[Congressional Record Volume 159, Number 51 (Tuesday, April 16, 2013)]
[House]
[Pages H2056-H2061]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          FAIR TAX ACT OF 2013

  The SPEAKER pro tempore (Mr. Stockman). Under the Speaker's announced 
policy of January 3, 2013, the gentleman from Georgia (Mr. Woodall) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. WOODALL. Yesterday was tax day, and I've got taxes on my mind, 
Mr. Speaker. You know, as most folks in this Chamber do, that H.R. 25, 
the Fair Tax Act of 2013, is the most widely cosponsored, most widely 
supported fundamental tax reform legislation in the House and in the 
Senate. In fact, both the House and the Senate. Sixty-four of our 
colleagues in the House, Mr. Speaker, have put their name on H.R. 25, 
the Fair Tax Act. Eight of our Senate colleagues have put their name on 
H.R. 25, the Fair Tax Act.
  The FairTax is a revolutionary proposal, Mr. Speaker, in that it 
takes all of the power of the Tax Code out of Washington, D.C., and 
returns it to men and women back home. You know that we can manipulate 
the behavior of absolutely anyone in America through the Tax Code. If I 
want folks to wear

[[Page H2057]]

more pink ties and fewer blue ties, I'll subsidize pink ties to the 
tune of 50 percent and I'll tax blue ties to the tune of 50 percent and 
we'll change behavior overnight.
  Do you remember, Mr. Speaker, when we had the Electric Vehicle Tax 
Credit back in 2010? It was a $7,500 tax credit. And we said we're 
going to give $7,500 to every American who goes out and buys an 
electric car. Now the plan was folks were going to go out and buy these 
$100,000 electric cars and we were going to defray a little of that 
price. But it turns out the lawyers got involved and figured out that 
golf carts were electric cars. And if only we put seatbelts and 
rearview mirrors and brake lights on these golf carts, every American 
could get a free golf cart.
  Mr. Speaker, I'm not going to ask if you got one of those free golf 
carts, and I'm not going to ask my colleagues who are back in their 
offices watching on TV to send me a note if they got a free golf cart. 
It was the law of the land. And if you got a free golf cart, I guess 
you deserved it.
  But so abused was that tax provision, Mr. Speaker, that at the end of 
2010 the IRS released tax guidance that said, We wanted you to have to 
take delivery of these golf carts before the end of 2010 to get the tax 
credit, but the demand has been so great, the manufacturers cannot fill 
it fast enough. Actually, you just need a VIN number and you can take 
delivery into 2011. Well, that's not the way the American Tax Code 
ought to be used, Mr. Speaker, and it's not the way American tax 
dollars ought to be used.
  There are so many challenges we have in the American economy and so 
many reasons that American-made products cost more than the products 
that our competitors produce overseas--and so many of those reasons we 
do not want to change. The fact that American wages are higher than 
Chinese wages, I want to celebrate that. I don't want to bemoan that. 
The fact that environmental regulations in America are stricter and 
protect us in ways environmental regulations in India do not, I don't 
want to bemoan that. I want to celebrate that. But the fact that the 
American Tax Code places the highest burden on businesses and employers 
in America than any other place in the world, that's a problem.
  We live in a very fluid economy, Mr. Speaker. Folks can locate their 
business anywhere on the planet they want to. They don't have to come 
to America. Why is it that America's not the magnet for capital around 
the globe? Why do we have the absolute worst Tax Code in terms of rates 
instead of the absolute best? And that's what I want to talk about. 
Because it's one of those areas of agreement, Mr. Speaker.
  This is a quote from President Barack Obama in his 2011 State of the 
Union address. He said:

       To put us on solid ground, we should also find a bipartisan 
     solution to strengthen Social Security for future 
     generations.

  I mention Social Security, Mr. Speaker, because the Fair Tax Act, 
that bill, H.R. 25, the most widely cosponsored bill in the U.S. House 
of Representatives for fundamental tax reform, replaces income taxes 
and the payroll taxes--payroll tax is that 15.3 percent that comes out 
of every Americans' paycheck in order to fund Social Security and 
Medicare. It replaces both of those with this 23 percent sales tax. It 
replaces all your income taxes, all your payroll taxes with a sales 
tax.
  And so for the first time, Mr. Speaker, we would begin to link the 
size of the Social Security trust fund not with wages in this country 
but with the size of the economy in this country. So when we double the 
size of the economy, we double the contributions to the Social Security 
trust fund, we protect Social Security for future generations.
  Mr. Speaker, in a poll, I think it's been 3 years ago now, they asked 
young people, college-aged students, Do you believe in UFOs? Folks said 
yes, folks said no. They said, Do you believe you're ever going to see 
a Social Security check? Folks said yes and folks said no. Do you know 
that more of those young people believed in UFOs than thought they'd 
ever see a Social Security check, Mr. Speaker? That's outrageous. 
Because Social Security, by the very nature of its name, is to provide 
security. And if you don't believe it's going to be there, it provides 
no security whatsoever.
  We can guarantee Social Security not just for the current generation 
but for future generations by reforming the way that we pay for it, by 
reforming our Tax Code, by moving to a pro-growth system like the 
FairTax.

