[Congressional Record Volume 155, Number 46 (Tuesday, March 17, 2009)]
[House]
[Pages H3480-H3486]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          THE PARTY OF ``OWE''

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentleman from Iowa (Mr. King) is recognized for 
60 minutes as the designee of the minority leader.
  Mr. KING of Iowa. Mr. Speaker, again, it is a privilege to address 
you here on the floor of the United States House of Representatives, 
and also to have the chance to lay out here before you and our 
colleagues and ultimately the American people a point on the cause that 
we are involved in.
  We have dealt with crisis after crisis here on the floor of Congress, 
and I look back at many of the things that have taken place 
historically here, and I could list them long. But I will say that I 
think the most colossal mistake that this Congress ever made was 
passing the President's Stimulus Act.
  I think we have a budget hanging out today that may be a more 
colossal error. In fact, this budget that lays in front of us, 
President Obama's budget, spends too much, taxes too much, borrows too 
much. And what it turns into is their party, that side of the aisle, 
Mr. Speaker, has become the Party of Owe, the party of debt, the party 
of borrow. Not the party of ``no,'' the party of ``owe.'' They can't 
say ``no'' to anything; they just want to owe everything and everybody, 
even to the extent where this budget projects out by CBO to go to 200 
percent deficit of GDP. Unheard of. The highest we have ever had in 
history was 1945, the end of World War II. Now, the President's budget 
takes this to that place.
  This takes us to, in the middle of this economic crisis where we have 
seen the equity and the stock market drop by a huge percentage, by one-
third or 40 percent or, in many cases, even more. It takes us to this 
point where the President said to us that he believes that FDR's New 
Deal actually would have worked, it actually was working, and that he 
just simply lost his nerve and didn't spend enough money. Can you 
imagine?
  When he said that to us back in, I think, early February, I didn't 
think he was completely serious about having more commitment to 
spending a massively larger amount of money than FDR did in the New 
Deal.
  But history hasn't served us very well in the way they reported the 
New Deal, because a lot of young people for two generations have been 
taught that the New Deal was a good deal and it got us out of the 
Depression.
  Mr. Speaker, by the time the stock market got back to where it was in 
October of 1929, Franklin Delano Roosevelt had been dead for 9 years; 
we had fought two wars, World War II and Korea, and finally in 1954 the 
markets got to where they were in 1929.
  There is no way that a logical objective historian can say that the 
Keynesian idea of borrowing and spending was a good deal when it was 
the New Deal. Nor is there any model in history that says that the new 
New Deal, the Obama Uber New New Deal, would be as good a deal as the 
bad old deal or a better deal than the old New Deal. This is the new 
New Deal, it is a bad deal, and Keynesian economics have failed 
wherever they have been tried.
  We need to turn ourselves around to real solutions, Mr. Speaker, real 
solutions for the American people, real solutions that will take 
America to the next level of its destiny, not the level down, not in 
the direction where we put our children and grandchildren and our great 
grandchildren in debt, not to where little babies born today are 
looking at thousands of dollars in debt, for every child that is born 
in America that they are going to have to work off. And we can either 
print a lot of money and devalue our currency, or we can suppress our 
economy for generations to come by all of this debt that is on us. And 
what can transform us as a country? What will ever grow our economy out 
of this anchor that we are now dragging? They are going to be pitching 
more anchors off the side of this great economic ship, of the greatest 
economic machinery that has ever been built in the United States of 
America, and our free market system.
  But in the bailout bill last fall, we pitched an anchor over the 
side, and we have been dragging that anchor. And then we have the 
stimulus plan that is another anchor we pitched over the side that we 
are dragging along bottom. And we have got the President's budget as 
another anchor that we are going to have to drag. And, now, they are 
talking about another stimulus plan. And burden after burden heaped on 
top of the American people, the free market system cannot sustain this 
kind of a load. We need to do something transformative.
  The transformative component that I am advocating here tonight is the 
one that Mr. Stearns of Florida advocated a little bit earlier, Mr. 
Speaker. And I'll take you this way on the fair tax, and that is this:
  I was audited one too many years in a row early on when I first 
started my construction business. The IRS showed up every year for a 
while, and they decided they were going to justify their existence by 
milking the little bit of blood that there was out of this fledging 
turnip of a company that King Construction was back in those years. And 
after they audited me one too many years in a row and I shut the doors 
on my business for 4 days so that I could be there and personally hand 
them the documents and justify the expenses, so that I could minimize 
the loss that was going to come to me from the IRS, because I had 
experience with that, and it cost me money, and I had to make a 
calculation on whether I was going to--I believe I did everything 
right. And I had to make a calculation on whether I was going to stand 
on principle and go and fight the IRS, in which case it was almost 
inevitable that I would lose my business in the process, because I 
couldn't afford to be away from my business and still keep it going. 
Or, borrow the money to pay the IRS a bill that I still don't believe 
that I owed in order to be able to keep operating.
  Well, that was one of the times when I didn't commit suicide on 
principle for the business, but I borrowed the money, paid the IRS. And 
then I went out and climbed in the seat of one of my bulldozers, and 
the smoke went up out of the exhaust stack, and it went out of my ears. 
And I began to think, what is the IRS doing in my office? Why are they 
impeding my production? Why are they making Monday morning quarterback 
decisions on me and my life when I am doing the best I can to comply 
with the laws that are passed by Congress? Well, I didn't know then 
that it was impossible for the new head of the IRS to figure out the 
Tax Code.
  So, Mr. Speaker, when Timothy Geithner can't figure it out even with 
Turbo Tax, and if Tom Daschle can't

