word
about Gloria Aaron. She was more than just a sister-in-law. She was a
sister, very strong in her faith and belief in God, worked very hard in
the church in Mobile at Morning Star Baptist Church. She leaves a
mother, Estelle Aaron; one sister, my wife, Alfredia; two brothers,
James and Hank Aaron. Our family are deeply in remorse. I thank the
Speaker for giving me this opportunity. And of course for Gloria, she
indeed fought that good fight. She kept the faith. She finished her
course, and I am sure that there is a crown of righteousness in heaven
for Gloria Aaron.
I thank the gentleman from Texas for yielding, and I thank the
Congress.
Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
(Mr. FROST asked and was given permission to revise and extend his
remarks.)
Mr. FROST. Mr. Speaker, I am pleased to join the gentleman from Texas
(Mr. Sessions) today in support of H.R. 4275, legislation to make the
expanded 10 percent tax bracket permanent. In my district in north
Texas and across America, scores of families work hard every day to
make ends meet. By passing this bill, we will provide some much-needed
tax relief to these hardworking Americans.
But I must admit, Mr. Speaker, I find it very odd that some Members
of this House would champion the tax relief bill before us today when
they have also at nearly every opportunity voted against other measures
that would have provided significant economic benefits to a great many
middle-class taxpayers. I am talking about measures like providing
additional tax relief by reinstating the State sales tax deduction and
ensuring overtime pay for America's police and firefighters.
I think it is important to consider these sorts of measures now, Mr.
Speaker, because many of our constituents are suffering from the recent
recession and the outsourcing of good American jobs overseas.
Do not get me wrong, Mr. Speaker, we all want to provide tax relief
to our constituents. I voted last week in favor of the bill to provide
relief from the Alternative Minimum Tax. I voted the week before to
permanently eliminate the marriage tax penalty, and I will vote today
to make the expanded tax bracket permanent. The bill on the floor today
is a good bill and it is the very least we can do to help families in
the country, but I think the American people deserve better than our
least effort.
Others may be happy to limit our efforts to help American families to
this bill, but I am not, Mr. Speaker. We can improve this bill by
amending the rule to allow for the consideration of H.R. 720, a bill
introduced by the gentleman from Texas (Mr. Brady). His bill will
reinstate the sales tax deduction so that citizens of States without
income taxes may deduct their sales taxes from their Federal tax bill.
This is a very important issue for many Americans, including my
constituents in North Texas who do not pay a State income tax but have
been plagued by high sales taxes which may rise even higher if some in
the Texas legislature have their way.
{time} 1145
Our State comptroller has estimated that the average Texas family
would save about $300 a year on their Federal taxes under the bill
offered by the gentleman from Texas (Mr. Brady).
Last week, I attempted to bring a similar measure up for
consideration, but that effort was defeated on a straight party-line
vote.
This is a bipartisan issue, Mr. Speaker, and I want to give the
entire House an opportunity to vote on a bipartisan bill. H.R. 720 has
78 cosponsors, 47 Republicans and 31 Democrats. I have cosponsored the
bill, the gentleman from Texas who is managing today's rule on the
other side of the aisle has cosponsored the bill, and dozens of other
well-respected Members from both parties have cosponsored the bill. As
a matter of fact, Mr. Speaker, the Republican leadership indicated last
week that they too support this bill.
So why do we not vote on it? Is this about politics, or is it about
tax relief? Last week, Republicans defeated my amendment and said it
was about politics. Well, here is a Republican bill that has strong
bipartisan support and will provide millions of families with $300 a
year in tax relief.
The American people deserve to find out today whether the majority
party will put partisan politics aside for just a minute to pass this
badly needed tax relief. I bet our constituents just cannot wait to see
how their elected Representatives will vote on this issue.
In the coming weeks, I hope we will have more opportunities to help
more families. But in the meantime, if Members are serious about
helping their constituents, they will not only vote to extend the 10
percent tax bracket permanently, they will also vote today to defeat
the previous question and allow us to consider H.R. 720, to reinstate
the sales tax deduction. It is a Republican bill with Democratic
support. As my colleagues realize, a no vote will be a vote against tax
cuts.
Mr. Speaker, at this point I would like to insert several things in
the Record. I am inserting a special report from Carole Keeton
Rylander, the Texas Comptroller of Public Accounts. In this report she
says, ``Restoration of the IRS sales tax deduction should be one of
Texas' main priorities in Congress. The current discriminatory
treatment of Texas taxpayers is taking $701 million out of Texas
pockets and costing our State more than 16,000 jobs.''