                              {time}  1440

  The President knows we need to, and yet in his budget this year we 
did nothing to extend the life of the Social Security trust fund. In 
fact, the Social Security disability trust fund, Mr. Speaker, that 
trust fund that so many Americans depend on, that runs out of money 
before this President even leaves office. It runs out of money within 4 
years, Mr. Speaker, and yet the budget proposal this year provided 
absolutely no certainty that changes would be made in order to protect 
that for future generations. That's wrong, and it's an opportunity for 
us to come together and do things that we all agree on.
  Here's another quote, this time from President Obama's 2013 State of 
the Union Address:

       Broad-based economic growth requires a balanced approach to 
     deficit reduction, with spending cuts and revenue, and with 
     everyone doing their fair share.

  Who disagrees with that, Mr. Speaker? We talk so much about fair 
share here; I can't find anyone who disagrees with fair share.
  I think about Dr. Carson at the annual Prayer Breakfast. Did you see 
that, Mr. Speaker? Dr. Carson was speaking at the Prayer Breakfast 
right down the street this year, and he was telling a tale of 
billionaires and someone who might have made $10 billion but they were 
taxed to the tune of $1 billion. They chipped in $1 billion to help 
fund America and folks were complaining that they hadn't done enough. I 
have not chipped in $1 billion, Mr. Speaker, far from it.
  What does it mean to do your fair share? For me, it means having skin 
in the game. One of my great regrets, Mr. Speaker, is that during the 
Bush administration, for the first time in American history, we cut 
taxes and went to war at the same time. I think that's wrong, Mr. 
Speaker. I think about all the young people who had skin in that game.
  In my part of the world down in Georgia, Mr. Speaker, a lot of folks 
are in the military, a lot of sons and daughters in uniform. Those 
families have skin in the game of foreign policy. But if you don't have 
a son or daughter in uniform, if you don't have a husband or wife in 
uniform, where is your skin in that game when you're not paying for 
those decisions? And when we make decisions that we don't have to pay 
for, we make bad decisions.
  I agree with the President: folks need to pay their fair share. I 
think we all need to have some skin in the game. Folks who make more 
ought to pay more; folks who make less ought to pay less. But we are 
all members of the board of directors of the United States of America, 
Mr. Speaker. All 320 million of us sit on the board of directors of the 
United States of America, and, yes, you ought to have skin in the game 
when you're making decisions about how this organization runs. How do 
we create revenue? How do we reduce deficits? How do we make sure that 
folks are paying their fair share?
  Well, the good news is, Mr. Speaker, the President is aware of the 
FairTax. I'm not willing to call him a FairTax President yet--again, 
the Fair Tax Act, that's H.R. 25, Mr. Speaker. I don't think the 
President is quite on board. We're not going to wait on the President 
to get on board though. We're going to go ahead and drive forward here 
in the House.
  The chairman of the Ways and Means Committee here in the House, Mr. 
Speaker, that committee that has jurisdiction over all tax legislation, 
they are serious about fundamental tax reform in this Congress like I 
have never seen in my lifetime. I dare say that folks with a lot more 
gray hair than I have, Mr. Speaker, who've been here since 1986--the 
last time we did fundamental tax reform--looked at the kind of work 
that Chairman Dave Camp and his entire committee, majority and 
minority alike, have put into fundamental tax reform. And I have more 
hope that we are going to see fundamental tax reform--not just in this 
Congress, Mr. Speaker, but in this calendar year--than I have ever had 
before. The FairTax is going to be a part of that discussion.