[[Page H3481]]

figure it out, I guess I shouldn't have felt so angry. But I am glad 
today that I was angry, because I did a little fast-forward in my mind 
and it was, I want rid of the IRS. I want to be rid of that intrusive 
organization that can come in and take away the sweat of my brow and 
diminish the creativity and the energy and the entrepreneurial spirit 
that it takes for any business to get started, especially a small 
business, and especially a highly capital-intensive business like mine 
was. I understand how this works. So I just leaped to this conclusion. 
The next day I decided, I want rid of the IRS, and I want to repeal the 
entire Federal Income Tax Code.
  Now, I didn't think about how you get that done. I am working on how 
you get that done today. But what I thought about was, how do you 
replace the revenue? Because the government has to have some money to 
run on, and the only way you replace the revenue is if you go to a 
national sales tax, and it starts with about three principles to know:
  Businesses transfer the cost of those taxes on to their customers. 
Yes, I wrote a check for those taxes, but I had to pass those costs on 
to my customers if I was going to stay in business. Corporations don't 
really pay taxes, businesses don't pay taxes. They are tax collectors 
for Uncle Sam.
  But here is the transformative principle No. 1: Ronald Reagan, quoted 
by Mr. Stearns of Florida, and I will give you a different quote from 
Ronald Reagan. He said, ``what you tax, you get less of. A tax is a 
punishment.'' But Uncle Sam, the Federal Government, has the first lien 
on all productivity in America.

                              {time}  1645

  If you have earnings, savings or investments, Uncle Sam is there with 
his hand out. When you walk in and punch the time clock at 8 o'clock on 
Monday morning, Uncle Sam is right there figuratively with his hand 
out, and you work until he gets what he wants. Then he puts that in his 
pocket and figuratively goes away, and then you can start working for 
the rest of the interest.
  If it is earnings, savings or investment, if it is productivity, the 
Federal Government has the first lien on all productivity in America. 
So a taxation is a punishment. It is a disincentive. We have less 
production than we would have otherwise because we tax it first. We tax 
all earnings, savings and investment. If you go to a national sales 
tax, ``the Fair Tax,'' and tax the last stop on the retail for personal 
consumption of sales and service, that way you're actually levying the 
tax against the people that are the consumers that are using it. So we 
lift the tax off of all production in America, off of all earnings, 
savings and investments in America, then we cut those anchor chains 
that we are dragging. The cost of tax compliance is a cost to this 
economy, because we have lawyers that are tied up and business decision 
makers who have to, in every single business decision, do a tax 
calculation. We eliminate all of that and take that burden off and cut 
those anchor chains that we are dragging, and we turn those brains of 
H&R Block and tax lawyers, tax accountants and people that are 
strategizing business off of the advice that they get from their tax 
lawyers, and there are those people that have to make those decisions 
without the benefit of counsel, all of that mental energy, all of that 
time goes from, I'm going to just say this in a nice, gentle way since 
it is St. Patrick's Day, it goes from the parasitic sector of the 
economy to the productive sector of the economy. And the productive 
sector is the free market sector that produces goods and services that 
has value to people. That is the first transformative thing about the 
Fair Tax, of taking that burden off of the production, the taxation 
that is on production, and cuts all of those anchor chains, and it puts 
the taxation over on consumption where we can use a little bit of an 
incentive for savings and investment. And it lets people decide when to 
pay their taxes by when they make their purchases.
  I watched a little YouTube clip of the majority leader in the United 
States Senate, Harry Reid. It was just not quite a year ago. He said, 
``we have a voluntary tax system.'' Well, it is hard to make that 
argument stick. No. We have a confiscatory tax system. It is not 
voluntary. You don't today get to pay taxes when you want to. If you 
fail to pay your taxes, the IRS will show up, and they will charge you 
interest and penalty for failure to pay your taxes. If you still don't 
pay your taxes, they will garnish your wages. They can come in and put 
a title on your vehicle, assign themselves a new title to the vehicle, 
sell that vehicle and credit your account. But the interest and the 
penalty probably is going on faster than you can sell a car to get that 
back out of there. There is nothing that the IRS can't touch if they 
are going to collect your taxes. And when they are done, if they think 
you have avoided taxes, they will encourage prosecution. We have people 
in federal penitentiaries today for tax avoidance. So it is a 
confiscatory, mandatory taxation today.
  I want to go to what Harry Reid calls a ``voluntary tax system.'' 
That is the Fair Tax. People volunteer to pay the tax when they make 
their purchases. There are other components to this, but I want to make 
one more point before I yield, and that is the other transformative 
point. The first transformative point is that what you tax, you get 
less of. The Fair Tax takes the tax off of all production in America. 
All earnings, savings and investment is not punished. You get to keep 
it.
  The other transformative component is this, and a lot of people have 
been credited with this statement. I will give the general one, Mr. 
Speaker, and then we will perhaps give credit all where it is due 
before this discussion is over. But there have been many of our 
Founders and statesmen that have referenced what happens to a country 
that claims to be a democracy, and I will call us a constitutional 
Republic, when more than half of the people figure out they can vote 
themselves benefits out of the public Treasury, on that day our 
democracy ceases to exist. The future of the Republic ceases to exist. 
Many of us think we have crossed that line already. And if we listen to 
the promises that were made in the last campaign that came from our now 
President, Mr. Speaker, about how everybody was going to get a tax cut, 
even those that weren't paying taxes were getting tax cuts, those are 
refundable tax credits. It is a transfer of wealth from the wealthy to 
the unwealthy, a transfer of wealth internally. When that happens, when 
the American people become dependent upon someone else for their 
livelihood, when they lose their sense of self-responsibility, that 
sense of self-sustainability, when they stop teaching their children, 
Mr. Speaker, that they cannot be a burden on this society, that they 
must be a contributor to this society, then our freedom is diminished, 
and perhaps our constitutional Republic ceases to exist.
  Mr. Speaker, I will submit this. There is a way we can pass this Fair 
Tax, and if we do so, no one any longer pays any federal income tax. 
Everybody gets roughly 56 percent more in their paycheck. And how do we 
transform this sense of responsibility? In this way, in billions of 
transactions at a time. When little Michael Dicks stepped up to the 
counter when he was 8 years old, he said, ``I want to buy this.'' He 
put a box of Skittles on the counter. It was 89 cents. He counted out 
his 89 cents. The lady at the checkout register said, ``that will be 
fine. I need 96 cents.'' And he looked at his father and said, ``Dad, 
I've only got 89 cents. The price says 89 cents and the lady at the 
register says you have to pay the sales tax for the Governor.'' He 
looked at his father with a pained look in his eyes. He said, ``Dad, I 
have to pay tax on Skittles?'' ``Yes, you have to pay tax on Skittles, 
Son.''
  Think what that does. If every little child growing up in America, 
when they buy their Skittles or their Barbie doll clothes or their 
baseball cards, or whatever they spend their money on, if they have to 
put a couple of dimes up on the counter for Uncle Sam, they will be 
reminded at every transaction, millions of young people, billions of 
transactions, how expensive our Federal Government is. When that 
happens, it will slowly transform America, the core of America, the 
core of American responsibility. The two things transformational are we 
stop punishing production and we raise generations of fiscally 
responsible, independent-minded Americans. Those are the two 
transformational principles.