[[Page H2831]]
I would also at this point, Mr. Speaker, insert in the record a
statement by my colleague, the gentleman from Texas (Mr. Brady), that
he presented when he introduced this legislation. ``Washington should
treat all States equally,'' Mr. Brady says. ``A broad bipartisan group
pushes Congress to end bias against sales tax States.''
[Special Report, March 2002]
Restoration of the IRS Sales Tax Deduction Should Be One of Texas'
Main Priorities in Congress
(By Carole Keeton Rylander)
Currently, the citizens of Texas and eight other states
are discriminated against because they cannot take any tax
deduction comparable to the state and local income tax
deductions enjoyed by the citizens of 41 other states and the
District of Columbia. In an attempt to alleviate this
disparity, Comptroller Rylander proposes to restore much of
the federal sales and motor vehicle sales tax deductions that
citizens of Texas were last able to itemize on their federal
income tax returns for the 1986 tax year.
The Comptroller's plan would grant taxpayers in all states
the option of deducting either their state and local sales
and motor vehicle sales taxes or their state and local
individual income taxes on their Form 1040. While such an
option would not fully restore the original deduction, which
allowed deductions for sales as well as income taxes, it
would go a long way to restoring fundamental equity for
taxpayers in those states that no not impose income taxes on
their residents, and at minimal cost to the federal budget.
There is already legislation before Congress that closely
tracks the Comptroller's plan. Last year, Representative
Brian Baird (D-Washington) introduced H.R. 322, and Sen. Fred
Thompson (R-Tennessee) introduced a similar bill, S. 291, in
the Senate. Both bills would grant taxpayers in all states
the option of itemizing a deduction for either their sales
(including motor vehicle sales) taxes or income taxes paid,
but not for both. Both bills would limit the deduction to a
specific amount prescribed in a table (individualized for
each state) providing deductible amounts by family size and
income group. Taxpayers, however, would not have the option
of deducting actual taxes paid, as they had in 1986 and
before. The main difference between the bills is that H.R.
322 refers to state sales taxes, while S. 291 refers to state
and local sales taxes. The Senate version also would allow
the deduction against the Alternative Minimum Tax. H.R. 322
boasts among its 58 co-sponsors 18 Texans; S. 291 is co-
sponsored by both Texas senators.
Texans lost their sales tax deductions in the last-minute
deal-making behind the Tax Reform Act of 1986. Before passage
of the Tax Reform Act of 1986 (TRA86), all individuals were
allowed to take separate income tax deductions for their
payments of state and local sales taxes and motor vehicle
sales taxes. For the sales tax, they were allowed to deduct
either the actual amount paid, or they could use an optional
sales tax table that provided deductible amounts for each
state (based on its rate and base) by income group and family
size. For example, a family of four with an income of $33,000
was allowed to deduct $306 in state sales taxes in Texas, but
$508 in Tennessee; and in both instances, taxpayers were
allowed to include an additional amount for local taxes paid.
TRA86 was designed to simplify the federal income tax by
eliminating many deductions, exemptions and credits while
increasing personal exemptions and standard deductions and
lowering and compressing tax rates. The deduction of state
and local sales taxes was one of the last (and most
contentious) items considered by the Senate, but the final
efforts to restore at least some vestige of the deduction,
led in part by Sen. Phil Gramm, ultimately failed. The
argument put forth by members from the states that retained
their state and local income tax deduction was that the
losses attributable to the repeal of the sales tax
deduction would be more than made up for by the increased
personal exemption, and that the sales tax deduction only
benefited the rich, because lower-income groups are less
likely to itemize.
The Comptroller's plan could be put in place for less than
1 percent of the costs of existing state and local tax
deductions. The March 26, 2001 cost estimate provided by the
Joint Committee on Taxation estimated that H.R. 322 would
decrease federal receipts by $23.1 billion over the 10-year
period 2002-2011. The annual costs were expected to average
$2.0 billion for the first three years, rising incrementally
thereafter. Putting the federal cost in perspective, the 1999
cost for the current deduction for state and local income and
property taxes was $268.9 billion. As such, reinstatement
would produce an increased cost to the federal government of
0.8 percent.
The Comptroller's plan could be put in place with virtually
no increase in complexity. Although the sales tax deductions
were eliminated in part for reasons of tax simplification,
the proposed legislation before Congress would add only one
more line to Schedule A, for those taxpayers electing to
itemize on their Form 1040. Even if actual taxes paid were
allowed to be deducted there would be an addition of only two
lines: one for general sales taxes paid, and one for motor
vehicle sales taxes paid.
