[Congressional Record (Bound Edition), Volume 146 (2000), Part 4]
[House]
[Pages 4812-4813]
[From the U.S. Government Publishing Office, www.gpo.gov]



             TAX RELIEF, TAX SIMPLIFICATION, AND TAX REFORM

  The SPEAKER pro tempore (Mr. Shimkus). Under the Speaker's announced 
policy of January 6, 1999, the gentleman from Ohio (Mr. Portman) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. PORTMAN. Mr. Speaker, I am here to talk about taxes. April 15 is 
drawing near once again, and I am joined by my friend, the gentleman 
from Pennsylvania (Mr. English), a member of the Committee on Ways and 
Means, and others, to talk about taxes, a topic that is on a lot of 
Americans' minds right now. It is a bottom line issue for families and 
businesses in my district and around the country as we draw close to 
tax filing deadline.
  Tax season is, in a sense, a time for renewed focus, and that focus, 
I think, ought to be on two things. First is the fact that taxes are 
too high, and second the fact that our Tax Code is far too complex. 
This afternoon we are going to focus a little on what this Congress has 
done and what it is trying to do to address these problems through real 
tax relief, through tax simplification, and through tax reform.
  There are a lot of different ideas out there, a lot of good ideas, 
and I think we will hear a little about them this afternoon. I would 
like to start by stepping back a few years, back when I was first 
elected to Congress, which was 1993. Just before I was elected, 
Congress, then run by the other party on the other side of the aisle, 
passed the largest tax increase in American history. In fact, Vice 
President Al Gore had to go to the Senate to break the tie vote in 
order for that to pass.
  We have to look at the changes that have happened since then, in a 
relatively short period of time. It has been 6 or 7 years, and we have 
made some progress. Instead of the tax increases that did mark those 
first years of the Clinton-Gore administration, we have had some tax 
relief. We have held the line on taxes and also we have been able to 
put through some good proposals.
  One is the child tax credit. A $500 per child tax credit to help 
families make ends meet. We have gotten that signed into law. We have 
also eliminated the unfair capital gains that people paid when they 
sold their homes. This is both tax relief and tax simplification. No 
longer do people have to keep records of every home improvement they 
make to make sure they can reduce their capital gains. This is the kind 
of legislation Congress ought to be passing.
  We have also developed, and we got it enacted into law, legislation 
that dramatically reforms and overhauls the Internal Revenue Service. 
That happened in 1998. It was the first time we had had major reform of 
the IRS in 46 years. It expanded taxpayer rights, adding 52 new 
taxpayer rights. It improves taxpayer services and brings the second 
largest agency in the Federal Government into the information 
technology age. We have still got a lot of work to do with the IRS, but 
at least now they are on a track towards real reform and 
reorganization.
  Just last year we attempted to follow through on these successes by 
passing legislation in this House that attempted to return a 
substantial portion of the nonSocial Security tax surplus. Not the 
surplus that goes into Social Security and Medicare, but the general 
revenues surplus. We tried to pass a substantial amount of that back to 
the taxpayers, who, after all, earned every dime of it. We did it 
because we believe that taxes are too high, that tax relief is 
appropriate as we build up these big surpluses, but also because we 
think the Tax Code is unfair.
  Yes, we provided tax relief across the board, tax relief to millions 
of Americans, but we also went into the Tax Code and found out what is 
not working. For instance, there is an unfair penalizing of marriage 
today. The marriage penalty is something we addressed in our tax 
legislation. We did this because we believe that families ought to be 
encouraged and we ought not to have a higher tax just because someone 
gets married. On average, it is $1400 per couple in this country.
  We also do not believe in taxation without representation, which is 
why we believe the unfair death tax ought to be repealed, and we passed 
that in this House.
  We also passed education tax relief. We passed health care tax 
relief. We passed tax relief for those who want to save and invest in 
our economy. And, finally, yes, we passed tax relief in the area of 
expanding 401(k)s, IRAs, and other pension vehicles to allow people to 
save more tax-free money for their own retirement. These are very 
important measures that will help millions of Americans keep more of 
their hard-earned money for their own needs and for their families' 
needs rather than relying on the government.
  Unfortunately, President Clinton chose to veto that tax legislation 
last year. This year we are back again. Congress has continued the 
fight to give taxpayers in this country a break. We have already passed 
in the last month here in Congress tax relief again focusing on the 
marriage penalty, to get rid of this unfair penalty on marriage. We 
have also passed our retirement security reforms, again to expand 
401(k) coverage for every American. And we have also passed some estate 
tax relief as part of the small business tax package we passed a few 
weeks ago.
  Again, these are part of our effort not only to return a substantial 
part of that nonSocial Security surplus back to the people who earned 
it, but also to make the Tax Code work better, to make it fairer, to 
correct some of the basic flaws we see in our Tax Code. Ultimately, of 
course, we need to take steps to fundamentally simplify and reform the 
Tax Code.
  The current income Tax Code and its associated regulations now 
contain 5.6 million words, seven times as many words as the Bible, and 
it is not nearly as interesting. Taxpayers now spend about 5.4 billion 
hours a year trying to comply with the 2,500 pages in the Tax Code and 
the 6,500 pages of tax rules and 8 billion pages of tax forms. The

