[Congressional Record (Bound Edition), Volume 145 (1999), Part 13]
[House]
[Page 19287]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 19287]]

                 REPUBLICAN TAX BILL IS TRULY TAX FRAUD

  The SPEAKER pro tempore (Mrs. Northup). Under a previous order of the 
House, the gentleman from California (Mr. Sherman) is recognized for 5 
minutes.
  Mr. SHERMAN. Madam Speaker, after 20 years as a CPA, 6 years as a tax 
judge, I know tax fraud when I see it. The tax bill passed by the 
Republican majority is truly tax fraud.
  It is a giant shift of our national income to the wealthiest one 
percent, cleverly disguised as a grand expedition to the furthest 
reaches of fiscal irresponsibility.
  Many speakers have come to this floor and explained how this country 
cannot now afford to lock itself into an $800-billion tax cut exploding 
in its second 10 years to a $3-trillion cut, that we should not take 
steps today which Alan Greenspan has cautioned us against, that we 
should not risk the greatest economic expansion of our lifetimes.
  But after all the conversation about this $800-billion to $3-trillion 
tax cut and what it means in its fiscal effect, there has been precious 
little discussion about what is actually in the bill.
  Well, I will tell my colleagues what is not in it. A repeal of the 
marriage penalty is not in this bill. They could not find a way to do 
it, limited as they were to $800 billion. In fact, there is far less 
marriage penalty relief in this bill than there was in the Democratic 
alternative that cost only $250 billion.
  What also is not in this bill is any real help for school 
construction. The Democratic alternative said we as a Federal 
Government would pay the interest on school bonds so that if school 
districts have more classrooms for smaller class sizes, the Federal 
Government would help.
  All this bill does is relax the arbitrage rules, inviting local 
school boards to invest their money in debentures and derivatives and 
other things that caused Orange County to go bankrupt. It does nothing 
more for schools than give the school boards a free ticket to Las Vegas 
with the bond money.
  So what is in this bill? How have they managed to allocate 45 percent 
of the benefits to the top one percent in our society?
  Well, for example, they have got the interest allocation rules, 
costing over $43 billion over 10 years that turn to major 
multinationals and say, if you close down your factories in the United 
States and invest abroad, we will cut your taxes.
  But there is more. There is the modification of treatment of 
worthless securities, certain financial institutions. There is a whole 
lot of stuff in here for the oil companies. My favorite and their 
favorite is the repeal for special foreign tax rules.
  This means that if Texaco gives a ton of money to Saudi Arabia or 
Kuwait in return for the oil that they remove from their desert sands, 
Uncle Sam reimburses them penny for penny for what they pay for the oil 
that they then charge you and me for.
  But there is more for the oil companies, like allowing a 5-year 
carry-back of NOL carry-forwards under a special rule; suspending the 
65-percent tax limit on the percentage depletion allowance; allowing 
geological and geophysical costs to be deducted currently; allowing 
delay rental payments to be deducted currently, while modifying the 
section 613(d)(4) rules so that integrated oil producers can get the 
same benefits as independent wild-catters.
  Then there is the stuff for the big chain store, such as the 
liberalization of the tax treatment of certain construction allowances 
and contributions received by retail operators.
  What does that mean? It means the big chains can get a big payment to 
put a big store as the anchor tenant in a big mall, and they do not 
have to pay taxes on that big payment. But of course, people have to 
pay taxes on salaries and small business has to pay taxes on their 
profit.
  There is the repeal of the 5-year limitations relating to life 
insurance companies filing consolidated tax returns with the affiliated 
group including non-life-insurance companies. There is a host of others 
that I have no time to get into.
  But then finally there is the phase-in repeal of the estate gift and 
generation skipping tax. What does that mean? That means that Bill 
Gates saves $50 billion. But what is in it for working families? For 
the 50 million Americans, 8 cents a day.

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