[Congressional Record Volume 151, Number 161 (Thursday, December 15, 2005)]
[Extensions of Remarks]
[Page E2547]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    PROVIDING FOR CONSIDERATION OF H.R. 4297, TAX RELIEF EXTENSION 
                       RECONCILIATION ACT OF 2005

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                               speech of

                          HON. JAMES A. LEACH

                                of iowa

                    in the house of representatives

                       Thursday, December 8, 2005

  Mr. LEACH. Mr. Speaker, reluctantly I rise to oppose a bill which has 
a number of provisions I support and others which I might have been 
inclined to back in a different economic and historical context. But 
this Congress jeopardizes America's fiscal house as it continues to 
``pay'' for a war with tax cuts. This is, after all, the first time in 
our history--and perhaps the history of the world--in which a 
government has sent soldiers into combat at the same time it has 
reduced the public's tax burden. And just as war cannot be paid for 
with tax cuts, social balance cannot be maintained if the costs of 
rebuilding one region of the country devastated by hurricanes are 
coupled with the reduction of support for needy citizens in other 
areas.
  I am an advocate of tax simplification--the replacement of a 
deduction-centric tax code with a simplified lower rate system. But I 
have doubts about taking the radical step of eliminating social 
progressivity with a flat, single-rate tax. The complexity of the 
current system is the result of a myriad of tax rules, not the fact 
that rates are slightly staggered. What has been missed in today's 
debate is that the taxation of dividend income at substantially lower 
levels than earned income means that the working middle class will be 
taxed at much steeper rates than upper-income citizens. The approach on 
the table today will not only eliminate tax progressivity, it will 
create an inverted tax system, one that is profoundly regressive.
  No tax system can stand the test of common sense if a high school 
principal, electrician, or registered nurse are taxed at a higher rate 
than a billionaire who receives his income from dividends. Yes, there 
is an argument that taxing dividend income may, in some cases, 
represent ``double'' taxation, but this concern is not as compelling as 
many assume because the deduction-oriented tax codes allow many large 
companies to have negligible income tax liabilities. This is why, 
according to a University of Michigan study, many of America's largest 
estates have been subjected to surprisingly little, if any, taxation in 
the accumulating years.
  Priorities are askew. When Congress attempts to cover the cost of 
man-made wars and nature-made hurricanes while expanding tax breaks 
that disproportionately benefit higher income individuals, it is forced 
to limit spending on programs for low-income students and our needier 
citizens to keep the fiscal deficit from skyrocketing.
  As long as this war continues, Congress is obligated to keep its eye 
not only on fiscal responsibility, but social justice. If it does not 
pay attention to fairness, the kind of internal strife that has broken 
out in recent weeks in France and the kind of internal division which 
was evidenced in the wake of Katrina in New Orleans will be magnified 
at great social cost.
  A thriftier government may be a credible goal, but Congress is 
obligated to pay for whatever commitments it makes. I did not vote for 
the Iraq war primarily because of policy rather than expense concerns. 
But there is a cost dimension and the burden of responsibility for 
funding public commitments falls at this time particularly on those who 
chose to authorize this war. Failure to accept this responsibility 
weighs down the public balance sheet and pushes payment of debt 
obligations to future generations.
  Accordingly, I am compelled to register my opposition to the fiscal 
irresponsibility implicit in this resolution.

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