[[Page H2058]]

  The White House, to its great credit, Mr. Speaker, the White House is 
just leaps and bounds ahead of other White Houses in terms of how it 
deals with the public. They have this online petition process, Mr. 
Speaker, where anybody can go out there, and if you have enough folks 
sign your petition, you can ask the White House to do whatever you want 
to do. Well, here in FairTax world--which is where I come from down in 
Georgia, Mr. Speaker, where folks believe in the FairTax, believe in 
its power to reenergize the economy, believe in its power to return 
freedom to families and individuals and take it away from the Federal 
Government--we started a petition to say, Mr. President, please meet 
with Neal Boortz. He's one of the leaders of the FairTax movement. He 
has a radio program and has spent a lot of time investing in the kinds 
of freedom and opportunity the FairTax would bring us. It said, I want 
you to meet with Neal Boortz to talk about the FairTax. I want you to 
give Neal Boortz 1 hour.
  Well, we got all the signatures that were required on that petition, 
and the White House's response was this:

       The FairTax would apply to virtually all expenditures on 
     goods and services, including tuition, medical care, and new 
     homes, all typical family purchases.

  Well, he's partly right. I highlighted tuition here, Mr. Speaker, 
because the FairTax doesn't tax tuition; it taxes all consumption. 
Tuition is more of an investment in your future, so it's not taxed. But 
the question isn't: Why does the FairTax tax everything? The question 
is: Why are some things exempted in the current Tax Code, Mr. Speaker? 
Why do Americans get free golf carts? Why is that? Is that a real 
national priority that we make that happen? Why is it we subsidize some 
loans and we don't subsidize other loans? Why is it folks are able to 
deduct some interest but not other interest? Why is it that we're 
willing to help people get some businesses started but not other 
businesses started? That doesn't speak to fair share to me, Mr. 
Speaker.
  Running for Congress, you get this voting card and you slide it in 
the little slot here on the House floor, Mr. Speaker, and you get to 
make some decisions. For me, it's on behalf of about 640,000 people 
back home in Georgia. But even more power than that voting card, Mr. 
Speaker, is the way people use their wallet. Those 640,000 people back 
in Georgia, Mr. Speaker, use their wallet every day to make millions of 
decisions: Am I going to buy this or that product? Am I going to 
support this service or that service? Am I going to be involved in this 
activity or that activity? We run this country, Mr. Speaker, not just 
through our votes in November, but through the power of our wallet 
every single day.
  In order to find the broadest tax base of all--because economists 
tell us, Mr. Speaker, if you have a lower tax rate and a broader tax 
base, you get more economic growth in your economy. The Joint Tax 
Committee did a symposium on that, Mr. Speaker, in the late 1990s--
because we didn't have a computer model at that time that would model a 
consumption tax system--and they asked eight macroeconomic modeling 
groups: What would happen if we switched from the income tax America 
has today and moved to a consumption tax? Well, these economic modeling 
groups from the left and from the right, Mr. Speaker, some in the 
center--you know, economists, for Pete's sake, they don't agree on 
much. In fact, the results of these modeling groups were all across the 
charts, across all of the metrics that they were working on, except for 
one.
  When the question was would the economy grow faster under a 
consumption tax than under the current income tax system, every single 
group said yes. Now, some of those said it would grow a little bit 
faster, some of those said it would grow a lot faster, but every single 
macroeconomic modeling group said the economy would grow faster, that 
Americans would generate more wealth, that employment would be more 
available if we moved to a consumption tax system.
  The question isn't, Mr. Speaker, why we tax some things. The question 
is, today, in the current system, why don't we tax everything, tax 
everything once, but only once, because when we don't, we pick winners 
and losers.
  Again, through the power of my voting card here in the House of 
Representatives, Mr. Speaker, I can manipulate the lives of every 
single American back home by taxing this good and subsidizing that 
good. That's wrong. That's wrong. Because as all members of the board 
of directors of the United States of America, Mr. Speaker, the entire 
United States of America, all of our citizens, we have the power to 
make those decisions with our wallet; we don't need the law to tell us.
  Now, what price, Mr. Speaker, today do we pay for that law? Thirteen 
hours is the time the average taxpayer spends paying their taxes.
  Mr. Speaker, #taxreform will bring folks to all the information that 
has been coming out of the House this week during tax week--hour after 
hour, 13 hours of productivity for the average tax filer. Now, of 
course, some people's taxes are simple and some people's taxes are 
complicated, Mr. Speaker, and we're sucking that time out of their day.
  What does it turn into in dollars, Mr. Speaker? $168 billion American 
taxpayers spend each year to comply with tax rules. $168 billion 
produces nothing. It doesn't help us with our trade deficit with China. 
It doesn't help us export more grain to Russia. $168 billion we ask 
American taxpayers to dig into their pocket and pay for the pleasure of 
paying their income taxes.
  More and more Americans every year, Mr. Speaker, find they cannot do 
their own taxes, that they have to go to a professional tax preparer. 
Doggone it, Mr. Speaker, I don't mind paying my taxes. In fact, I think 
America is a great country and I think I'm getting my money's worth, 
but to have to pay somebody to help me pay the taxes makes me angry. 
And it's wrong. It's wrong.
  I look at what's happened in those former Soviet Bloc countries, Mr. 
Speaker. Do you know those former Soviet Bloc countries have all moved 
to flat taxes? What they found is, when they had really high tax rates 
and they were very difficult to comply with, folks just didn't pay 
their taxes at all; but when they lowered that rate, made it flat and 
applied it across a very broad base, folks began to voluntarily remit 
their taxes. That's not rocket science.

