[Congressional Record (Bound Edition), Volume 145 (1999), Part 11]
[Senate]
[Pages 15193-15195]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          UNFAIR COMMUTER TAX

  Mr. TORRICELLI. Mr. President, I have this evening withdrawn 
consideration of an amendment that I offered with Senator Lieberman, 
Senator Dodd, and Senator Lautenberg. But I do so in the hope that in 
the intervening weeks the Finance Committee will consider this measure 
with the near certainty that my colleagues from

[[Page 15194]]

Connecticut and I will return with Senator Lautenberg and offer this in 
the coming weeks. I rise tonight very simply and very briefly to make 
our case.
  There is nothing more fundamental in this Federal union than the 
equal protection of all of our citizens. It is the very purpose of the 
union. A citizen can travel State-by-State, live anywhere in this 
Nation, and be subject to the same application of the law.
  This principle, while 200 years old, is now tested again. Some weeks 
ago, the State of New York repealed the commuter tax for commuters into 
the city of New York. That tax had been in place for more than 30 
years. But they did a peculiar thing that is offensive to our concept 
of national union. They repealed the tax for people who live in New 
York State and commute to New York City, but they retained the tax for 
the citizens of Connecticut, 80,000 strong, and 250,000 commuters in 
the State of New Jersey. Those people who I represent alone were 
contributing $110 million to the city of New York.
  It is not as if the legislature of the State of New York in doing 
this did not recognize they were trampling upon sacred constitutional 
grounds, because indeed in their State legislation they put a provision 
that if this was found unconstitutional for anybody, the law would be 
revoked. It was a political statement. It was not a sincere effort to 
legislate.
  Indeed, as could be predicted, last week a judge did, indeed, rule 
that it was not only unfair to repeal this tax for New York commuters 
while imposing it on Connecticut and New Jersey, but it was 
unconstitutional and a violation of the privileges in the immunity 
clause of the U.S. Constitution.
  I quote the judge who called this residency tax ``arbitrary and 
irrational.'' The judge further recognized that ``the only substantial 
difference between the two classes of commuters is in the State in 
which they reside.''
  It might be argued that the State of New York, having recognized this 
might be unconstitutional, a judge now having ruled it is 
unconstitutional, that we might let the matter rest. I do not believe 
that would be in the best interests of the Congress. Indeed, last week, 
the House of Representatives on a voice vote, without apparent 
objection, unanimously found this is bad policy and it should never 
happen again.
  The legislation, the Computer Tax Fairness Act, that I have 
introduced with Senators Dodd, Lieberman, and Lautenberg, would have 
this Senate reach the same conclusion. I rise tonight not to offer an 
amendment but in the hopes of asking the Finance Committee in the next 
few weeks to review, as the Ways and Means in the House of 
Representatives has done, to review this legislation, and to reach its 
own judgment, so in future weeks we can come back to the floor of the 
Senate and ask the Senate to make an informed judgment.
  I believe it is important. Today it may be the people of Connecticut 
and New Jersey. This is a principle we will visit again. People who 
live in Indiana may one day commute to Chicago and find the city of 
Chicago thinks it is a good idea to tax somebody else for their 
services. I daresay the people of Alabama may one day find they are 
commuting to Mississippi and finding they are paying a tax subjected 
only on their own citizens. This is anathema to our national union. It 
is taxation without representation. It is a violation of privilege of 
immunities. It is a problem of equal protection. Indeed, it violates 
our sense of union.
  While I do not insist on the amendment tonight, we will return to 
this moment in the hope that as the courts have found and as the House 
of Representatives has found, we can once again establish this 
principle.
  Mr. DODD. Will the Senator yield?
  Mr. TORRICELLI. I am happy to yield to the Senator.
  Mr. DODD. I commend my colleague from New Jersey for taking a 
leadership role on this.
  We should point out to our neighbors in New York how much we 
appreciate and support our great neighbor. The city of New York is a 
source of great economic vitality for our region. Our citizens are 
proud to live in our respective States of New Jersey and Connecticut, 
happy to work in the State of New York, but we want to be treated 
equally.
  My colleague from New Jersey has rightfully raised this issue and 
pointed out that almost 100,000 constituents of mine who commute every 