Equity and fairness demand that tax discrimination against
Texans be eliminated. Reinstatement of the deduction for
sales taxes would eliminate the fundamental disparity created
by TRA86, when citizens in states with a personal income tax
were permitted to deduct such taxes, but citizens in states
without an income tax had no corresponding deduction. The net
effect of this disparity is that Texans, as well as the
citizens of the eight other states without a general
individual income tax pay a greater percentage of taxes to
the federal government than do citizens living in their
neighboring states with income taxes. In other words, the
federal tax law currently treats the same individual
differently solely on the basis of residence. Providing
individuals in all states the choice to deduct one or the
other of their sales or income taxes would restore equity and
fairness for all U.S. citizens at minimal cost.
The Comptroller's plan would put more money in Texans'
pockets. As with everything else in the IRS Code, the devil
is in the details, and even subtle differences in proposed
legislation can have major revenue implications, making any
revenue estimates of the ultimate legislation difficult.
Assuming that the federal legislation fairly and accurately
portrayed Texans' sales tax and motor vehicle sales tax
payments, restoration of the sales tax deduction could be
expected to save Texans--in the aggregate--on the order of
$568.7 million (if only state sales taxes were exempted) to
$701.3 million (if state and local sales taxes were exempted)
in the 2002 Tax Year. The corresponding average savings per
itemizing Texas household would be $231 and $284.
While the deduction only would go to taxpayers who itemized
their deductions, more Texans at lower income levels would
find it to their benefit to itemize. Right now, only one in
five tax returns filed by Texans itemizes deductions,
compared to almost one in three nationwide. The chief reason
for this is that citizens of 41 states and the District of
Columbia enjoy a deduction that is not available to Texans.
Restoration of the deduction for sales taxes paid would go a
long way towards bringing Texas closer to the national
average. In other words, the availability of the deduction
would benefit not only those who currently itemize, but an
additional number of slightly lower-income households that
would find it to their benefit to itemize.
The Comptroller's plan would create more jobs, economic
growth, and state tax receipts with absolutely no state tax
or spending increase. Keeping as much as $701.3 million in
the hands of Texas taxpayers would provide a significant
boost to the state economy. Assuming that the legislation
passed this year and that the deduction could be taken on
income taxes filed in 2003 for the 2002 Tax Year, the tax
savings could be expected to generate 16,180 new Texas jobs,
$590 million in new Texas investment, and $874 million in
increased Texas Gross State Product in 2003. The increased
economic activity in turn could be expected to boost general
revenue by $66.5 million in the three-year period 2003-05.
Most of this revenue would come from increased sales and
motor vehicle sales tax collections.
The Comptroller's plan promises a win-win situation for all
Texans, even those who do not itemize. To the extent that
keeping more Texas income in Texas, where it belongs, instead
of sending it off to Washington, all Texans would benefit
from the increased employment opportunities and investment.
In fact, it is difficult to find a downside for Texas to the
reinstatement of the sales tax deduction.
The Comptroller's plan would be a straight-up win for the
state, a victory for tax equity among the states, and it
would provide a desirable, welcome boost to restoring
statewide economic and revenue growth.
salient features
Legislation tracking the Comptroller's plan would cost the
federal government somewhere between $2.0 to $2.5 billion per
year--less than 1 percent of the $268.9 billion 1999
deduction for state and local income and property taxes.
Texans would save as much as $701 million, or $284 per
itemizing household on their 2002 taxes.
The estimated tax savings would be expected to generate
16,180 new Texas jobs, $590 million in new Texas investment,
and $874 million in increased Gross State Product in 2003.
The increased economic activity could be expected to boost
2003-04 general revenue-related state tax receipts for the
three-year period 2003-05 by $66.5 million.
Assuming that the federal legislation fairly and accurately
portrayed Texans' sales tax and motor vehicle sales tax
payments, a family of four with an income of $60,000 would be
able to deduct an additional $1,015 to calculate taxable
income, and a single mother of one with a total income of
$35,000 could deduct an additional $641.
The current system discriminates against Texans and the
citizens of other states that have opted to finance their
budgets without personal income taxes. The Comptroller's plan
is necessary to restore fairness and equity in the treatment
of those state taxpayers who currently do not benefit from
the tax deductions enjoyed by the citizens of the other 41
states and the District of Columbia.