                              {time}  1450

  Well, that's not rocket science. That's exactly what we've seen in 
example after example after example around the world; $168 billion, Mr. 
Speaker, Americans waste simply trying to pay their taxes each year.
  Now, why is tax reform so complicated? I have another quote from the 
President here, Mr. Speaker. This is from his weekly address back in 
December. He was talking about the fiscal cliff, to be fair, to put 
this into context. He said:

       We've got to do what it takes to protect the middle class.

  Now, there's great disagreement about who the middle class is, Mr. 
Speaker. When I go back home to townhall meetings, absolutely everyone 
I meet believes they're in the middle class. Whether they're at the low 
end of the income spectrum or at the high end of the income spectrum, 
that's who we are in America. We believe in that middle class dream, 
that upward mobility to move from that space on the bottom rung of the 
economic ladder up to that middle class rung.
  Folks worry about the middle class, as well we should. FairTax takes 
that into account. The big knock, Mr. Speaker, on consumption taxes, is 
that rich people have to spend less of their income buying things than 
lower income people do. Now, that's absolutely true. At my first job 
out of school, Mr. Speaker, I was making under $20,000 a year. I was 
trying to pay rent and pay back student loans and pay insurance on my 
automobile. It was tough to sort all those things out in a high-rent 
district, high cost of living. I had to spend every penny of that 
$20,000 just to make ends meet.
  Now, if I had been making $100,000 at that time, Mr. Speaker, I would 
have had a lot left over. So, yes, if you make more, as a percentage of 
that income, you consume less.
  Well, we take that into account with the FairTax, Mr. Speaker. This 
is what we say. The poverty level--the poverty level in America--is 
calculated on

[[Page H2059]]

what it takes for the average individual, the average family to pay for 
their basic necessities. We all have rent, we all have clothes, Mr. 
Speaker, we all have to eat, we all have health care expenses. What is 
it that is kind of that basic level of subsistence? We call that the 
poverty level.
  Now, what the FairTax does is through a tax rebate check--it's 
actually a prebate check because it goes out the beginning of the month 
instead of the end of the month--it indemnifies every American, every 
American family from the tax consequences of spending up to the poverty 
level. So that, in effect, if you're a miser, Mr. Speaker, you save 
every penny you have, and you're only spending up to the poverty level, 
you would pay no taxes. I don't care if you're Warren Buffett, I don't 
care if you're Bill Gates, I don't care if you're that young person 
just graduating from high school and getting your first job. No one 
taxed up to poverty level spending; everyone taxed on every penny of 
spending beyond that.
  Here's the thing. When you open up The Wall Street Journal, Mr. 
Speaker, and it bemoans consumption declining in America, it hurts me. 
Because when consumption is declining, that means savings are rising. 
We need more savings in this country, Mr. Speaker. Oversaving is not a 
problem in America. I wish that problem upon us all. And we have a 
unique--a unique--window in the world economy right now, Mr. Speaker.
  For years, it's been America that has been consuming everything that 
the world has been producing. We used to be the manufacturer for the 
world; now we're the consumer for the world. But as literally millions 
and millions and millions of new middle class consumers are coming 
online in China and in India, millions and millions and millions that 
are going to continue to grow, we have a window of opportunity right 
now to quit being the consumer for the world, as we have been for the 
past few decades, and return to our status as manufacturer for the 
world.
  We're having this natural gas boom right now, Mr. Speaker, that's 
driven the cost of manufacturing down in America, the likes of which we 
haven't seen in decades; that's made us competitive, even with our 
higher wages, even with our more aggressive environmental protection 
regulations, made us more price competitive with goods from all across 
the world. We can be the producer for the world, Mr. Speaker. We don't 
need to be the consumer.
  That's why the FairTax taxes consumption. We shouldn't tax people 
based on what they earn. If you're earning a lot and you're saving a 
lot, we should applaud you for that, not punish you for that. Mr. 
Speaker, when you're in the low-income class today and you're trying to 
move into the middle class, you begin to lose benefits--you lose your 
health care, you lose your education subsidy, you lose some food 
subsidies.
  The marginal tax rate, Mr. Speaker, when you're trying to get from 
the lower rung of the ladder to the next rung of the ladder, can be 
upwards of 60 percent--60 percent on folks who are trying to make it. 
The FairTax says, no, no, we shouldn't tax anyone up to poverty level 
spending, and we should applaud anyone who finds a penny to save, 
because savings is what drives an economy, not consumption.

