[Congressional Record Volume 159, Number 53 (Thursday, April 18, 2013)]
[House]
[Pages H2149-H2152]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
REAL TAX REFORM
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 3, 2013, the gentleman from Oklahoma (Mr. Lankford) is
recognized for 60 minutes as the designee of the majority leader.
Mr. LANKFORD. Mr. Speaker, this is a conversation about something
that's very pertinent to all Americans right now, and that is their
taxes. Obviously, this is tax week, which was punctuated by an
incredibly difficult day in Boston.
But this is also tax freedom day that's happening April 18. It's a
recognition that if Americans worked their entire year they could get
to this point. For many areas of the country, this would be the day
they're finally paying into their own family, rather than paying into
the Federal Government or the State and local Treasury.
Now, that differs from area to area, but this shows, again, the
significance of what it really means to get to a point like this where
we have to look again at our Tax Code.
Today is the day just to be able to pause and say: Where are we with
our Tax Code, and where are we with our budget?
Let me just highlight a couple of things. Then I have several
colleagues that I want to get a chance to yield the floor to to get a
chance to continue this conversation.
There's a lot of conversation about our budget, rightfully so. We're
over $1 trillion overspending this year, the same as we did the year
before, the year before, and the year before. Now, for the fifth year
in a row something has happened that's never happened ever in American
history. We've overspent the budget by $1 trillion.
Let me set aside something else, though, for people to be able to
look at, and that is, this year, in the Federal Treasury, we will
receive the highest amount of tax revenue ever in the history of the
United States Treasury. Make sure no one misses that. We'll receive
more revenue this year than we ever have in the history of the United
States Government. Yet, we're still overspending $1 trillion.
We have serious budget issues, but they're not tax revenue as far as
how much is coming in issues; it's overspending. But our issue with
taxes is not the issue of the tax rate not necessarily having enough.
It's the issue of how we do it.
It's such a convoluted mess to be able to go through our thousands
and thousands of pages of Tax Code. We need to stop and be able to
evaluate this: Is this really the right way to do it?
The purpose of tax action is to tax the smallest amount possible to
run an efficient government. Is that really what we're doing in our Tax
Code right now?
Is it a simple system that people can actually do? If so, why do
people spend billions of dollars across America, and millions of hours,
trying to fill out tax forms, and to be able to get it in on time in a
way that's so complicated that when you turn it in, no one thinks that
they actually turned it in correctly. No one.
So the challenge of this is, how can we get to real tax reform to be
able to solve many of the tax issues, to be able to benefit our Nation
and what happens in the days ahead, and especially for our businesses
that need so much help and would like to have the relief of the burden
that they have to go through all this convoluted tax policy.
Let me introduce one of my dear friends. This is Tom Reed from New
York. He's a member of the Ways and Means Committee. They live and
breathe and function with the Tax Code, and he is one of the leaders of
trying to walk through the process of reforming this code.
Mr. REED. Mr. Speaker, I thank my colleague from Oklahoma for
organizing this important topic and this conversation tonight.
Mr. Speaker, I believe in an America that is fair. I believe in an
America where the rules are simple, so that hardworking taxpayers in
America understand what those rules are, and they're not subject to the
jeopardy of violating the rules because they're too complicated.
{time} 1350
I believe in an America where it's not judging a person by whom they
know but, rather, who they are. And, Mr. Speaker, why I start my
conversation with those beliefs is because we need to apply those
beliefs to getting rid of this broken, complicated Tax Code that we
have in America. What we have is a Code that is not simple, that is not
fair, that is way too complicated. That's why I believe in going
through commonsense tax reform for the purposes of coming up with a
simple, fair, and reasonable Tax Code so that people can fill out their
own taxes.
As my colleague from Oklahoma rightfully points out, people are
spending billions of dollars on tax preparers, third parties, and
millions of hours--that can otherwise go to their businesses or to
their families--to fill out a tax return that they can't understand
because the rules are too complicated.
Also, we have to end what we came here to Washington, D.C., to do, my
colleague from Oklahoma and myself of this freshman class in November,
2010, and that is having our country under the control of the special
interests and creating those loopholes in the Tax Code that go to
narrowly tailored people because of whom they know.
We want a Tax Code, I want a Tax Code, and I know my colleagues on
the Ways and Means Committee want a Tax Code that promotes growth, that
promotes economic opportunity, that promotes the opportunity for us to
be competitive on the world stage. Because when America competes on a
world stage in a competitive market, we win. We have the best workers.
We have the best technology. We have freedom. We have the rule of law.
We need to do commonsense tax reform for the purposes of putting us in
a position where we can create the jobs today and for generations to
come, because we will then create a fair, level playing
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field that allows us to start building things in America, allows us to
put people to work for generations to come.
