[Congressional Record Volume 159, Number 8 (Wednesday, January 23, 2013)]
[Senate]
[Page S223]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CHAMBLISS (for himself, Mr. Burr, Mr. Inhofe, Mr. Coburn, 
        Mr. Cornyn, Mr. Moran, and Mr. Cruz):
  S. 122. A bill to promote freedom, fairness, and economic opportunity 
by repealing the income tax and other taxes, abolishing the Internal 
Revenue Service, and enacting a national sales tax to be administered 
primarily by the States; to the Committee on Finance.
  Mr. CHAMBLISS. Mr. President, I rise to speak today about our Tax 
Code as well as our economic future. There is a problem with our Tax 
Code, one that hits home with nearly all Americans; that is, its 
complexity. In the past few years I have met with hundreds of 
constituents who are worried about this issue. Individuals, small 
businesses, farms, and large corporations alike struggle with meeting 
their obligations to the IRS because of the complexity of our current 
Tax Code.
  Earlier this month the IRS Taxpayer Advocate revealed some startling 
figures in the Agency's annual report to Congress. It estimates that 
individuals and businesses spend 6.1 billion hours each year complying 
with the IRS tax filing requirements. The complexity of the Tax Code is 
so burdensome that 9 out of 10 taxpayers now pay a professional 
preparer or use often costly commercial software to assist in tax 
preparation.
  Then there is the problem with our corporate taxes. The United States 
has the highest marginal effective tax rate among the largest developed 
nations in the Organization for Economic Cooperation and Development. 
According to recent studies by the Cato Institute, that rate for U.S. 
corporations is almost 36 percent. In fact, only Argentina, Chad, and 
Uzbekistan have higher tax rates than does the United States. While the 
U.S. corporate rates have remained high, other countries are lowering 
their rates. Sweden, for example, has become the latest country to 
announce that it will lower corporate tax rates, in part to help 
attract more foreign investment. Our corporate tax rates continue to be 
higher than they should, and we lose our competitive advantage to other 
nations in part because of that high tax rate.
  I want to talk about a way to fix both these problems. Since joining 
the Senate, I have introduced in each new Congress the Fair Tax Act. 
Today I am reintroducing this legislation because of my belief that the 
Fair Tax Act can fix the problems built into our current Tax Code. The 
fair tax will promote freedom and economic opportunity by eliminating 
our current archaic and inefficient Tax Code and replacing it with a 
simpler, fairer means of collecting tax revenue. It will repeal the 
individual income tax, the corporate income tax, capital gains taxes, 
all payroll taxes, self-employment taxes, and the estate and gift tax 
in lieu of a 23-percent tax on the final sale of goods and services. 
Elimination of these inefficient taxing mechanisms will not only bring 
about equality within our tax system, it will also bring about 
simplicity. It will provide tax relief for business-to-business 
transactions. These transactions, including those for used goods that 
have already been taxed, are not subject to the sales tax, so there 
would be no double taxation.
  Some of my colleagues have asked how the fair tax would affect our 
revenue on our entitlement programs. Social Security and Medicare 
benefits would remain untouched under the Fair Tax Act. There would be 
no financial reductions to either of these vital programs. Instead, the 
source of the trust fund revenue for these two programs would be 
replaced simply by the sales tax revenue instead of by payroll tax 
revenue.
  Another question I get is how the fair tax would affect impoverished 
Americans. Under the Fair Tax Act, every American would receive a 
monthly rebate check equal to the spending up to the Federal poverty 
level, according to Department of Health and Human Services guidelines. 
This rebate would ensure that no American pays taxes on the purchase of 
necessities.
  We have made nearly 5,000 changes to the Tax Code since 2001--I have 
supported some of them, and I have not supported others--all in the 
name of improvement and economic benefit. I believe we can do better 
than simply lowering our taxes. I know we can make a bigger impact on 
our economic future by ridding ourselves of a tax structure that is 
holding us back.
  Ronald Reagan once said:

       I believe we really can, however, say that God did give 
     mankind virtually unlimited gifts to invent, produce and 
     create. And for that reason alone, it would be wrong for 
     governments to devise a tax structure or economic system that 
     suppresses and denies those gifts.

  With that statement, I could not agree more.

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