[[Page H3482]]

  I would like to go to whichever one of my colleagues is the most 
urgently here. So, I would be happy to yield then to the gentleman from 
Georgia, Mr. Nathan Deal.
  Mr. DEAL from Georgia. I want to thank the gentleman for yielding. I 
want to join him in talking about the Fair Tax issue and to thank my 
colleague, John Linder, who is here on the floor, who is the primary 
sponsor of this legislation in the House.
  We all talk about change. We all talk about reform. I can't think of 
a single bill that is before this House, in committee at least, that 
would have the transformational effect of passing a Fair Tax. As 
the name implies, it is a matter of fairness. It would do many things, 
and you're going to hear, in addition to Mr. King who has already 
addressed the topic, you're going to hear others today talk about some 
of the benefits that would be derived from this kind of legislation.

  First of all, it gives people a choice, a choice over how they spend 
their money. We know that our country is in a deficit in terms of 
savings. This approach to taxation would say to every American, if you 
choose to save, then you're going to be able to do so, and the 
government is not going to tax you as a result of making that choice. 
If you choose to spend and to consume, then that is the basis on which 
your taxation will be founded. Those are the kinds of things that give 
people more of an involvement and a control over their own financial 
destiny. Of course, as has been referred to, it does much to restore 
our balance in the international trading community.
  Coming from a part of the country in the Southeast which was the old 
textile belt, we have seen those jobs virtually disappear. It happened 
for a variety of reasons. But one of the things that made it at a great 
disadvantage was the tax structure that our country has in place. If we 
are going to compete in the international marketplace, then a system 
that does not add on a cost at every stage of the production cycle in 
the form of taxation is the best way to begin to make us competitive. I 
think it will be a step toward having those industries, many of whom 
have left for a variety of reasons, but taxation being one of them, to 
see them return back to our shores and to restore those job 
opportunities back to the American people.
  For this and many other reasons, I support the Fair Tax. I urge those 
committees in this House who have jurisdiction over that issue to 
discharge it from their committee and give this House the opportunity 
for the elected representatives to express the will of their 
constituents on this very critical and important reform, the Fair Tax. 
I thank the gentleman for yielding.
  Mr. KING of Iowa. I thank the gentleman for coming down and weighing 
in on this subject matter. I appreciate each of you as you weigh in. 
Hopefully we will be able to do this more often in the future weeks.
  I would like to then yield to the gentleman from Florida (Mr. 
Miller).
  Mr. MILLER of Florida. I thank the gentleman for yielding. Thank you 
for setting up this time this evening to talk about the Fair Tax, 
something that a great many of us, in fact 51, have signed on as 
cosponsors of this particular piece of legislation. I do salute my 
friend, Mr. Linder of Georgia, for continuing to keep this piece of 
legislation out in the forefront. It is incumbent upon us as members of 
the legislative body to do what we can to bring things to the floor for 
debate. But it is also incumbent on people out there in just good old 
regular America to call their Members of Congress, to inform them of 
what they want.
  I think of Skip and Loretta Akin back in my district who, every time 
there is a Fair Tax issue that comes up, they are a part of it. They 
are wearing their Fair Tax shirts. They have been to the city of 
Atlanta talking about the issue and bringing the good news forward. But 
there are just a lot of people that aren't listening. We are in great 
economic peril now. We all know that. We all have compassion. We want 
to solve the problems that are out there. But we hear more and more 
about taxes. We hear class warfare, if you will. And again, my 
colleague has just talked about the issue of choosing where you spend 
your money, choosing if you're going to buy something. It even goes 
beyond that. It is choosing whether you buy something new or whether 
you buy something existing or used where there won't be a sales tax on 
it. What is amazing to me is that besides the fact that it does away 
with all of the other taxes that are embedded out there, it is 
something that you alluded to, Mr. King, just a little while ago, and 
that was that it prohibits funding of the IRS after the year 2013. Can 
you imagine no Internal Revenue Service after the year 2013? Why? 
Because each and every one of us remits at the cash register at the 
point of sale. We remit the taxes there. So yes, it has already been 
alluded to, in the administration, where the Treasury Secretary that 
our President chose could not figure out how to pay his taxes among the 
overly complicated Tax Code. I hope that Secretary Geithner will join 
my colleagues and others in supporting this particular bill.
  Lastly, Mr. King, I would like to also remind my colleagues that 
there are Fair Tax rallies that are being held all across the country. 
The next one that I'm familiar with is in Jacksonville, in my State of 
Florida, on the 11th of April. Unfortunately, I will not be able to be 
there as I will be somewhere overseas visiting with our troops during 
that time of our break. The people that are keeping this issue forward 
and in the forefront today are the ones that need to be saluted as well 
as those that continue to talk about it. I encourage you and will be 
here every time that you want to bring the Fair Tax issue to the floor.
  I thank you again for bringing this to the floor.
  Mr. KING of Iowa. I thank the gentleman from Florida (Mr. Miller) for 
coming down and standing up for the one big policy before this Congress 
that will give us back our freedom. He wouldn't be the only individual 
from Florida who would be on and be a supporter of the Fair Tax. As I 
cast my eyes around this Chamber, Mr. Speaker, I pick up another one. 
It would be the gentleman from Florida (Mr. Mica) whom I would like to 
yield to and ask him if he can add to this cause that is led by Mr. 
Linder. As I came to this Congress, I looked around to find John 
Linder, because I knew that I wanted to tie up with him on this Fair 
Tax cause.
  I yield as much time as he may consume to the gentleman from Florida 
(Mr. Mica).
  Mr. MICA. I thank you so much. I thank the gentleman from Iowa for 
yielding to me. I thank him for his leadership and also for calling 
this Special Order tonight to talk about the Fair Tax and about the 
subject of taxation which has sort of gotten brushed under the carpet 
and not been considered in the 111th Congress, or for that matter in 
the past Congress. The Fair Tax has not been given a fair hearing or a 
fair chance.
  I can't come before the House and talk about the subject without 
complimenting the gentleman from Georgia (Mr. Linder). Mr. Linder 
certainly is an inspiration for moving this proposal forward, not only 
in Congress, but across the Nation. We were pleased to have him in my 
Congressional district to speak on the Fair Tax and other matters 
before Congress. There is no question that without John Linder, this 
topic would be totally forgotten both in the Congress and across the 
country.