  So here we have a chart, Mr. Speaker, of what happens to the FairTax 
rate for a two-adult, two-child household. And what you see is if 
you're down at a lower income bracket, Mr. Speaker, earning under 
$20,000 a year, you're not going to pay a penny in taxes, not a penny 
in taxes. In fact, you're actually going to get some money back through 
the FairTax rebate. If you get up to $30,000 a year, you're still not 
going to pay a penny in taxes; you're going to break even paying zero. 
If you're doing better, if you're making $45,000 or $60,000 or 
$121,000, you're going to see your rate continue to climb. Not the 
marginal rate, Mr. Speaker, but the effective rate. That's what's so 
lost in this body.
  So often when we have our tax debates, I can have a single flat rate 
for everyone, a single rate; but based on what the standard deduction 
is at the bottom of that rate, I make that rate progressive such that 
folks at the bottom end of the income spectrum are getting a check back 
so that folks in the middle aren't paying a penny at all and so the 
folks at the top are paying more and more and more, depending on how 
much they spend. Progressive tax with the FairTax, Mr. Speaker.
  You can't see this chart, Mr. Speaker, but it's the most dangerous 
chart that anyone is going to have on the House floor today. It shows 
two diverging lines. It's a chart that goes back to 1979, Mr. Speaker. 
The last time we had a President from the great State of Georgia was 
Jimmy Carter. We go back to 1979, and we chart who's paying the taxes 
in America, going back to the President's vision of having a FairTax 
system.
  This blue line, Mr. Speaker, is the bottom 80 percent of all 
Americans, bottom 80 percent. Most of us--80 percent. It's tough to 
call yourself the bottom when you're the majority. But 80 percent of 
income earners, just distinguishing that part of America from the top 
20 percent--80 percent of income earners.
  What percentage of the American tax burden, income tax burden, is 
that 80 percent of America paying? And conversely, because we talk so 
much about the 1 percent, Mr. Speaker, what percentage of the American 
tax burden is the 1 percent paying?
  And I have something that's just staggering, Mr. Speaker. Folks 
wouldn't believe it if you didn't see the data. Back in 1979, when 
Jimmy Carter was leaving office, 80 percent of Americans paid 35 
percent of all the tax bills in this country, all the income tax bills; 
80 percent of Americans paid a total of 35 percent of the burden. Now, 
we can argue whether that's too much, too little; but 80 percent were 
paying 35 percent of the burden.
  Today, Mr. Speaker, go all the way out to 2009--it's the last year 
for which the IRS produced this record, that's why it's the last year 
that we have information for--come out to 2009, 80 percent of Americans 
are now paying 6 percent of the bills in this country. Eighty percent 
of Americans, 80 percent of the voters, are paying 6 percent of the 
bills. That's staggering. Most of us are in the 80 percent, Mr. 
Speaker, and we think that we are paying our fair share. In fact, so 
many of us think we probably ought to cut taxes a little bit more, and 
yet we're only paying 6 percent of the bills.
  I want to tell you that that's dangerous. It's dangerous because that 
free golf cart I talked about earlier, there is no way I'm paying 
$7,500 for a golf cart. I would rather walk. I don't need a golf cart, 
don't have any place to put a golf cart, don't know how much it costs 
to charge a golf cart, don't really have any place I can go on a golf 
cart. I'm not paying $7,500 for a golf cart. But if you give me the 
golf cart for free, I'm going to tell you where to deliver it. I'm 
going to phone it in today--free golf cart--and tell you right where to 
send it.

                              {time}  1500

  When we don't have skin in the game, we make different decisions. In 
fact, we make bad economic decisions. They may be good decisions for 
us, right? It's a good deal if you can get a free golf cart. I 
recommend it to everyone. But it's a bad deal for the American taxpayer 
who's giving away those free golf carts.
  When we, the 80 percent, Mr. Speaker, are only paying 6 percent of 
the burden, we begin to make bad voting decisions about what the cost 
of government is. And here's the other thing: it goes again to that 
innate sense of fairness that everyone in America believes in. We all 
believe in fairness. We may not believe in equal outcomes, but we 
believe in equal opportunity, that everyone should have a fair shot at 
success.
  That top 1 percent that we talk about so much about, Mr. Speaker, I'm 
not in it, but I aspire to be in it one day. I hope I'm successful. I 
don't see the pathway from here to there yet, but I'm going to keep 
working at it. In 1979, when Jimmy Carter was President, that 1 percent 
paid 18 percent of all the bills in the country. Today, Mr. Speaker, 1 
percent of the people pay 38 percent of the bills. The 1 percent are 
paying more than 80 percent combined. In fact, the 1 percent is paying 
more than 90 percent combined.
  When you live in a land of self-governance, the biggest experiment in 
self-governance the world has ever known, an experiment about which 
Alexis de Tocqueville said, when he wrote about