So I appreciate my good friend from Oklahoma bringing this issue to
the forefront and having this conversation tonight, and I know he's
bringing forth a copy of the Code and the regulations. And all you have
to do is look at that colossal piece of paper, or reams of papers,
books of papers, 70,000 pages of statutory tax and regulation. We in
America can do better. We as House Republicans demand us to do better.
And we will do better under the leadership that House Republicans are
doing in the Ways and Means Committee and as a Conference to make sure
that we end up with a Code that is simple, fair, and no longer riddled
with loopholes, big government handouts, big government subsidies.
That's the principle of tax reform for the Republican side of the
aisle.
Mr. LANKFORD. Thank you for those words of encouragement, because
that is what we're all about.
As simple as this is, everyone would look at this Tax Code, the few
notes that I brought with me to be able to reference where we really
are on tax policy now, and see how large this has really become.
When we look at our tax policy, we say, How did it become this? It
became this because we've added one new rule after another after
another as it's gone through. Just since 2001, there have been 3,250
changes to the Tax Code. That's more than one per day. And they
continue to rack up. And every business and every American has to try
to rush to keep up with all this Tax Code, which leads to the problem
of, How do I know that I actually filled it out correctly and completed
all this? For many people, there is that sense that I didn't get a
chance to write anything off as deductions but there are other people
that know how to get out of this.
In this constant fight to say how do we fix this, first, we have to
get to some basic definitions. One is, What does it mean to reform the
Tax Code? Reforming the Tax Code seems to be a simple thing. That means
we're going to fix it to make it simpler; we're going to make it more
fair; we're going to make it more straightforward.
There are some that try to define reforming the Tax Code as a new way
to be able to raise taxes on other people, to be able to take away this
deduction or that loophole and find ways to keep this same convoluted,
crony system of Tax Code, but we're going to find some way through it
to be able to raise taxes on different groups of people. And so we
accomplish more revenue by raising taxes rather than by fixing the
system.
Again, I go back to we have the highest amount of revenue ever in the
history of the Nation. This is not a tax revenue problem of how much is
coming in. We have a serious spending problem. But we do have a Tax
Code problem, as well, that forces businesses to overspend for tax
preparation when they should be taking care of customers and clients
and their employees.
We can do better than all of this. We can do better, and we should.
Again, there's this sense that within the Tax Code that, if we just
create a couple more things, that we can fix the Tax Code, or maybe if
we just raise rates on people, that will get in more revenue.
Let me tell you a quick story. My daughters at their school several
years ago had a project between the fifth graders and the first
graders. As they studied through American history, the fifth graders
and the first graders both got to the American Revolution at the same
time; obviously, at different levels of interest and different depth on
the topic. But as they studied through the American Revolution, the
fifth graders, at some point, would take the role of the British and
the first graders would be the patriots, the Americans, the
revolutionaries.
Actually, the week before, I got a note, as a parent, saying, You
need to send 100 pennies with your first graders for next week's class.
And all it was was just a note saying every first grader needs 100
pennies to come. And so I sent my first grader off to school that next
week with 100 pennies in her little sack. She didn't know why.
They began studying the American Revolution, and midway through the
day, the fifth grade class barges into class and says, There is now a
tax on sharpening your pencil, and they would impose a one penny tax on
sharpening your pencil. If you go to lunch, you also have to pay
another penny to leave the classroom if you go to lunch. There's a one
penny tax to get a piece of Kleenex as well. They just declared it, and
they would come in. Several times throughout the course of the day,
they would just pop in and start collecting their tax from people.
Well, on Tuesday, they came in and they doubled their tax. It's now 2
cents to sharpen your pencil, it's 2 cents to get a Kleenex, and its 2
cents to head to lunch. And so on Wednesday, it comes again and they
add new things again to it.
So by Wednesday night, do you know what my first grader did? My first
grader, Wednesday night, came home and said, Dad, I need to take 10
sharpened pencils with me tomorrow to school. I said, Why do you need
10 sharpened pencils? She said, Because the tax is so high on
sharpening pencils, I'm going to take sharpened pencils with me to
school so I won't have to pay the tax to sharpen my pencil at school. I
laughed and I said, My first grader knows how to avoid taxes. My first
grader knows how to do this.
Some perception that, if we just raise rates on people, a lot more
tax money is going to come in is foolish, based on a basic value of,
when we know it's unfair, we'll find a way to get out from under it. If
we had a simple, fair, clean, straightforward tax system, we would not
fight with this, and we would actually receive in the revenue that we
should receive in as a Nation.
A nation does not need tax revenue. We need to be efficient, we need
to be fair, and we need to be straightforward. We can do this, and we
should do this.