                              {time}  1700

  I come before Congress at a time when we have a new administration, 
and I think we all wish the President well. We wish him success. The 
country is hurting economically, and we don't want one person without a 
job. We don't want one person who has a problem paying their mortgage 
or losing their home. We don't want people to suffer because they don't 
have health insurance or an opportunity for education or the great 
opportunities that this Nation provides.
  Unfortunately, this new administration also has not considered the 
Fair Tax. I think they have considered or are considering just about 
every other tax. I don't have enough time to cite all of them, but if 
you ever want to see new taxes, look at the budget that has been rolled 
out by the new administration. Some are hidden. Some have fancy, clever 
names. There is the cap-and-trade which would impose higher costs for 
energy users. Someone told me it is over $3,128 annually in higher cost 
for every household. That is a new

[[Page H3483]]

tax. It has a clever name, but they have no problem imposing another 
tax on people who are already hurting and having difficulty in paying 
their energy bills.
  The new administration is looking at again a host of other ways to 
tax people, but not looking at the Fair Tax, which would probably be 
the simplest, one of the fairest means of assessing costs to run our 
government. Now they are talking about new taxes on small business, 
taxes for anyone who makes $250,000 a year, taxes on charitable giving, 
taxes on certain housing and financial transactions, bringing back the 
death tax, and there are some taxes that under the Bush administration 
needed to be extended and they will let them expire.
  So I think they are finding every way to tax but not looking at 
probably the simplest, most honest approach to again raising revenue, 
and that we think is the option of the Fair Tax.
  It is kind of interesting, too, in the new crowd we have folks we 
find don't mind raising new taxes because a lot of them haven't been 
paying those taxes or are having difficulty explaining both to 
congressional committees and the American public and others that they 
couldn't figure out the taxes, or their highly paid CPAs or accountants 
couldn't figure out the morass of regulations and all of the terms in 
the thousands of pages of Tax Code that everybody has to comply with. 
This is not a laughing matter, folks. We have buried ourselves in tax 
law that again would probably reach higher than me if it was all 
stacked up here on these desks at which I am pleased to speak tonight.
  But again, I think that it is vital and I would appeal to the 
leadership of the House and those on the Ways and Means Committee and 
other committees in the Congress to give the Fair Tax a fair chance. 
Give it a fair hearing. Give it a chance to be debated in committee and 
here on the floor of the House of Representatives. Instead of this long 
list of new taxes that we hear coming out almost daily from the new 
administration to raise revenue, to look at a means of a very simple, 
economical, efficient reasons of raising revenue, eliminating the red 
tape and eliminating the questionable thousands of pages that people 
are having difficulty with, whether they are high Wall Street smart 
executives being considered for the highest posts in our land, or the 
average taxpayer who is struggling to compile their taxes.
  I know that people are saying that Mr. Mica made this up, but I came 
from my office and almost tripped over a little stack that I have on 
the floor that I have to get to this week, and that is my taxes, to 
prepare that complicated--and thank goodness I have been out of 
business and the private sector for some time--so what used to be 
probably 2 or 3 inches of tax returns and sitting down for some time 
with my CPA and accountant is a much smaller, less complicated affair; 
but nonetheless, it is complicated. And many people, obviously, have 
difficulty complying with the thousands and thousands of pages and 
rules and regulations that are interpreted differently.
  So this is the time, I think, to give this proposal which has been 
developed by some here in Congress a fair chance, a fair hearing. Let's 
not sweep it under the carpet for another 2 years, but let's give it an 
honest hearing and look at how we can eliminate a huge bureaucracy and 
red tape. And so important today in creating jobs, whether it is in my 
district which is hurting for jobs, or across the country, the issue of 
competitiveness in the world markets, and nothing would allow us to 
compete more than a fair and equitable tax system that many other 
nations in the world have turned to, and many of our competitors have 
turned to, which make us less competitive in our jobs and products, and 
ability to compete in this global market.
  I am here tonight to join my colleagues in asking that we give the 
Fair Tax a fair hearing and a fair chance and fair consideration in the 
Congress rather than the host of taxes that are being cast upon us and 
the Nation to pay by the administration at this time.
  I thank you for the opportunity to join you tonight for a few minutes 
in this Special Order. And again, I praise your work and hope that we 
get a fair hearing on the Fair Tax.
  Mr. KING of Iowa. I thank the gentleman from Florida. I would just 
add that the Fair Tax does everything good that anybody else's tax 
proposal does that is good, it does them all, and it does them all 
better. And I do that right before I yield to the real American leader 
on the Fair Tax, an individual whom I met when I was a State legislator 
at an American Legislative Exchange Council meeting, and I heard from 
John Linder in that meeting. I had no idea at the time I was going to 
get to be his colleague, and I had no idea at the time I would be able 
to yield some time to our national leader on the Fair Tax, Mr. John 
Linder.
  Mr. LINDER. I thank the gentleman for yielding and for organizing 
this Special Order.
  I think it might be good right now to repeat what the Fair Tax is.
  The Fair Tax would repeal all taxes on income. No more corporate 
income tax, personal income tax, no more payroll tax. Most Americans 
pay more in payroll taxes than income taxes. That pays for Social 
Security and Medicare. We would get rid of the gift tax, the estate 
tax, the alternative minimum tax. No more tax on income at all. And 
instead, we would tax a national sales tax on everything that you 
purchased.
  On average today, the average income American gives the government 33 
cents out of every dollar he earns. Under the Fair Tax, they would give 
the government 23 cents out of every dollar they spend and raise the 
same amount of money.
  Now we are going to come to this point because economic forces are 
going to drive us to this point. I had the privilege of visiting with 
Chairman Bernanke last week or 10 days ago or so. One day, whether I am 
here or not, this Congress is going to decide the only way to go is to 
a more fair tax, that taxes not what you put into society, but what you 
take out.
  Today we know that on average, 22 percent of what you pay for is the 
embedded cost to the IRS. With all of the companies that it takes to 
get a loaf of bread to your table, there are payroll taxes, income 
taxes, there are compliance costs, they get embedded in that price 
system. That is the only way a business can pay a bill is through 
price. And you pay that business' light bill, their rent, and their tax 
bill.