[[Page H2832]]
____
[February 12, 2003]
``Washington: Treat All States Equally''
(Press Release by Congressman Kevin Brady)
broad bipartisan group pushes congress to end bias against sales tax
states
Washington, D.C.--U.S. Representative Kevin Brady (R-TX), a
member of the tax writing Ways and Means Committee in the
U.S. House of Representatives, introduced legislation, The
Sales Tax Equity Act, in Congress today that would treat
Texans the same way others in America are treated when it
comes to paying federal income tax.
Brady's bill jointly introduced with a bipartisan group of
congressional legislators, restores the sales tax deduction
Congress repealed in 1986. Specifically, the act would allow
taxpayers to deduct either their state and local sales tax
from their federal tax return.
``When tax time comes around each April, taxpayers in Texas
and seven other states are discriminated against merely
because we live in a state that wisely chooses not to burden
families with a state income tax,'' notes Bardy. ``Taxpayers
in 42 states are allowed to deduct a portion of their state
income taxes. But states like ours that rely upon sales taxes
are discriminated against.''
``Americans should not be punished merely because of where
they live. States should be free to choose how to fund their
government without pressure from Washington. Uncle Sam's bias
toward the income tax is unfair and needs to end.''
Texas Comptroller Carol Keeton Strayhorn estimates the
average Texas family would save just under $300 a year on
their federal taxes. Supported also by Governor Rick Perry,
The Sales Tax Equity Act would provide an economic boost by
creating over 16,000 new jobs, $590 million in new
investments, and $874 million in increased gross state
product in Texas.
So that families don't need to keep a shoe box of sales
receipts, under Brady's bill the Internal Revenue Service
would establish average deduction tables based on filing
status, number of dependents, adjusted gross income and rates
of state, and local general sales taxes. The tables, which
taxpayers could opt for, are indexed for inflation.
The bipartisan delegation announcing the legislation at a
news conference today in Washington include: Barbara Cubin
(R-Wyoming), Brian Baird (D-WA), Zach Wamp (R-TN), Mark Foley
(R-FL), Jim Cooper (D-TN) and Marsha Blackburn (R-TN). The
group is pushing to include the measure in President Bush's
Jobs & Growth tax relief package, noting that the measure
will help stimulate consumer spending, restores fairness and
helps low and middle-income taxpayers.
``Sales taxes add up for a family over the year,'' says
Brady. ``This is an issue of fairness and of reducing the
federal tax burden.''
``Another merit is this benefit taxpayers in every state
because it gives them the option of deducting whichever state
tax is higher, sales or income. That is a welcome tax relief
option'', says Brady.
Other members of the Texas delegation supporting The Sales
Tax Equity Act include: Sam Johnson (R) Gene Green (D)
Michael Burgess (R); Eddie Bernice Johnson (D); John Carter
(R); Max Sandlin (D); Ron Paul (R); Ralph Hall (D); Martin
Frost (D); Henry Bonilla (R) and Silvestre Reyes (D).
States without a state income tax include: Texas, Florida,
Tennessee, South Dakota, Nevada, Washington, Wyoming, and
Alaska. The bipartisan Joint Committee on Taxation estimates
the measure will provide $29 billion of tax relief over the
next decade.
Mr. Speaker, it is clear that the legislation being offered today by
the majority is good legislation, and I support the legislation. It is
also clear that there is bipartisan support for the bill offered by the
gentleman from Texas (Mr. Brady) to permit a deduction of State sales
taxes in those States that do not have an income tax. It is a wrong
that should be righted, and I hope this House will make in order a vote
on the bill offered by the gentleman from Texas (Mr. Brady) at the same
time we take up the bill offered by the gentleman from Texas (Mr.
Sessions).
Mr. Speaker, I reserve the balance of my time.
Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I have great respect for what the gentleman was arguing
here about this sales tax bill. It is something where the gentleman
from Texas (Mr. Brady) has been joined with by the gentleman from
Washington (Mr. Baird), as they have worked for a long, long time. I
recall probably a full year ago where I was approached by both these
gentleman about being a cosponsor of this important legislation.
The fact of the matter is today we are here to consider this 10
percent bill. Last week we considered other tax bills. Next week we
will consider more tax bills. These are being done in such a way that
would allow us a chance to talk about the importance of these, not only
to taxpayers, but to the middle class of this country. It is my attempt
and desire, just as it is with the gentleman from Washington (Mr.