[[Page H2060]]

it in the mid 1800s, As soon as the American people can decide they can 
vote themselves benefits, that will signal the end of the Republic.
  They wonder how does America work, how can self-governance work. And 
de Tocqueville said, It's working today because everybody is pulling 
the wagon together, but as soon as they figure out that 51 percent of 
the Americans can tax the other 49 percent of the Americans, that's 
going to signal the end of self-governance.
  We all believe in the fair share, Mr. Speaker. Folks ought to do 
their fair share of the work; folks ought to get the fair share of the 
benefit. We all believe in fairness. It's something that every 
preschool in America is teaching children, every family in America is 
teaching their children. But in the past four decades in my lifetime, 
every single year we've shifted the burden so that most of us don't 
have to shoulder the burden as heavily as we did the year before, such 
that 80 percent of us in 1979 were carrying 35 percent of the weight, 
and now we're only carrying 6 percent.
  I don't know whose definition of fairness that falls into, Mr. 
Speaker. It threatens self-governance. I want a seat at the 
decisionmaking table. I want to be a part of the solutions for 
everything that happens in this country. I want to pay my fair share, 
and I want to do my fair share. And I think that is the feeling, the 
sense, the commitment of every single American today, Mr. Speaker, but 
we hide those results in a Tax Code that folks can't see: 80 percent of 
the people paying 6 percent of the bills.
  Now, I know what you're saying Mr. Speaker. You've looked at some of 
those income distribution tables too, and you're thinking, Well, golly, 
Rob, maybe that 1 percent is just earning that much of the income. No, 
that's not true. Again, this is the latest year, 2009, for which the 
IRS has produced records. The top 1 percent, as the share of the pretax 
income, all the income earned in America, the top 1 percent earned 13 
percent of the income and paid 38.7 percent of the taxes.
  Now, here's the question, Mr. Speaker: If the top 1 percent--again, 
I'm not there. I don't know if I'll ever get there. If I stay in public 
service, I will absolutely never get there. If the top 1 percent are 
paying 38 percent of the bills while earning 13 percent of the income, 
in what world are they doing less than their fair share?
  Here's the thing: I need to borrow money from time to time, Mr. 
Speaker. I borrowed money for my house. I borrowed money for my car. I 
need to borrow money. If folks aren't saving money, I can't borrow the 
money they put in the bank. I want folks earning money and saving money 
so that I can borrow money. Every single one of us who borrows money, 
we're not borrowing the bank's money; we're borrowing another citizen's 
money who put that money in the bank so the bank could lend it to us. 
We need those savings in this country, Mr. Speaker. I'm glad folks are 
successful. I'm glad they're creating businesses. I'm glad they're 
employing me and my neighbor's and my neighbor's children. I'm glad 
they're building my community back home.
  I don't demonize success. I celebrate success. You know, Bono from 
U2, Mr. Speaker--I don't know if you're a fan of U2 like I am. Those 
were some coming-of-age albums they were producing back in my youth. 
Bono said what he loved about America is that in America you put your 
arm around your son, you take him and you look up at the big house on 
the hill, and you say, Son, one day if you work hard, that could be 
you. Bono then said over in Ireland, they put their arm around their 
son, they look up at the big house on the hill, and they say, Son, one 
day we're going to get that guy.
  That's not who we are in America. We celebrate success, and we 
believe--in fact, we're certain of it--that if we work hard, we apply 
ourselves by the power of our ideas, the sweat of our brow, we can move 
our fate from yesterday to tomorrow. We can elevate ourselves pursuing 
whatever it is that we want to pursue from yesterday to tomorrow 
because we live in America. But something has gone on in this body, Mr. 
Speaker, not just in the House of Representatives, but across the 
street in the Senate and down the street at the White House, where 
folks have begun to demonize success.
  Home Depot came out of the great State of Georgia, Mr. Speaker. I 
love Home Depot. I encourage everybody to get themselves an orange 
apron, put that on and get some work projects done. They do great 
activities for the kids on Saturday morning. They get folks started 
with building activities at an early age, Mr. Speaker. That company was 
started in the great State of Georgia, and the four men who started 
Home Depot--and you all know Home Depot as well as I do--they said if 
they got together today to try to start Home Depot, they would fail.

