[Congressional Record (Bound Edition), Volume 147 (2001), Part 4]
[House]
[Page 5462]
[From the U.S. Government Publishing Office, www.gpo.gov]



                    THE TIME IS RIGHT FOR TAX REFORM

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Georgia (Mr. Linder) is recognized for 5 minutes.
  Mr. LINDER. Mr. Speaker, today the House of Representatives completed 
the third piece of President Bush's promised tax relief agenda. I have 
been proud to support President Bush with my vote in favor of all three 
of the components of this proposal.
  But now that we have succeeded in the House with tax relief 
legislation, we must begin to turn our attention toward tax reform 
legislation. For that reason, I have come to the well of the House 
today to tell my colleagues that soon I will introduce in the 107th 
Congress my fair tax proposal. This proposal, which will be introduced 
as H.R. 2525, as it was in the 106th Congress, is bipartisan, 
cosponsored by the gentleman from Minnesota (Mr. Peterson), my Democrat 
colleague.
  This is a serious proposal supported by academic research from 
Harvard, Stanford, Boston University, MIT, and more, and it is a 
popular proposal being supported by the over 400,000 members of 
Americans for Fair Taxation, and having had nearly $20 million 
privately raised and spent on economic and market research to support 
this effort.
  Mr. Speaker, let me tell my colleagues what we discovered. There is 
not a mechanism for a business to pay a tax. I have had several 
businesses in my life, and I never had that secret drawer where money 
piled up behind me to pay the corporate share of the payroll tax, the 
corporate income tax, or the accountants and attorneys to avoid the 
tax. It all gets embedded in the value of the product that is purchased 
by consumers, and the only taxpayers in the world are consumers who 
finally consume the product and all of the taxes embedded in it. 
Research we have had done at Harvard's economics department suggests 
that 22 percent of what one pays for at retail for personal consumption 
is the embedded cost of the IRS.
  My friends, a fair tax is a national retail sales tax with a rate of 
23 percent. You will pay 1 percent more for your cost of living, but 
you will get to keep your whole check, the whole check, including the 
payroll tax will no longer be taken out.
  By authorizing this one sales tax, we will eliminate the personal 
income tax, the business income tax, the payroll tax, the death tax, 
the capital gains tax, the sell-employment tax, and the gift tax. And, 
in doing so, we eliminate the IRS and all of its associated problems.
  If anyone read this morning's Washington Post, Treasury Department 
employees, acting as citizens, making phone calls to the IRS helpline 
to get help with tax returns, tell us that 47 percent of the responses 
they received from the IRS people were in error. That is up from 25 
percent 4 years ago. But our Treasury Department in which the Social 
Security resides tells us that 47 percent of their responses are wrong. 
They do not understand the system. It is time for it to go away.
  I believe that the time for tax reform has come. While I certainly 
believe that the fair tax is the best change, I believe we should have 
an open debate on others. I am willing to talk about the flat tax. It 
is better than the current system. I also believe that we virtually 
passed the flat tax in 1986 with only two levels of taxation and 
eliminating many of the deductions, and we have amended it 6,000 times 
since then. For as long as we know something about you and where you 
make your income and how much you make and how you spend it and invest 
it, we can find ways to tax it. America deserves this debate so we can 
totally revamp the system.
  Mr. Speaker, it has been said that the sales tax is regressive and 
hits most heavily on the poor. I want to say that the poor are paying 
it. Everything that anyone, rich or poor, buys has a 22 percent burden 
of the embedded cost of the IRS. Getting rid of the IRS will undo that 
burden. We also provide a rebate at the beginning of every month, for 
every household, rich or poor, to offset the entire tax consequences of 
spending up to the poverty line. The Federal Department of Health and 
Human Services tells us that poverty-level spending, which is $8,500 
for a household of one or $25,000 for a household of 5, will be enough 
spending to provide the necessities, the essentials of living, food, 
clothing, health care, housing. We believe that anyone should be able 
to buy those essentials with no tax consequences, and our rebate will 
cover those.
  Mr. Speaker, if anyone is interested in becoming a part of this 
effort, contact me or the gentleman from Minnesota (Mr. Peterson). We 
cannot change this world alone, but with the help of our colleagues and 
the enthusiasm of America, we will.

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