Baird) and the gentleman from Texas (Mr. Brady), to continue working
with the chairman of the Committee on Ways and Means, the gentleman
from California (Mr. Thomas), on the correct bill, the bill that he
will support, the bill that will come to the floor, that bill that will
pass, the bill that will provide this opportunity for all the taxpayers
of these States. I believe it is some 17 States that currently have
this problem as it relates to sales tax as a result of those States not
having an income tax.
Today we are here for H.R. 4275 because it does the right thing for
middle-class wage earners on this 10 percent tax bracket, and I am
proud of what we are doing. I think anytime we can join in talking
about on the floor of the House a bipartisan approach to lowering
taxes, increasing the opportunity for people to have more money, more
take-home pay, more opportunity, it is always good.
I have been an advocate of this for a long time. I do not think we
should tax savings or investment in this country. That is not a part of
what this is about today. We are talking about lowering the tax
bracket, making it permanent, doing the right thing. I applaud those
people that come to the floor and support this, because it is a great
idea that we ought to make permanent.
Mr. Speaker, I reserve the balance of my time.
Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, it is interesting, my colleague from Texas talks about
the legislation and, well, we will do that in all due time and all due
course, in terms of the righting of the wrong that was committed 18
years ago. The sales tax deduction for my State and for six other
States, it is not 17, it is 7, was eliminated by this Congress in 1986,
18 years ago.
Only a few bills come out of the Committee on Ways and Means, only a
few favored bills, so we have to take the opportunity to present this
very important piece of legislation on the floor today and to give the
House an opportunity to vote to right this wrong on the question of the
deductibility of State sales tax. There are no other opportunities to
present this to the House. That is why we are presenting it today. I
hope that the House will give us the opportunity to right that wrong.
Mr. Speaker, I yield 5 minutes to the gentleman from Washington (Mr.
Baird).
Mr. BAIRD. Mr. Speaker, I would like to thank my colleague from the
great State of Texas for his leadership on this. The gentleman from
Texas (Mr. Frost) has been a steadfast advocate of correcting this
injustice for many years, and I appreciate working with him.
Mr. Speaker, I also respect also my colleague on the other side of
the aisle because I know he cares about this. But at the end of the day
today, we will have had an opportunity to vote to at least restore
fairness to our citizens.
When we go back home, we cannot very well say to them ``it is a
procedural matter,'' because it is also a procedural matter that every
year when they fill out their taxes and they itemize their deductions,
they have to put a zero; they have to say because our State chooses
sales tax over income tax, as is their right, we are not able to deduct
our sales taxes the way the States with income taxes can.
It is a procedural matter that costs our taxpayers hundreds of
dollars every single year that they could use for their families. It is
a procedural matter that costs my State $500 million every year.
The gentleman from Texas (Mr. Sessions) was right: We have passed a
number of tax bills over the last few years in this Congress. We have
had multiple opportunities, had the majority Members chosen to put
their people over their partisanship. But they have declined.
Here is another opportunity. There was one last week. How many weeks
are we going to say to our constituents that you go to the back of the
line again? We have lowered the tax rates on millionaires in this
country. We have refused to fight for tax fairness by insisting that
the people of our States be allowed their deductions. So millionaires,
not just millionaires, but people earning $1 million a year in income,
were put at the front of the line. Our States have been told again and
again, you go to the back of the line.
[[Page H2833]]
It is going to happen again today, I fear, and it does not have to.
To my good friends on the other side of the aisle, we have worked and
we should work in a bipartisan way, because the Tax Code does not say
Republicans or Democrats or Independents get to deduct or do not get to
deduct their sales tax. It just says all of you who have a sales tax do
not get to deduct it.
But at the end of the day, on a procedural vote, we are going to
bypass yet another opportunity, and bypassing that opportunity over the
last several years has cost our taxpayers thousands of dollars.
When I ask my friends, when are you going to say to your leadership,
we insist at long, long last that our constituents be treated fairly in
the Tax Code? When are you going to say that? Because we have said it
to our leadership.
It is going to be in the Democratic bill. It has been in prior
Democratic bills. We have brought it up before the Committee on Rules,
with almost unanimous no votes on the other side, with few exceptions.
We cannot get the help on the other side.
My colleague, the gentleman from Texas (Mr. Frost), has been a
steadfast advocate. He brought this issue up last week, and I am
grateful he did. We didn't get a single yes vote from the other side.
We did not get a single vote. Here it is again, and I wager we will not
get a single vote yet again.