I'd like to take just a brief moment to be able to recognize another
one of my colleagues from North Carolina. This colleague has a
different topic than tax reform, but it's really important this week
because a mutual person that we have great respect for that he knows
personally, as well, is due of honor in this week of all weeks.
So with that, I'd like to recognize my colleague from North Carolina
(Mr. McHenry).
honoring george beverly shea
Mr. McHENRY. I thank my colleague. I appreciate his leadership both
with the policy committee and on this very important issue.
Mr. Speaker, I rise today to honor America's most beloved gospel
singer. According to the Guinness Book of World Records, he holds the
world record for singing in person to more people than anyone in human
history, to a cumulative total of a live audience of 220 million
people.
Mr. Speaker, I am rising to recognize George Beverly Shea, who passed
away 2 days ago at the age of 104. ``Bev,'' as he was affectionately
known, began singing with Reverend Billy Graham in 1943. In the
following years, he would travel to every State in the Union and to
nearly every continent on the globe to spread the gospel.
He was inducted to the Religious Broadcasters Hall of Fame in
February of 1996, and was also inducted into the inaugural class of the
Conference of Southern Baptist Evangelists ``Hall of Faith'' in 2008.
{time} 1400
From a recent visit with him, I can tell you that such awards weren't
the most important things to him in life. As I visited Bev, it was a
beautiful day in the summer in the town of Montreat in western North
Carolina. He lived right down the hill from Dr. Graham. He wanted to be
close to his friend, and that's where he chose to live.
But as I noticed his pictures of his grandchildren, behind those
pictures of his family I noticed a Grammy Award. It was a Lifetime
Achievement Grammy Award given to him in 2010. That was behind his
family pictures. Very interesting, beautiful statement from a wonderful
person. It was in the Wilshire Theatre back in 2010 when he was given
that Lifetime Achievement Award, and he was with the likes of Dolly
Parton and even the Ramones. So it showed that he thought family was
most important.
Despite his worldwide fame though, friends and residents of his town
of Montreat knew him as a person who was deeply faithful to his Lord
and Savior and showed many good deeds
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and great kindnesses throughout the community. He even had a tradition.
Though he was known around the globe, he still took the time every year
to sing ``Happy Birthday'' to the mayor of his small town of Montreat.
What a special gentleman. What a special American. What a special
Christian and man of faith.
While friends and fans from around the world and Christians from
around the world know him from his renditions of ``How Great Thou Art''
and the ``Wonder of It All,'' he will always be remembered by friends
and family in Montreat--and beyond--as one of the most humble and
gracious men that has ever been known.
Bev Shea was 104, and leaves behind a wonderful blessing of a family.
So with that, I thank my colleague for yielding and giving me the
opportunity to recognize such a significant individual.
Mr. LANKFORD. I thank the gentleman. He is a man worthy of honor and
worthy of spending the moment to be able to stop and discuss.
Back on tax policy--which seems a mundane topic now compared to
George Beverly Shea and all that he has done for our Nation and the
world--did you know that under our current system if you own a guard
dog to protect your business or if you hold a business convention in
Bermuda or pay for your child's clarinet lessons so that it will help
with their overbite, you can deduct those expenses from our income tax?
There is something morally and culturally wrong with a government
that enables its citizens to deduct their gambling losses but punishes
the same person by taxing the interest that they have on savings in the
bank. Why would we as a Nation deduct gambling losses and tax interest
savings from the bank? Shouldn't we encourage saving and maybe
discourage, or at least be neutral, for gambling losses? That's the
nature of this code.
There's a section even in this code that specifically outlines that
if you're a drug trafficker or drug dealer, you can't deduct your
expenses from drug trafficking. That's what our code has become. We've
got to find a way to be able to simplify the code and to make it a
fair, straightforward code that deals with the issues and takes away
the absurdity that's in our code.
Let me give you another example. We have a tax system dealing with
internal taxes. In our internal tax system, we actually tell people
that if you're a business that's an American-owned business and you do
business with other parts of the world, you will pay that tax rate to
that country, which is fair, but that when you bring your money back to
the United States, you'll also have to pay the difference in our tax
rate. We're the only country that does that.
So we literally tell our businesses, do business all over the world,
function all over the world, make money all over the world, but when
you make money over there, we'd encourage you to leave that money over
there and not bring it back home. Because if they bring it back home,
they're actually punished for returning money back to the United
States.
Now, what does that mean to American competition and how we actually
function in our business world? What that means is if you're a German
company doing business in the U.K., let's say, you pay your taxes in
the U.K. and then you return your money back to headquarters. But if
you're an American business doing business in the U.K., you pay the
business tax in the U.K., and then you don't return your money back to
America, you just reinvest in your U.K. branch. Because why would you
lose all that money coming back to the United States with it? This
simple fix would bring back $1 trillion in private American capital
from around the world back into the United States.
