[Congressional Record Volume 157, Number 50 (Thursday, April 7, 2011)]
[Senate]
[Pages S2221-S2222]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TAX SIMPLIFICATION
Mr. BEGICH. Mr. President, I rise to speak about the Wyden-Coats-
Begich bipartisan Tax Fairness Simplification Act. It is that time of
the year again, tax time. Across our Nation, small businesses and
families are struggling to unravel the annual nightmare of paperwork
required to file their taxes. Across our Nation, small businesses and
families are struggling. My wife and I are small business owners so I
especially understand how burdensome and expensive the Tax Code and
filing process can be for folks at this time of year.
This process is costly and burdensome. The IRS estimates that
Americans spend 6.1 billion hours each year filling out tax forms and
roughly $163 billion each year on tax compliance. Small businesses are
the engine and the backbone of our still recovering economy. We should
allow them to spend more time doing what they do best--creating jobs
and growing the economy--not filling out burdensome paperwork. This is
why I have joined my colleagues from both sides of the aisle, Senators
Wyden and Coats, to introduce the bipartisan Tax Fairness and
Simplification Act.
Tax reform has been a long priority of mine. I am happy to be moving
forward on this important piece of legislation today. In a nutshell,
our legislation simplifies the Tax Code and alleviates many of the
burdensome paperwork and costly requirements that are bogging down
American families and businesses. Our legislation will allow most
taxpayers to file their taxes using a straightforward and shortened 1-
page 1040 IRS form. This is an example of exactly what it would look
like. Also individuals and families will be able to request that the
IRS prepare a tax return for them to review, modify, and sign.
The Wyden-Coats-Begich bill reduces the number of tax brackets for
individuals from six to three: 15 percent, 25 percent, and 35 percent.
It eliminates the alternative minimum tax which forces millions of
taxpayers to calculate their taxes twice and pay the higher amount. In
order to make capital investments more cost effective for small
business owners, the Wyden-Coats-Begich bill will allow 95 percent of
small businesses--those with gross receipts of up to a million
dollars--to expense all equipment and inventory costs in a single year.
These changes may seem simple and commonsense, but they make a world of
difference to our middle-class families and small businesses.
Let's talk specifically about small businesses for a second, people
who are keeping our economy going, such as my friend John Brower from
Anchorage. John owns and operates Alaska Laser Printing in Anchorage.
John works tirelessly, 365 days a year, and is proud of the business he
built. When new technology is developing in the printing business, it
is always bringing on needs for new equipment. This legislation would
allow him to expense all those equipment costs and would truly make a
world of difference for John and save him thousands and thousands of
dollars in taxes.
I am here to speak for the John Browers and the other small
businesses all across Alaska and the country. My view is very simple:
Let's quit giving tax breaks to multimillion-dollar corporations. Let's
close the corporate loopholes and help small businesses such as John
Brower's.
Right now we are facing a $14.3 trillion deficit. We are hours away
from a potential government shutdown rather than continuing on a path
toward long-term economic recovery.
Our new bill actually promotes economic growth because it allows
businesses to spend more time growing and less time worrying about the
overly burdensome tax system which we all know only enables tax
avoidance. As all of us around here know, tax avoidance means
outsourcing jobs overseas. Instead, our legislation incentivizes and
enables companies to invest in America rather than incentivizing them
to invest overseas.
The legislation also promotes responsible retirement savings and
investments by expanding tax-free savings opportunities.
The American Dream Account, whether it is for a new home, education
for your children, or health care, provides a unique opportunity to
invest in the American dream. Families and individuals alike can make
contributions to an account that functions much like
[[Page S2222]]
a retirement savings account, an RSA, to work toward purchasing their
American dream.
Right now the U.S. corporate income tax rate is the second highest in
the world. That puts American corporations at a competitive
disadvantage globally. To resolve that, the Wyden-Coats-Begich
legislation cuts the top corporate rate from 35 percent to 24 percent.
That means American corporations will pay a more competitive rate than
corporations based in trading partner countries such as Canada,
Germany, and France.
To make the Tax Code fairer and reduce opportunities for individuals
and businesses to avoid paying their fair share of taxes, the Wyden-
Coats-Begich bill ends a number of specialized tax breaks that favor
one business sector or some special interest that has been fortunate to
be here lobbying in years past and getting their special deals, making
sure everyone is treated fairly but ensuring we are competitive in the
global economy in which we now compete.
Our legislation protects and extends important tax deductions for
families. The Wyden-Coats-Begich bill retains many of the most commonly
claimed individual tax credits and deductions, including deductions for
mortgage interest and charitable contributions, credits for children
and earned income. Preferences for the Armed Forces, veterans, and the
elderly and the disabled will be retained, as will those that help
Americans pay for health care and higher education and save for
retirement.
The Wyden-Coats-Begich bill also permanently extends the enhancements
of the Child tax credit, the earned-income tax credit, and the
dependent care credit. The legislation eliminates the current law
phaseout of itemized deductions and personal exemptions, allowing all
taxpayers to benefit fully from their deductions and exemptions.
Finally, our legislation requires banks to identify all individuals
who benefit from foreign accounts by name and nationality and to
withhold 30 percent of all passive income, such as interest on capital
gains, sent to any individual who disguises his or her identity.
Tax reform is a bipartisan issue, hands down. Republicans, Democrats,
our President, the OMB Director, and many others all across this
country have called for it. So let's do it. Let's stop punching holes
in an outdated system and make real tax reform happen. Tax reform is
about creating jobs, growing the economy, and supporting our families
and businesses for the future.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The assistant majority leader is recognized.
Mr. DURBIN. Mr. President, I commend my colleague from Alaska. I do
not know the particulars of his bill, but as I listened to his
description of it, it is long overdue. Simplifying this Tax Code so the
average American believes it is fair and understandable is essential
for the integrity of our tax system.
I have always said there is one law we can pass which would result in
tax simplification overnight, and that would be a requirement that
every Member of the Senate and House prepare and file their personal
income tax returns. It is a humbling experience. A few years ago, in
Springfield, IL, when my accountant passed away, I decided, as a lawyer
and a Senator: I will do it myself. I spent the whole Sunday afternoon,
and then Monday went begging for help. I thought to myself: Mine is not
that complicated. It should be a system that is much simpler and more
direct and fair.
I thank the Senator for stepping in to meet that challenge. The
Bowles-Simpson Commission talked about tax reform as one of the central
elements to dealing with our deficit and expanding our economy. I think
I might add to that: fairness in the way our taxes are treated. So I
thank the Senator for his leadership on that issue.
Mr. BEGICH. I thank the Senator.
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