  In America today, we are so demonizing success, we are so punishing 
success, we are making it so difficult for entrepreneurs to get 
started, that if the same four people with the same good idea got 
together today, they would fail. The only way this country works is if 
entrepreneurs succeed.
  The Department of Labor, Mr. Speaker, they keep statistics on these 
things. They say today in America, these years during the President's 
administration, we've had the lowest level of entrepreneurial activity 
since the Department of Labor began keeping records. It's not the 
lowest level of people succeeding, but the lowest level of people 
trying. The word is out, Mr. Speaker, that you cannot succeed in 
America any longer, and it's just not true. If it is true, we have the 
power to change it. We get to decide the rules of this country, Mr. 
Speaker. We sit on the board of directors of America, and we get to 
make these rules.
  Success, Mr. Speaker. Opportunity. America. Those are synonyms. They 
have been synonyms since 1776. They will be synonyms until the day that 
I die unless you and I trade those things away.
  The FairTax says we're not going to be in the business of punishing 
people any longer; we're going to be in the business of celebrating 
success. The more you save, the less you'll be taxed; the more you 
spend, the more you'll be taxed.
  Now, you all know, Mr. Speaker, about jealousy just as well as I do. 
I don't know if you had this same issue, Mr. Speaker. When I got ready 
to apply for college, I applied for all the Federal grants. I filled 
out that big FAFSA form trying to get some help from the Federal 
Government. I got nothing. They said, Sorry, your family has saved too 
much money.
  Now, we come from a single-income family, Mr. Speaker, but my buddy 
down the street, he came from a two-income family. His mom was an 
architect and his dad was a lawyer. They had money stacked up in the 
windows, Mr. Speaker. They had vacation homes. They went skiing in 
Vail. They had boats. They all drove--I say all. There were four of 
them in the family, and three of them drove Mercedes and one of them 
drove a BMW. They all were new. When he applied to get money from the 
Federal Government, the government said, You know what, we've looked at 
your savings account for the family and you don't have a penny in it. 
You need help. Here's some money for you.
  Something's wrong in our Tax Code, Mr. Speaker. It celebrates the 
consumption of goods, and it penalizes savings. We need to be in the 
opposite camp. The reason we have to go to China and to Germany to 
borrow money to fund America is because Americans can't fund it any 
more. Back in the 1970s, Mr. Speaker, we were still borrowing money, we 
still had a national debt, but Americans lent the Federal Government 
the money to fund the processes of the Federal Government.

                              {time}  1510

  Today, almost 50 percent of the money we spend and 50 percent of the 
money we borrow comes from foreign nations. We as a people can't even 
save enough money to fund the United States Government any longer, and 
our Tax Code encourages that conspicuous consumption at every level.
  Mr. Speaker, let me just show you some of the things that are in the 
Tax Code. Again, these are all complicated questions. You've got to 
make these decisions for yourself. If they were easy questions, Mr. 
Speaker, they wouldn't need you and me and these two new freshman 
classes to sort them out. The easy questions were sorted out long, long 
ago.

[[Page H2061]]