day to the city of New York, and the almost 300,000 from the State of 
New Jersey, have raised a very important issue. We are confident our 
colleagues from New York are going to be tremendously sympathetic to 
this injustice that could be heaped on their neighboring States of New 
Jersey and Connecticut.
  I thank my colleague from New Jersey for raising this issue.
  Mr. LAUTENBERG. Mr. President, New York state legislature exempted 
New York state residents from paying the New York City commuter tax. 
But out-of-state residents--including people who live in New Jersey--
are not exempt. They're supposed to keep paying the tax.
  Commuting between states is an inescapable reality of modern life. As 
our population grows, the physical boundaries that used to divide one 
city from another are breaking down.
  More and more everyday, our country is becoming a collection of 
regions. And that's especially true on the east coast, where urban 
populations are already closer together than they are anywhere else.
  Should we punish people for this? Is it fair to single people out for 
harsher tax treatment just because they live in one state and work in 
another? Of course not. It's economic discrimination. And even worse, 
it's unconstitutional.
  It's especially unfair in the case of New Jersey residents who work 
in New York City. Those people work hard. And their work brings real, 
tangible benefits to New York--benefits that translate into a stronger 
economy for New York City and the rest of the state.
  New York needs those commuters. But that fact seems to escape the 
state's lawmakers. Their message to New Jersey residents is this--
``You're second-class citizens. You don't live on our side of the state 
line, so you don't count.''
  In 1996 alone, nearly 240,000 New Jersey residents paid $75 million 
in commuter taxes to New York. I'm sure they didn't like paying it, but 
at least in 1996 the tax was applied with a sense of fair play. Not 
anymore. Those commuters are plenty mad. And who can blame them?
  Commuting to work is a necessity for millions of people. Often, it's 
an economic necessity. Or a desire to be close to family members.
  When you tax people just for driving across state lines to work, 
you're essentially telling them they shouldn't have a choice about 
where they live.
  That is wrong, Mr. President. I ask my colleagues to support this 
amendment.
  The PRESIDING OFFICER (Mr. Thomas). The Senator from New York is 
recognized for 5 minutes.
  Mr. SCHUMER. I very much appreciate the encomia that the Senator from 
Connecticut has given to our State of New York.
  I want to thank my colleague from New Jersey for not forcing this 
dubious amendment tonight. First of all, there are two reasons to 
reject this amendment. One is that it is moot. Six days ago, as the 
Senator from New Jersey indicated, a court knocked out the entire 
commuter tax. To spend time debating this amendment right now, at this 
late hour, when people are eager to leave, and when the good work of 
the Senator from Texas and the Senator from Illinois has to be 
completed, does not make much sense.
  Second, I caution that for the Senate to do this amendment without 
any hearings, without it going to the Finance Committee, might 
jeopardize all sorts of other complex decisions. Many States have pacts 
and agreements and covenants with neighboring States. How much this 
amendment affects those pacts and agreements, I don't know--but neither 
does anybody else in this Chamber.
  To move this legislation which might have an effect on so many 
things, I am

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told, without nary a hearing or a discussion, would be a serious 
mistake. In fact, the Federation of Tax Administrators, on June 21, 
wrote about the companion bill in the House. They said:

       Just what this bill is trying to do that has not already 
     been done is the question. Unfortunately, when Congress 
     attempts to restate existing constitutional law, the courts 
     are left to cast about for a meaning for the new law. The 
     resulting interpretations lead to countless examples of 
     ``unintended consequences.'' Because of the bill's widespread 
     impact, its confusing language, and the fact that the 
     protections Congress hopes to bestow upon the taxpayers of 
     New Jersey are already firmly established in the U.S. 
     Constitution, the Federation [that is the Federation of Tax 
     Administrators] would urge you at a minimum to withhold 
     consideration of the House companion bill.

  So I appreciate the fact we have done that in the House. We will 
debate this another day, this already moot point, and to not take any 
further time from my colleagues who are eager to debate other issues.
  I yield back the remainder of my time and wish my colleagues a happy 
Fourth of July.
  The PRESIDING OFFICER. The Senator from Montana.

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