At some point, the citizens of our States are going to catch on and
they are going to say, for all this talk about tax cuts, why do you
keep leaving us out? Because your leadership is putting you in a
position that says, time and time and time and time again, you must
vote with us and not with your constituents. And it is not your
leadership who elected you, it is your constituents.
The gentleman from Texas (Mr. Frost) has been responsive to his
constituents. He has said we need to bring this up now, and we have the
opportunity to do that now.
I would just ask my colleagues, you know as well as I do the only way
we get this to happen is to make this part of a larger bill. We do need
to provide relief for low and mid-income families in the Tax Code, but
we also need to provide relief for the families in our States who have
suffered too long under this injustice.
Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I thank the gentleman not only for his articulation of
the wonderful merits of fairness in our Tax Code, fairness for all the
people in all the States. I accept the opportunity for my colleague,
the gentleman from Texas (Mr. Frost) to reiterate there are 7 States
that this impacts, and I appreciate his bringing that to light and
respect that.
I would tell you that today, this is about the 10 percent bracket.
This is a very specific request that we are making to the House of
Representatives today that will be with the other requests that we are
making on the parts of the Bush tax plan to make them permanent.
It makes me proud to know that we in the House of Representatives are
together on these issues, about their importance of people who are back
home, people who are struggling, people who are trying to make ends
meet, people who are trying to make sure they provide for their
families and do those things which are necessary to their own dreams.
It makes me happy, and I am very proud.
Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, we have a good piece of legislation before us today that
I intend to support. I think most Members of the House will support it.
My only request is that, at the same time, we provide equity and
justice to the residents of seven States who were denied that equity
and justice in 1986.
Now, I know my colleague is a relatively junior Member and was not
here in 1986 when that legislation was voted on, but I was here, and I
voted against the legislation that denied the residents of my State the
opportunity to deduct their sales tax, when residents of New York and
California and other States could deduct their State income tax.
I feel very strongly about this issue, Mr. Speaker. As Members of
this House, we can do so much to lend a helping hand to our
constituents. Today we have a chance to do something good for millions
of American families. We can pass the bill to make the extended 10
percent tax bracket permanent, and then we can also immediately
consider the Brady legislation, H.R. 720, to restore the sales tax
deduction for citizens of Texas, Florida and other States lacking a
State income tax.
Now, as I mentioned earlier, last week I attempted to bring to the
floor a similar bill to reinstate the sales tax deduction, but the
Republican leadership indicated a preference for the Brady bill. So now
we have a chance to consider the legislation that Republicans
preferred. It does not matter to me which bill we consider. This is a
bipartisan issue, with wide support on both sides of the aisle.
{time} 1200
I just want to get it done.
So today, Mr. Speaker, to get it done, I urge a ``no'' vote on the
previous question. If the previous question is defeated, I will offer
an amendment to the rule that will allow the House to vote on H.R. 720.
Let me be clear, Mr. Speaker. Voting ``no'' on the previous question
will not prevent this House from voting on the underlying bill. It will
simply allow for the consideration of H.R. 720. A ``yes'' vote,
however, will deny the House the chance to even consider the issue of
reinstating the sales tax deduction.
The American people deserve to know where their elected
representatives stand on the issue of restoring the sales tax
deduction. This is not a partisan issue, and this is not a political
issue. This is about whether the citizens of Texas and other States
should have to pay for the privilege of living there. I hope Members
realize it today, and I hope their votes reflect this as well.
I urge a ``no'' vote on the previous question and ask unanimous
consent that the text of the amendment be printed in the Congressional
Record immediately before the vote.
The SPEAKER pro tempore (Mr. LaHood). Is there objection to the
request of the gentleman from Texas?
There was no objection.
Mr. FROST. Mr. Speaker, I yield back the balance of my time.
Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
We have graciously provided Members this wonderful opportunity to
hear about the debate of H.R. 4275, providing each other, both parties,
an opportunity for Members to hear about an agreement that we believe
that this initiative that was begun by President Bush of this 10
percent tax bracket, one that has now become available, one which we
need to make permanent, is the question that is before us today on the
floor. We have vetted this process. We have done those right things. We
have gone through the committees. We have done this with numerous tax
bills, and we will wish to continue doing that also.
We have an abiding faith in the taxpayer, that special interest group
of the Republican Party, the people who get up and go to work, people
who make their lives work, people who care about their kids, people who
create jobs and opportunity, people who do things because they love
their country and they want America to be the strongest, with
opportunity and bettering people's lives.
