[Congressional Record (Bound Edition), Volume 146 (2000), Part 2]
[Senate]
[Pages 2207-2208]
[From the U.S. Government Publishing Office, www.gpo.gov]



                       THE INCOME TAX ANNIVERSARY

  Mr. GRAMS. Mr. President, 87 years ago today, the Federal Government 
began collecting income tax. I rise not to celebrate the anniversary, 
but to condemn the occasion. What began as a simple flat tax on the 
revenue of a few has turned into a Pandora's box that devastates many. 
And so I take this opportunity today to strongly urge Congress to begin 
repealing the process of the constitutional amendment granting the 
Federal Government the power to tax, abolish the income tax, and 
replace it with a tax that is fairer, simpler, and friendlier to the 
taxpayers.
  The reasons for abolishing the Federal income tax are compelling. To 
begin with, the income tax has clearly violated the fundamental 
principles upon which this great Nation was founded.
  Mr. President, our country was born out of a tax revolt--a tax revolt 
built upon freedom and liberty. To preserve liberty, our Founding 
Fathers crafted an article in the Constitution unequivocally rejecting 
all direct income taxes that were not apportioned to each state by its 
population.
  During the following 100 years, this provision brought enormous 
economic opportunities and prosperity for America. Although Congress 
attempted to

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enact income taxes in the late 19th century, the Supreme Court 
repeatedly declared the income tax unconstitutional. As a result, 
between 1870 and 1913, before the income tax was levied, the U.S. 
economy expanded by over 435 percent in real terms. This was an average 
growth rate of more than 10 percent per year, without inflation.
  Congress has passed many ill-advised laws, but nothing has been more 
disastrous than the passing of the 16th amendment in 1909, which 
allowed the Federal Government to begin levying and collecting income 
tax as of March 8, 1913.
  This shift in policy represented the efforts of those liberal 
elements who believes and promoted the ideology that society has a 
claim on one's capital and labor. They suggested that the 
redistribution of private income would increase equality among people. 
Their strategy was simple: they claimed this income tax was to ``soak 
the rich'' and was not supposed to provide a mechanism for Washington 
to reach into most Americans' pockets--the argument we still hear again 
and again on the Senate floor.
  Initially, less than 1 percent of all Americans paid income tax. Only 
5 percent of Americans paid any income tax as late as 1939. But today, 
nearly every American is subject to the income tax. The Federal tax 
burden is at an historic high. A median-income family can expect to 
give up nearly 40 percent of its income in Federal, State, and local 
taxes--more than it spends on food, clothing, transportation, and 
housing combined.
  More Americans are working harder and are earning more today. But a 
large share of the higher incomes of hard-working Americans aren't 
being spent on family priorities, but are instead being siphoned off by 
Washington.
  They are working harder, but they are taking home less money because 
the Government is taking a bigger bite out of their paychecks. Then 
there is ``bracket creep.'' I think everybody knows what that is. It 
means a large share of revenues goes to taxes as inflation pushes you 
into another income level, or another tax bracket, so Washington can 
get a bigger bite out of your paycheck.
  Mr. President, is this what our Founding Fathers fought for? Even the 
sponsor of the 16th amendment, Congressman Sereno E. Payne of New York, 
later realized his mistake and denounced direct taxation as ``a tax 
upon the income of honest men and an exemption, to a greater or lesser 
extent, of the income of rascals.''
  T. Coleman Andrews, a former commissioner of the Internal Revenue 
Service said:

       Congress [in implementing the 16th Amendment] went beyond 
     merely enacting an income tax law and repealed Article IV of 
     the Bill of Rights, by empowering the tax collector to do the 
     very things from which that article says we were to be 
     secure. It opened up our homes, our papers and our effects to 
     the prying eyes of government agents and set the stage for 
     searches of our books and vaults and for inquiries into our 
     private affairs whenever the tax men might decide, even 
     though there might not be any justification beyond mere 
     cynical suspicion.

  To my colleagues who would brush off that statement as an 
exaggeration, I remind them of the horror stories we heard from many of 
our constituents 2 years ago, when the Senate Finance Committee held 
hearings into abuses carried out by the IRS. Those poor taxpayers whose 
lives were shattered thanks to the unwarranted excesses of an overeager 
tax collector were not exaggerating.
  The income tax must be abolished because it has become so complicated 
and inefficient. The Federal Tax Code today stretches on for more than 
7 million words, and is made up of 4 huge volumes, another 20 volumes 
of regulations, and thousands of pages of instructions. Not even tax 
accountants or lawyers fully understand it. What chance does the 
average taxpayer have of getting it right?
  The government publishes 480 separate tax forms and mails out 8 
billion pages of forms and instruction each year. The IRS employs over 
10,000 agents to collect taxes, more agents than the FBI and the CIA 
combined.
  The income tax must be abolished because it keeps enlarging the 
government. In Washington, taxing and spending always go hand in hand. 
As the income tax rate goes up, government spending explodes. Between 
1913 and 1999, inflation-adjusted federal government spending increased 
by more than 16,000 percent.
  The income tax must be abolished because even in an era of budget 
surplus, it allows the government to continue overcharging Americans as 
we see today with our surpluses. According to the Congressional Budget 
Office, working Americans' tax overpayments will be as high as $1.9 
trillion in the next 10 years. After the biggest tax increase in 
history, President Clinton has repeatedly denied working Americans a 
tax refund and refuses to return tax overpayments to the American 
people. His last budget again increases taxes instead of cutting them. 
In a time of surplus, this President is out with a proposal to again 
increase your taxes.
  How is this possible? We would all agree that if a customer is 
overcharged for a service he receives, the right thing for the merchant 
to do is to return the extra money--not keep it because the merchant 
has other things he'd like to spend it on. The same principle holds 
true for tax overpayments. I strongly believe we should return tax 
overpayments to their rightful owners--the taxpayers--rather than spend 
them on new government programs. Not only does this money belong to 
them, but the American people will spend it far more intelligently than 
Washington politicians ever could.
  Mr. President, on this somber income tax anniversary, I argue that we 
have no choice but to repeal the income tax and abolish the IRS. I urge 
my colleagues to join me in a pledge that we will dedicate ourselves to 
replacing the Tax Code with a better system early next Congress, as we 
continue to do everything we can to reduce the existing tax burden on 
the overtaxed American people.
  The PRESIDING OFFICER. The Senator from California.

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