  If we have a price system that is inflated by 22 percent because of 
the embedded cost of the IRS, that makes us less than competitive in a 
global economy and jobs move into better tax jurisdictions offshore.
  Secondly, the Tax Foundation said that last year we spent $350 
billion filling out IRS paperwork. We spend another $125 billion a year 
calculating the tax implications of a business decision. If we are 
spending in excess of $450 billion a year just to fill out forms to 
send them in, that is inefficient. That is stupid. It is like paying 
for a dead horse. You get nothing from the transaction.
  Third, the underground economy is about $2 trillion a year. And the 
more complex our code gets, the easier it is to go underground and 
avoid paying taxes. They are not contributing.
  Fourth, there is today in offshore financial centers in dollar-
denominated deposits $13 trillion. My point to Chairman Bernanke was 
this: that is money that would be on shore in our markets, in our 
banks, if we didn't have an IRS.
  All four of those issues: the embedded costs, the compliance costs, 
the underground economy, and the offshore investments, would be 
eliminated and fixed by getting rid of the IRS. None of them will be 
touched by nibbling around the edges of our current tax system.
  Fifth is this point. We are having a serious problem starting in real 
estate in America because people can't afford to pay their mortgages. 
Some made bad choices, but that is a simple fact. Under the Fair Tax 
the average income earner would have a 50 percent increase in take-home 
pay. They would pay their mortgages. Now all of this stuff gets fixed 
in the economy without spending $700 billion here and $700 billion 
there without raising taxes and everything, as Mr. Mica said.
  Lastly, this point: we have never taxed wealth in America; we tax 
wages. The first thing very wealthy people do is stop getting wages so 
they pay 15 percent on capital gains and dividends, and if the Obama 
plan goes through, they will pay a 20 percent tax. But they don't pay 
anything to Social Security

[[Page H3484]]

and Medicare because they have no wages.
  When Mrs. Kerry had to release her tax return in 2004 during the 
Presidential election, it showed she had $5.1 million in income the 
previous year. She paid a 12 percent tax on it. She paid nothing into 
Social Security and Medicare. She had no wages. This taxes wealth when 
it is spent. It is fair to assume that she spent a good part of that $5 
million on several houses and travel. And in that case if she had spent 
it all, she would have put $400,000 into Social Security and Medicare, 
but we don't tax wealth when it is spent today.
  Now what would happen if all of this comes to pass? Our studies from 
outside consultants say that in the first year we would have a 10.6 
percent increase in the GDP. I asked Chairman Greenspan when he was 
chairman if that was inflationary, and he said not at all. We would 
have a 72 percent in capital spending, and we know that real take-home 
pay for workers increases in exact correspondence to capital spending.
  We would have jobs coming here. An informal study done at Princeton 
many years ago asked 500 international companies located in Europe and 
Japan: What would you do in your long-term planning if the United 
States 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.
  If you are selling to Detroit, you would rather be in Detroit because 
transportation costs are high. But we have driven them off with tax 
policy.
  We have lots of debates on the floor of this House, but punishing 
people who go offshore, locking up their accounts, they are not leaving 
because they hate America, they are leaving because we kicked them 
offshore with confiscatory tax policies.
  This will come to pass, and it will be fair, and I hope one day we 
can give back to the American people and the freest society ever known 
the privilege of anonymity. No one should know as much about us as our 
Tax Code. We should have no agency of the Federal Government that knows 
more about us than we are willing to tell our children. Under this 
system, there would be no agency that knew how you made your money, how 
much you made, or how you spent it. You could anonymously go into any 
store, buy something, have the tax collected there just like we do in 
45 States with the sales tax, and we would contract with those States 
to collect the money and remit it to us. We would have a system of 
government that was fair.
  Let me just close with this comment. During the debate in 1912 when 
income tax was hot and heavy in the United States, one southern Senator 
made a statement that was considered so ridiculous and outrageous that 
he was laughed off the floor of the Senate. Here is what he said. He 
said, ``Mark my words, if we pass this, in time they will be taking 10 
percent of everything you earn.'' It was considered ridiculous, but it 
did bring back to mind my favorite country song, if 10 percent is 
enough for Jesus, it ought to be enough for Uncle Sam.