That is part of what this H.R. 4275 is about. It is about bettering
people's lives. It is a political consideration that our President,
George W. Bush, floated to us years ago. It is about us as Members of
Congress hearing that call, seeing people back home who relish this
opportunity not to have it taken away. That is the importance of this
body. This body is able to debate the issues, is able to bring them
forth, is able to talk about them. And that is what is so evident about
this great Nation, a majority rule.
Mr. Speaker, I would say to my colleagues, I too wish we had lots of
other things that would be a part of this bill for tax relief. Today is
a day when we will stand up and say we are going to make sure that this
10 percent bracket will be permanent for all taxpayers. I am proud of
what we are doing. I ask each of my colleagues to support this rule,
this underlying legislation, and the opportunity which I believe will
be tomorrow to debate this fully on the
[[Page H2834]]
floor of the House of Representatives and, once again, give a victory
to the taxpayers of this country.
The material previously referred to by Mr. Frost is as follows:
Previous Question for H. Res. 637; Rule on H.R. 4275--Making the 2003
Changes to the 10% Tax Bracket Permanent
In the resolution strike ``and (3)'' and insert the
following:
``(3) the amendment printed in Sec. 2 of this resolution if
offered by Representative Brady of Texas or a designee, which
shall be in order without intervention of any point of order,
shall be considered as read, and shall separately debatable
for 60 minutes equally divided and controlled by the
proponent and an opponent; and (4)''
Sec. 2. The amendment referred to in (3) follows:
At the end of the bill add the following new section:
SEC. 2. DEDUCTION OF STATE AND LOCAL GENERAL SALES TAXES IN
LIEU OF STATE AND LOCAL INCOME TAXES.
(a) In General.--Subsection (b) of section 164 of the
Internal Revenue Code of 1986 (relating to definitions and
special rules) is amended by adding at the end the following:
``(5) General sales taxes.--For purposes of subsection
(a)--
``(A) Election to deduct state and local sales taxes in
lieu of state and local income taxes.--
``(i) In general.--At the election of the taxpayer for the
taxable year, subsection (a) shall be applied--
``(I) without regard to the reference to State and local
income taxes,
``(II) as if State and local general sales taxes were
referred to in a paragraph thereof, and
``(III) without regard to the last sentence.
``(B) Definition of general sales tax.--The term `general
sales tax' means a tax imposed at one rate with respect to
the sale at retail of a broad range of classes of items.
``(C) Special rules for food, etc.--In the case of items of
food, clothing, medical supplies, and motor vehicles--
``(i) the fact that the tax does not apply with respect to
some or all of such items shall not be taken into account in
determining whether the tax applies with respect to a broad
range of classes of items, and
``(ii) the fact that the rate of tax applicable with
respect to some or all of such items is lower than the
general rate of tax shall not be taken into account in
determining whether the tax is imposed at one rate.
``(D) Items taxed at different rates.--Except in the case
of a lower rate of tax applicable with respect to an item
described in subparagraph (C), no deduction shall be allowed
under this paragraph for any general sales tax imposed with
respect to an item at a rate other than the general rate of
tax.
``(E) Compensating use taxes.--A compensating use tax with
respect to an item shall be treated as a general sales tax.
For purposes of the preceding sentence, the term
`compensating use tax' means, with respect to any item, a tax
which--
``(i) is imposed on the use, storage, or consumption of
such item, and
``(ii) is complementary to a general sales tax, but only if
a deduction is allowable under this paragraph with respect to
items sold at retail in the taxing jurisdiction which are
similar to such item.
``(F) Special rule for motor vehicles.--In the case of
motor vehicles, if the rate of tax exceeds the general rate,
such excess shall be disregarded and the general rate shall
be treated as the rate of tax.
``(G) Separately stated general sales taxes.--If the amount
of any general sales tax is separately stated, then, to the
extent that the amount so stated is paid by the consumer
(other than in connection with the consumer's trade or
business) to the seller, such amount shall be treated as a
tax imposed on, and paid by, such consumer.
``(H) Amount of deduction to be determined under tables.--
``(i) In general.--The amount of the deduction allowed
under this paragraph shall be determined under tables
prescribed by the Secretary.