[[Page 4813]]

cost of complying with the Federal income tax in this country is now 
believed to be in excess of $200 billion a year.
  That is more than 25 percent of the revenue of all the taxes 
collected. What a waste of money. And it hurts the economy, it hurts 
job growth, it hurts investment, and it means less economic opportunity 
for all of us.
  I learned firsthand from spending a couple of years working 
intensively on IRS reform just how many problems our Tax Code causes 
not just for taxpayers, which is evident to many of us as taxpayers, 
but also for the IRS itself. It is very difficult to have an IRS that 
works well given the complexity of the Tax Code. It makes the IRS 
bigger and more intrusive than any of us would like it to be, and it 
makes the IRS more costly and less efficient than it could be with real 
tax reform.
  That is why, for example, the new IRS reform law does contain some 
long overdue tax simplification encouragement. These measures are 
designed to force Congress prospectively, with new tax legislation, to 
come up with simpler ways to achieve the same results. There is now a 
tax complexity analysis that every new piece of legislation has to go 
through as it works its way through Congress. It will help Members of 
Congress consider for the first time the additional complexity caused 
by what might be otherwise good, sound and well-intentioned tax 
legislation.
  So tax relief and tax simplification and reform to correct the 
problems with the current code are very important steps we can and 
should take together. But it is time for us to take that next step to 
replace the current Tax Code with something that is simpler, fairer and 
less intrusive for all Americans. Again, there are a lot of good ideas 
out there for doing that. We will hear about some tonight.
  Some have proposed a flat tax on income. Others have proposed a 
fairer tax, a national sales tax, in place of an income tax. Other 
proposals out there as well are a value added tax, or more selective 
simplification of major parts of our current Tax Code.
  We need to get the public attention focused on this need for 
fundamental tax reform, and to encourage that, the Committee on Ways 
and Means here in the House of Representatives, next week, will host 
the first ever congressional tax reform summit. It will be an 
opportunity for all the Members of Congress and the public to come 
forward and to talk about tax reform issues and to examine the range of 
alternatives to our current tax system.
  For the past few years we have come to the floor close to April 15 
with another interesting piece of legislation, it is called the Sunset 
the Code Bill. It eliminates the current Tax Code by a date certain, 
forcing Congress and the administration to work together in that 
interim period to come up with an alternative. That legislation has 
passed the House in the past. I hope it will pass the House again this 
year.
  It has never been enacted into law, of course, because it has not 
gotten through the process or signed by the President. But next week we 
will try that again. This time under the leadership of our colleague, 
the gentleman from Oklahoma (Mr. Largent). We are going to try to bring 
a new Sunset the Code Bill to the floor that will, in addition to 
sunsetting the code, establish a new bipartisan, bicameral, the House 
and the Senate, congressional-presidential, meaning the House and the 
Senate and the administration, tax reform commission.
  This commission is going to have a very simple task, which is to make 
recommendations to Congress for fundamental tax reform and 
simplification. The commission is modeled on the National Commission 
for Restructuring the IRS that I headed up with Senator Bob Kerrey. I 
know commissions have a checkered past in this town, and it is easy to 
give problems to a commission and hope they go away, but some 
commissions do work. The IRS commission worked because it forced 
Congress to tackle that reform and to clean up the IRS.
  That is the hope here in having a nonpartisan panel to look at this 
very complicated, very contentious issue, study the issue, bring some 
expertise to bear, and try to take the politics out of the process and 
lay the foundation here in Congress for some very needed and important 
changes to our Tax Code.
  The commission will have 15 members, three appointed by the 
President, four each appointed by the Senate majority leader and the 
speaker, and two each appointed by the House and Senate minority 
leaders.
  The important thing is most members in this commission will be from 
outside Congress, from outside the Federal bureaucracy. They will be 
members on the commission from around the country with expertise to 
bring to bear. There will be one Member from the House that will be a 
Republican and one Member from the House that will be a Democrat, same 
on the Senate, one Democrat, one Republican. But, again, most members 
will be people from the outside who can bring expertise in a 
nonpartisan approach to this important problem.
  The commission will have a short timetable, 18 months, to complete 
its work and make a report to Congress, again on ways to fundamentally 
simplify and reform, fundamentally, reform the Tax Code. I would like 
to urge my colleagues listening tonight to support this effort and to 
vote for that legislation next week that is so important to move us 
from our current broken system to one that meets all our needs better.
  The tax season is a frustrating time of year for so many Americans. 
Many of us are doing our taxes now. The amount of taxes we have to pay, 
the complexity and basic unfairness of the Tax Code, makes a lot of us 
wonder if there is not a better way. There has got to be a better way. 
And Congress has heard those concerns. We are committed to changing the 
status quo. Let us start with meaningful tax relief and simplification 
where we can this year, but let us go beyond, let us also lay the 
foundation for the kind of long-term reforms that will give all 
Americans a fairer, a simpler, and a less intrusive Tax Code.
  With that, Mr. Speaker, I would like to yield back my time, with the 
understanding that my friend, the gentleman from Pennsylvania (Mr. 
English), a distinguished member of the Committee on Ways and Means, 
along with my friend, the gentleman from Georgia (Mr. Linder), another 
distinguished member of the Congress who has a lot of expertise on tax 
issues, will have a chance to continue this dialogue.

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