                              {time}  1715

  Mr. KING of Iowa. I thank the gentleman from Georgia. I know that 
this country is going to call upon him many times as we move forward in 
this debate.
  I want to make the point that I have been challenged in the past, and 
people will say, well, I know that the Fair Tax is a great idea, I'm 
convinced that you're right on the economics of it--in fact, thinking 
economists won't disagree; but the rebuttal that I get is, well, you 
can't get it passed. My answer to that is, if it gets passed under two 
different scenarios. One is, if we elect a President who has run on it 
and receives a mandate from the American people for the Fair Tax. And 
the other one is, when you are in a downward economic spiral and 
Americans are actively looking for solutions, this is it.
  I will yield back to the gentleman from Georgia.
  Mr. LINDER. I think that is correct. And in the last Presidential 
election, Governor Huckabee did run on the Fair Tax. In your State, he 
won the Republican primary. And he told me he ran because of the Fair 
Tax Organization in Iowa. We have organizations in 50 States, and most 
States have dozens of them. These are people who, no matter that 
happens to me or you or the folks right now pushing this idea, they are 
not going to let it die. If you Google ``Fair Tax,'' you will find that 
they are meeting in every State, every week. Somewhere along the way it 
winds up in the literature.
  The American people are going to demand this. If you remember the 
debates from the Republican primary, it came up in virtually every 
debate and brought down the house. So I don't think it is going to go 
away because the American people are not going to allow it.
  Mr. KING of Iowa. I thank the gentleman. This good idea, I don't know 
that it has ever lost a debate and probably never will.
  I am looking around and I am seeing a lot of my colleagues from south 
of the Mason-Dixon line--I'm glad there is one from the north side of 
the Mason-Dixon line. But before we go there, I have never met a 
Republican from Tennessee I didn't like. And we have one on the floor 
with us tonight, Mr. Speaker, and that's Mr. Duncan from Tennessee. I 
would be happy to yield.
  Mr. DUNCAN. I thank the gentleman from Iowa for yielding.
  I want to say, first of all, that I will be very brief because there 
are several other people here who wish to speak. But I want to commend 
my friend, John Linder, who has worked so hard in advocating the Fair 
Tax. And I especially want to commend my good friend, the gentleman 
from Iowa (Mr. King), for calling this Special Order tonight. The 
gentleman from Iowa has been a real leader, a real champion in the 
fight to reduce our taxes and to try to bring Federal spending under 
some type of control.
  This is my 21st year in Congress. And I'll tell you, I have seen some 
pretty mindboggling spending in that time, but even I have been shocked 
and astounded by all the spending that we have seen lately, and it just 
seems to be almost completely out of control. And in all this spending 
and legislation that we passed just in the last few months, in the 
midst of that, we've raised our national debt limit to 12 trillion, 104 
billion. That's a mindboggling, incomprehensible figure. And nobody can 
really understand it or relate to it, but David Walker, as many of you 
know, the former head of the GAO, the Government Accountability Office, 
has been going around this country trying to be a Paul Revere to sound 
the warning to say that as troublesome and worrisome as the $12 
trillion national debt is, that an even greater problem is what he 
estimates are now $56 trillion in unfunded future pension liabilities.
  And I used to say that what we were doing to our children and 
grandchildren is terrible, but actually now I say what we're doing to 
ourselves, because I don't believe it's going to be more than 10 or 15 
years, if that long, before we're not able to pay all our Social 
Security and Medicare and veterans' pensions and all of the things we 
have promised our own people with money that will buy anything. What we 
will do, we will do what governments all over the world have done when 
they have gotten in this situation, they have just started printing 
more money. And that never works; it's like a ball going downhill. It 
just means that what people thought was a good pension is not going to 
work, not going to support them at all.
  And every place in this world where the people have let the 
government get out of control, what has happened is there have been a 
few elitists at the top, it has basically wiped out the middle class, 
and there has been a huge starvation class because that is the only 
thing big government is good at is wiping out the middle class.
  I will say this; there is no good reason why we should have a tax 
code nearly as complicated, convoluted, and confusing as the one we 
have, where I have read that even half the advice the IRS itself gives 
out is wrong.
  The Fair Tax certainly has a lot of merit to it. Mr. Linder has 
pointed out so many things. But right now the people who are paying 
their taxes, their honest share of taxes, they're paying the taxes for 
the illegal immigrants and the drug dealers and those who work in the 
underground economy. Under the Fair Tax, the illegal immigrants and the 
drug dealers would have to start paying their fair share of taxes.