``(ii) Requirements for tables.--The tables prescribed
under clause (i)--
``(I) shall reflect the provisions of this paragraph,
``(II) shall be based on the average consumption by
taxpayers on a State-by-State basis, as determined by the
Secretary, taking into account filing status, number of
dependents, adjusted gross income, and rates of State and
local general sales taxation, and
``(III) need only be determined with respect to adjusted
gross incomes up to the applicable amount (as determined
under section 68(b)).''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2002.
Mr. SESSIONS. Mr. Speaker, I yield back the balance of my time, and I
move the previous question on the resolution.
The SPEAKER pro tempore. The question is on ordering the previous
question.
The question was taken; and the Speaker pro tempore announced that
the ``ayes'' appeared to have it.
Mr. FROST. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
Pursuant to clauses 8 and 9 of rule XX, this 15-minute vote on
ordering the previous question on House Resolution 637 will be followed
by 5-minute votes, if ordered, on adopting House Resolution 637,
ordering the previous question on House Resolution 638, and adopting
House Resolution 638.
The vote was taken by electronic device, and there were--yeas 221,
nays 203, not voting 9, as follows:
[Roll No. 156]
YEAS--221
Aderholt
Akin
Bachus
Baker
Ballenger
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bass
Beauprez
Bereuter
Biggert
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burns
Burr
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Carter
Castle
Chabot
Chocola
Coble
Cole
Collins
Cox
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Dreier
Dunn
Ehlers
Emerson
English
Everett
Feeney
Ferguson
Flake
Foley
Forbes
Fossella
Franks (AZ)
Frelinghuysen
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gillmor
Gingrey
Goode
Goodlatte
Goss
Granger
Graves
Green (WI)
Greenwood
Gutknecht
Hall
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Hobson
Hoekstra
Hostettler
Houghton
Hulshof
Hunter
Hyde
Isakson
Issa
Istook
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
King (IA)
King (NY)
Kingston
Kirk
Kline
Knollenberg
Kolbe
LaHood
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (OK)
Manzullo
McCotter
McCrery
McHugh
McInnis
McKeon
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Murphy
Musgrave
Myrick
Nethercutt
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Osborne
Ose
Otter
Oxley
Paul
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Porter
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Regula
Rehberg
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Royce
Ryan (WI)
Ryun (KS)
Saxton
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Stearns
Sullivan
Sweeney
Tancredo
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Tiberi
Toomey
Turner (OH)
Upton
Vitter
Walden (OR)
Walsh
Wamp
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Young (AK)
Young (FL)
NAYS--203
Abercrombie
Ackerman
Alexander
Allen
Andrews
Baca
Baird
Baldwin
Ballance
Becerra
Bell
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Boswell
Boucher
Boyd
Brady (PA)
Brown (OH)
Brown, Corrine
Capps
Capuano
Cardin
Cardoza
Carson (IN)
Carson (OK)
Case
Chandler
Clay
Clyburn
Conyers
Cooper
Costello
Cramer
Crowley
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis (TN)
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Doggett
Dooley (CA)
Doyle
Duncan
Edwards
Emanuel
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank (MA)
Frost
Gephardt
Gonzalez
Gordon
Green (TX)
Grijalva
Gutierrez
Harman
Hastings (FL)
Hill
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley (OR)
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind
Kleczka
Kucinich
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Lucas (KY)
Lynch
Majette
Maloney
Markey
Marshall
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
Meehan
Meek (FL)
Meeks (NY)
Menendez
Michaud
Millender-McDonald
Miller (NC)
Miller, George
Mollohan
Moore
Moran (VA)
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
[[Page H2835]]
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (MN)
Pomeroy
Price (NC)
Rahall
Rangel
Rodriguez
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Sabo
Sanchez, Linda T.
Sanchez, Loretta
Sanders
Sandlin
Schakowsky
Schiff
Scott (GA)
Scott (VA)
Serrano
Sherman
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Stenholm
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Tierney
Towns
Turner (TX)
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Waters
Watson
Watt
Waxman
Weiner
Wexler
Woolsey
Wu
Wynn
NOT VOTING--9
Burton (IN)
Davis (FL)
DeFazio
DeMint
Gallegly
John
McNulty
Reyes
Tauzin
{time} 1230
Messrs. WYNN, JENKINS, DOGGETT and RUSH changed their vote from
``yea'' to ``nay.''
Mr. SOUDER changed his vote from ``nay'' to ``yea.''
So the previous question was ordered.
The result of the vote was announced as above recorded.
The SPEAKER pro tempore (Mr. LaHood). The question is on the
resolution.
The resolution was agreed to.
A motion to reconsider was laid on the table.
____________________