Now, in 2009, this Congress passed an almost trillion-dollar stimulus
bill where they took money from each other as Americans and tried to
redistribute it to say it would fix the economy. Actually, what it did
was it skyrocketed our debt, and we will be paying for it for
generations. And it did not resolve our fiscal situation.
What would it mean, instead of just taking money from Americans and
redistributing it around and pretending we did something, what would it
mean instead to allow private capital to move from all over the world
from American-owned businesses to be able to come back home? It would
be significant to us. It's one of those commonsense things that when I
talk to people, they all nod their head and say, why don't we do that?
I say, because of this, because it's so difficult to get through our
Tax Code and to fix the things that are obvious.
I've even had some people say to me, well, if those American
companies bring their stuff back home, they'll just buy stocks or
reinvest in their building, they'll just spend it however they want to.
We should tell them how to spend it. I just smile and say, it's their
money; let them spend it how they choose to spend it but allow them to
be able to bring it home. In fact, we should encourage American-based
companies to bring American money back home when they make it rather
than reinvesting all over the world. It's a commonsense thing.
It's a commonsense thing to say when you do business: no matter what
type of business that you're in, don't discriminate. If they have
normal business expenses, allow those normal business expenses to be
written off and tax on the profit. It's a commonsense thing. But
instead, our code makes it so convoluted. One business gets taxed
different than another business and another business. No one can define
what just basic simple business expensing is because the code is all so
cluttered.
Then you see in some proposals--like the President's proposal when he
put out his budget, when he said that normal business expensing should
be taken away from any company that does oil or gas or coal, and
instead we should give special preferences to those that do wind and
solar and hydro and other things. In fact, they had the audacity to
make the statement in the Treasury Green Book, they made the statement
that the President wants a neutral Tax Code on energy. I had to laugh.
I said, one group of companies that actually has just normal business
expensing--if they have a cost for a well, they're able to deduct it
like every other business does for their basic operation--gets punished
in this code, and other companies get triple benefits from it. That's
not neutral; that's preferences. That's back to crony capitalism.
Now, I've got to tell you, I'm all for all types of energy; I really
am. I'm all for it. In my great State of Oklahoma we have geothermal;
we have oil; we have gas; we use coal; we have wind. We've got all
kinds of energy, and we use it all extremely well. It's a great
solution for us. But the issue is not what do we do on what type of
energy, it's where do we put preferences.
The code doesn't need to become even more convoluted by saying, well,
the administration has certain preferences on energy, and so it's going
to make it more expensive for some types, and then we're going to give
special crony benefits to others. That's not the way that we need to
function.
We need a code that is straightforward and clean and intentional,
that we have a certain amount of money that needs to be raised to have
basic operation of the Federal Government, and not raise more than
that--and definitely not create a system that is even more complicated
than what we have, when we have all of this giant code. Instead, we
should make it more simple.
So what do we need to do? Let's set some basic guidelines. Can we
create a code that is fair and straightforward? Yes. So let's get
started on that. And let's start with the basics. Let's not take this
code and edit. Let's take a blank sheet of paper and say, how much does
the Federal Government have to raise to efficiently operate? What is
the best Tax Code to start that process and begin our reform not by
tweaking this, but by fixing it?
I know for certain if I went to any American and said, what is the
best way to do Tax Code, no one would point to this. No one would point
to our current Tax Code and say that's the best way to do it. We all
get that. So let's start from there and say let's start by fixing it.
{time} 1410
The second thing is let's make our Tax Code as neutral as we possibly
can. What can we do to make it simple, neutral, straightforward, so
that whether you're an American that makes $20,000 a year or whether
you're an American
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that makes $2 million a year, you feel like it's fair to you, there's
not some sense of somebody else gets more benefits than I do out of
this Code. It's a simple, straightforward Code.
So, we're going to make it neutral, we're going to make it simple,
and we're going to try to make it as efficient as we possibly can. And
I know the words ``efficient'' and ``Federal Government'' don't go
together very often, but when we start a Code, we should start it as
simple as we possibly can.
The last time there was a major reform of the Tax Code was in the
1980s, and it was to simplify the Code. Since that time, it has grown
more and more and more complex again. I have every belief that if we go
through the long process of simplifying our Code, which dramatically
needs reform, if we will simplify our Code again, in the days ahead,
future Congresses will make it more complicated again. That's the
nature of government. I understand that. I'm just saying it's past time
to do the simplification again.
We need to have significant reform, and not reform that's defined as:
How do we stick it to a certain group to make sure they pay more?
Reform that's actually reform, that fixes our broken system and walks
Americans through a process where they can pay taxes, as we all love to
do, but can at least pay taxes in a way that they believe is fair and
neutral and consistent from year to year.
With that, I yield back the balance of my time.
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