[[Page H3485]]

  In addition to that, we have--I think it's 65 million foreign 
tourists. They would help us pay a Fair Tax. They don't help us pay an 
income tax. And as Mr. Linder just said, we now spend $350 billion just 
in filling out the tax forms. It is ridiculous that we have a system 
that is that complicated.
  As the gentleman from Iowa pointed out a short time ago, the 
administration has submitted a $3.9 trillion budget. I noticed that Jim 
Cramer, the famous stock analyst who is on television every night, he 
said President Obama's budget may be one of the great wealth destroyers 
of all time. And that is a significant statement coming from a man who 
has been a six-figure contributor to the Democratic Party. He said 
President Obama's budget may be one of the great wealth destroyers of 
all time. We don't need that, especially in this type of economy.
  We don't have enough people who realize this; there is waste in the 
private sector just like there is waste in the public sector, but the 
waste in the private sector pales in comparison to the waste that is in 
the public sector because a business that continually wastes money will 
very soon go out of business, but a government agency that wastes money 
just seems to get increased funding. So what that means is that every 
dollar you can keep in the private sector will do more to create jobs 
and keep prices low than will any dollars turned over to the 
government. Yet, I saw on Lou Dobbs last night that in this past year, 
we've lost four million jobs in the private sector while government 
employment has increased by 151,000 over the past 12 months. At the 
same time that individuals and families all over this country are 
having to cut back, we are giving increases to the government.
  The Washington Post, just after the House passed the stimulus--and 
they supported it, but they said it would mean ``a massive financial 
windfall''--that's the words they used--``a massive financial 
windfall'' for Federal agencies. So that is who is coming out good in 
this, the Federal bureaucrats, Federal agencies. And this area, which 
was already one of the wealthiest areas in the country, is going to 
come out just fine under this stimulus package and under this increased 
spending we're doing.
  But about the time we were voting on this stimulus package, 203 
leading university economists ran a full-page ad in the Washington 
Times and they said this; ``We, the undersigned, do not believe that 
more government spending is a way to improve economic performance. More 
government spending by Hoover and Roosevelt did not pull the United 
States economy out of the Great Depression of the 1930s. More 
government spending did not solve Japan's ``lost decade'' in the 1990s. 
As such, it is a triumph of hope over experience to believe that more 
government spending will help the U.S. today.''
  And these economists continued and said this: ``To improve the 
economy, policymakers should focus on reforms that remove impediments 
to work, saving, investment, and production. Lower tax rates and a 
reduction in the burden of government are the best ways of using fiscal 
policy to boost growth.''
  I will just wind up with a couple more comments. Edward Rendell, the 
Governor of Pennsylvania, when he was the Mayor of Philadelphia, 
testified in front of a congressional committee and he said this; ``The 
problem with government is that there is no incentive for people to 
work hard, so many do not. There is no incentive to save money, so much 
of it is squandered.'' And that pretty much sums it up. And that pretty 
much sums up why the more money you turn over to the government, the 
less it helps the economy. It helps those who are in with the 
government, but if you want to really help the poor people and the 
lower income people in this country, then you will try every way 
possible to keep more money in the private sector.
  We are going in the opposite direction today. I noticed that even the 
liberal New York Times reporter asked President Obama a few days ago if 
he was a socialist. And that is the path we're headed down. They may 
try to deny it. Socialism, though, has not worked anyplace in this 
world; if it had, the Soviet Union and Cuba would have been heaven on 
Earth.
  I could say more, but I will stop because others want to speak. Once 
again, I want to commend my friend, the gentleman from Iowa, for 
bringing us together here tonight. Thank you very much.
  Mr. KING of Iowa. I thank the gentleman from Tennessee for coming to 
the floor and engaging in this discussion.

  Mr. Speaker, as we move through this and we get down to the last 10 
minutes available in this hour, I would be happy to yield to the 
gentleman from Georgia (Mr. Gingrey).
  Mr. GINGREY of Georgia. I appreciate the gentleman yielding.
  I am very happy to be here this evening to address my colleagues on 
this important issue of the Fair Tax and pay tribute to our colleague 
from Georgia, Representative John Linder. Representative Linder, from 
the Seventh Congressional District of Georgia, is a long-term Member of 
this body, is former chairman of the NRCC, long-term vice chairman of 
the Rules Committee, and now a member of the Ways and Means Committee. 
And Mr. Speaker, he knows of what he says in regard to the Fair Tax.
  I think John is absolutely right. And I am just, as I say, proud to 
be here and be his colleague and to have an opportunity to weigh in, in 
support of the Fair Tax. My only regret--or one of my biggest regrets--
since I've been here is that when we had the majority on our side of 
the aisle, we lost the opportunity, didn't take the opportunity. It 
wasn't because of John's lack of ethics, however. And I think he is 
absolutely right; if we live long enough--Lord willing--we're going to 
see the elimination of the 16th amendment, and that is, obliterate the 
income tax and replace it with the Fair Tax. I think this country will 
be much more competitive.
  I could stand here and take up the rest of the time, but I know my 
other colleague from Georgia is here and he wants to speak.
  I want to thank the gentleman from Iowa for conducting this Special 
Order tonight. And I thank him for the time that he gave me to weigh 
in, in support of John Linder and the Fair Tax. And I yield back.
  Mr. KING of Iowa. I thank the gentleman from Georgia, my good, 
longtime friend from the first day I arrived in this Congress. I look 
forward to more of these opportunities in this fashion.
  To conserve our time, I will happily and quickly yield to the 
gentleman from Georgia, Dr. Broun.
  Mr. BROUN of Georgia. I thank the gentleman for yielding.
  Mr. Speaker, I believe that if a study were done on facial 
expressions made during a word association test, the results would show 
that most people's facial expression given the word ``taxes'' would be 
strikingly similar to that as when they were asked to recall the last 
time that they stubbed their toe or they smashed their finger with a 
hammer. Just as each physical injury has left a memory of pain and 
discomfort, so has each tax season burned a memory of stress and anger 
into the minds of most Americans.
  As many of you may know, I am an original-intent constitutionalist. I 
believe the Federal Government was not established to tax and spend; it 
was established to protect freedom and liberty. Yet, here we are today 
trying to solve our Nation's economic woes through an outdated and 
failed philosophy of more taxes, more spending, more borrowing, and an 
overall belief that more government is the solution. How many times, 
Mr. Speaker, will we hit ourselves in the thumb with an economic hammer 
before we realize that this is not the way to approach our problems? As 
the great Winston Churchill once said, ``For a nation to try to tax 
itself into prosperity is like a man standing in a bucket and trying to 
lift himself up by the handle.''
  With the tax filing deadline just around the corner and many Georgia 
families struggling to figure out how they will pay off Uncle Sam this 
year, now is the time to do away with our terrible tax system, scrap 
this tax-and-spend mentality so we can go about a better way to get 
this country back on track.
  Mr. Speaker, I would submit that one great way to reform our tax 
system would be to institute the Fair Tax, which I'm an ardent 
supporter, a system that would replace all Federal

[[Page H3486]]

taxes with one single retail sales tax. Just imagine the money that 
would flow into our economy if hardworking Americans were actually 
allowed to keep more of their money that they earned, if they didn't 
see increasing amounts being taken by a government that can't even pass 
a balanced budget, much less operate on one.