  Again, Mr. Speaker, you wouldn't believe this unless you dig deep 
into the numbers. We spend more in tax credits and tax loopholes and 
tax giveaways than we do on all other discretionary spending accounts 
combined.
  What do I mean by that?
  We have what we call ``mandatory spending'' here. That's Medicare, 
Medicaid, Social Security, and interest on the national debt. We call 
that ``mandatory spending.'' Everything else--roads, bridges, courts, 
parks, the environment--is what we call ``discretionary spending.'' 
Everybody knows what the tax rate is. Everybody knows they're paying 
into the tax system. We give away things in the tax system--promote 
this idea; promote that idea; give away this pot of money. We give away 
more through the Tax Code--we spend more through the Tax Code--than we 
spend on all other aspects of government combined, but the spending is 
hidden.
  I've put up a few of what we'll call ``income tax expenditures'' 
here. Let's see what that is.
  For example: exclusion of interest on public purpose State and local 
bonds. Right? That seems pretty innocuous, State and local bonds. We 
want to encourage State and local governments to take responsibility, 
so we're going to allow those bonds to pay interest tax-free. Well, 
okay, but it's not free. Somebody else is paying for it. Those folks 
who have those bonds aren't paying for it, but the rest of America has 
to pick up the tab.
  Here is one: individual retirement accounts. Right? If you put money 
in your IRA, we want you to save for your retirement. We don't tax you 
on that money, but it's not free. Somebody else is paying that tax. 
It's just not those folks who are saving their money in their IRAs.
  I'm not saying these things aren't good ideas. I'm saying we have to 
talk about where this money is coming from. I'm closer to death than I 
am to birth, Mr. Speaker. This $16.7 trillion that we've borrowed from 
America's kids, I'm going to be dead before we pay that back, but it is 
going to be an albatross around their economic neck for another 
generation or two or three, and we're making those choices today. We're 
spending money through the Tax Code instead of through the 
appropriations process.
  The FairTax says: no more. The FairTax says: a tax isn't about 
manipulating behavior. A tax is about collecting revenue to fund the 
necessities of a government.
  We can argue about what those necessities are. Should it include the 
President's health care bill? Should it not? Should it include wars in 
Iraq and Afghanistan? Should it not? Should it include environmental 
protections? Should it not? We can argue about all of those things, but 
that's what revenue is for. You collect the revenue to fund those 
priorities that we, the American people, believe in.
  But what we use our Tax Code for today is for the Congress of the 
United States, for the President of the United States and other folks 
with political power and influence to pick winners and losers through 
the Tax Code, so much so that we spend more money through the Tax Code 
than all other aspects of government combined--everything on the 
discretionary side.
  It wasn't this way when we got started. Back in 1913, the passage of 
the 16th Amendment allowed Americans to have an income tax for the very 
first time. Do you know what they said, Mr. Speaker? You've probably 
heard this before. They said, This is only going to be a very small tax 
on the very wealthiest of Americans.
  My calculations, using CPI, Mr. Speaker, tell me that it was a 1 
percent tax on folks who made over $9 million a year. On $9 million a 
year, a 1 percent tax--I'm pretty sure we could get 51 percent of the 
folks to vote for that--but over time, that income tax grew so that it 
touches every single American family. Thirteen hours, on average, an 
American family spends to comply with the Tax Code. And for what? It 
destroys opportunity. It hides spending. It protects from scrutiny 
those items that this U.S. House of Representatives has decided are 
worthy of taxpayer expense.
  We have a choice: don't lower wages in America. In fact, study after 
study says, if we pass the FairTax, we're going to see wages go up. 
It's going to increase economic activity and make us a magnet for 
capital from around the world. Why in the world are we borrowing money 
from China when we could just change our Tax Code, and money that 
American companies have already earned would flow back into this 
country in order to create jobs?

  The FairTax says: no more. Let's have one tax rate on everything that 
Americans buy and consume.
  I'll close with this, Mr. Speaker. Here is the catch. We are the only 
OECD country in the world--the Organisation for Economic Co-operation 
and Development--that does not have a consumption tax.
  Now, what does that mean?
  It means, when we build a Ford right here in the United States of 
America, that Ford has buried in the cost of that Ford that 15.3 
percent payroll tax that every employee and employer has to pay, the 
income tax that every employee and employer has to pay--all of the tax 
burdens of the United States of America. Again, the highest corporate 
tax rate in the world is buried in the price of that Ford. When it gets 
to Germany, they add their Value Added Tax on top of that, and they 
ask, Who wants to buy a Ford? But the BMW that's leaving Germany, where 
they have a consumption tax, doesn't have those taxes buried in it, Mr. 
Speaker. In fact, it's tax free because the tax goes on top of it at 
the sale. So, when they ship that BMW overseas, it comes over here 
completely tax free, and then we add on top of it our income taxes, our 
payroll taxes, our corporate taxes.
  That's an unlevel playing field, and the person it disadvantages is 
not the owner of Ford. The person it disadvantages is the employee at 
Ford, who needs that job. We used to have a Ford line and a GM line in 
the city of Atlanta, Mr. Speaker. They're both closed. They are both 
closed today because they couldn't make it work.
  We can bring those jobs back to America. More importantly, we can 
prevent jobs from leaving America, not because we're making them stay, 
not because we're going to tax them if they leave, but because we make 
America the magnet for job creation and economic activity across the 
planet. Today, we're the worst. Tomorrow, we can bring ourselves back 
to the middle.
  My question to the body today is: Why don't we commit ourselves to 
making America the very best place to do business on the planet?
  We can continue to borrow money from the Chinese if we want to. We 
can continue to add burden to all the young people in America if we 
want to--or we can take America back to our roots. There is no more 
productive worker on the planet than the American worker. If we free 
the American worker, if we free the American entrepreneur through a Tax 
Code that the American people can understand, we will bring a new era 
of prosperity to America, the likes we have not seen in my lifetime.
  With that, Mr. Speaker, I yield back the balance of my time.

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