                              {time}  1730

  However, it would be foolish to only discuss reforming our tax system 
without addressing its soul mate, and that is government spending. 
Skyrocketing growth in government spending by both Congress and 
Presidents, regardless of political party, has grown to a level of 
astronomical proportions. Spending by the Federal Government has more 
than doubled since 1980 and tripled since 1965. Recent history has 
shown us that cutting taxes is not a viable solution if we do not also 
address our gluttonous spending.
  This government exists for the sole purpose of serving the people, 
but for too many years, government has been merely serving itself. It 
has taxed and spent itself into a debt that shows no signs of receding.
  You see, this is something that seems to have been forgotten by 
Congress and by this administration. To spend these huge increases as 
they are proposing, they must first take it way from people through 
taxes. And what happens when there are not enough taxes to cover all 
the increased spending? They simply increase taxes, often through new 
and creative methods, while also increasing our Federal debt.
  In 1930 the U.S. Tax Code was a brisk 500 pages long. Today it has 
swollen to more than 45,000 pages, full of provisions that too often 
produce negative results. A Fair Tax system, empowering the American 
people to decide how much taxes they'll pay through their own 
purchasing decisions, will force this spending-engorged government to 
change their ways and enact fiscally responsible budgets.
  In addition, a Fair Tax system will move the responsibility of taxing 
citizens back to the States, simplifying the process, and remove the 
temptation by Congress and the administration to feed their growing 
appetites at the smorgasbord that is our current tax system.
  Often when I'm at home talking with my constituents in Georgia about 
taxes, I tell them if 10 percent is good enough for the Lord, it ought 
to be good enough for Uncle Sam. We have to reduce the size of 
government and government spending to achieve this heavenly goal. Under 
the original intent of our Constitution, 10 percent would be more than 
enough to fund all of the functions of the Federal Government as 
envisioned by our founders.
  I call on my colleagues to listen to the American people who are 
demanding a better system. We can and should give it to them by 
reducing Federal Government spending and reforming our tax system by 
enacting the Fair Tax.
  I congratulate my dear colleague from Iowa for allowing me to speak 
and bringing this very, very important issue to the forefront of the 
American people.
  We have to stop spending. We are spending too much. We are taxing too 
much. We are borrowing too much. And it's going to kill our economy. I 
call this a steamroll of socialism being shoved down the throats of the 
American people that's going to strangle our economy. It's going to 
slay the American people economically if we don't stop it. Thank you so 
much.
  Mr. KING of Iowa. I thank the gentleman from Georgia for coming down 
and joining in this discussion, Mr. Speaker, and I am hopeful that we 
will have many more like this.
  I want to reiterate a point that I made at the conclusion of Mr. 
Linder's delivery, and that is, as he went down through the list of all 
the taxes that get eliminated, corporate and personal income tax and 
payroll tax and inheritance tax and the list goes on and on and on, the 
Fair Tax provides an incentive for earnings, savings, and investment. 
Here's my point, and I want to make this clear and I will stand on it 
and I'll defend it and I have made this statement across the country, 
and it is this: The Fair Tax does everything good that anybody's tax 
proposal does that is good for our economy and the American people. It 
does all of them and it does them all better.
  Now, that sounds like a real big position to take, and I'm taking it 
because I'm solid in that, and I'm happy to debate that. I'd be happy 
to debate anybody from the other side of the aisle that can come over 
here and tell me that any part of that's wrong and then let's have that 
discussion. When you take the punishment off of people who are 
producing, earning, saving, and investing, and you let them earn, save, 
and invest all they want to produce, and then you provide that 
incentive for that savings and investment on the other side, as John 
Linder said, the Fair Tax eliminates the taxes on capital and labor.
  Now, Adam Smith said the sum total of the cost of anything that you 
produce or buy is the cost of the capital plus the cost of the labor. 
But we are taxing all capital and labor in America under the Federal 
income tax along with the whole array of other Federal taxes that we 
have. We have to be able to give that all back and let people earn, 
save, and invest all they want to earn, save, and invest. And I just 
urge that this Congress take a look at this Fair Tax. And let's get 
some hearings. Let's get something moving through the Ways and Means 
Committee. Let's continue to make this point.
  Also, I will say this: I came to this conclusion in 1980. That's 29 
years ago. I have looked at this Rubik's Cube of the Fair Tax every way 
I can possibly turn it. I turn it one way and another way. The colors 
show a little bit differently, but every time I turn it again, it looks 
better and better and better. The more I know about it, the better I 
like it. And I don't know if anybody has studied it as long as I have, 
29 years, before there was anybody that had any science, any background 
on this. I took this to the people and economists and the tax lawyers 
that I knew.
  I yield to the gentleman from Georgia.
  Mr. BROUN of Georgia. I thank you for yielding.
  I want to just point out that you have been a leader on this Fair Tax 
and trying to offer solutions. Republicans have offered solution after 
solution after solution to energy, to housing, to taxes, to the 
spending; and the leadership has totally denied us from bringing this 
forward to the American public. And I congratulate you for being a 
leader in this regard.
  Mr. KING of Iowa. I thank the gentleman from Georgia and all the 
participants.

                          ____________________