[Congressional Record (Bound Edition), Volume 151 (2005), Part 5]
[Extensions of Remarks]
[Page 6375]
[From the U.S. Government Publishing Office, www.gpo.gov]




  TAX REFORM--CONSTANT CHANGE IN THE TAX CODE AND THE PROBLEMS OF THE 
                           ``TEMPORARY FIX''

                                 ______
                                 

                          HON. JOSEPH CROWLEY

                              of new york

                    in the house of representatives

                       Wednesday, April 13, 2005

  Mr. CROWLEY. Mr. Speaker, I will give the Republicans credit, they 
have made a lot of noise over the past few years about lowering taxes, 
lifting the burden off of working and middle class families and 
improving America's tax structure for businesses and households. But 
this is blatantly untrue.
  I salute Mr. Hoyer for organizing this discussion tonight to let the 
American public know the truth about the Republicans and their tax 
schemes. For too long Democrats have allowed the Republican deception 
to continue, until now. Just as the previous speakers have stated, the 
American Tax Code and the tax policies have failed this country, they 
have failed working people, middle income families, the working poor. I 
also want to mention how these flawed Republican tax policies have also 
weakened the competitiveness of America's small businesses, 
entrepreneurs and corporations.
  These are the people that create the jobs that keep America working. 
The business community, which represents the true job creators of 
America, has had to deal with ever constant changes to the Tax Code, 
and so-called temporary fixes at the last minute. These leave American 
businesses and employers not able to plan for the future as they have 
no idea what the Tax Code will look like.
  Rather the Republican's business tax code plan is not about reform or 
simplification but rather can be summed up as the ``Full Employment for 
Accounts Act.'' Republican leaders repeatedly have talked about the 
need to make the tax system simpler and fairer. In fact, Speaker 
Hastert himself stated in December that America's tax system is quote 
``too complicated; it also hurts our Nation's competitiveness.'' He is 
right--but his Republican caucus has done nothing to address this 
issue. In fact, their actions show just the opposite.
  The Federal income Tax Code has grown from 500 pages in 1913 to 
45,662 in 2001 when Mr. Bush was elected to 25 volumes today. The 2001 
tax law added 214 million hours alone to the paperwork burden for small 
business people. They should be creating and investing and producing 
not figuring out their more and more complicated tax forms.
  Individuals, businesses, tax-exempt public and private entities spend 
nearly 6 billion hours complying with the Tax Code. And they call this 
simplification and reform. And this burden falls heaviest on our small 
business people and self-employed.
  IRS estimates that the average taxpayer with a self-employed status 
has the greatest compliance burden in terms of preparation--59 hours. 
Small businesses overpaid their taxes by $18 billion in 2000 and 2001 
because of return errors, a GAO report found in 2002. Tens of thousands 
of farmers overpaid taxes by an average of more than $500 because they 
failed to take advantage of income averaging, according to a Treasury 
Department report in March 2004.
  Despite repeated promises, no action was ever taken on fundamental 
reform of our tax system. Instead, the Republicans enacted legislation 
that dramatically increased the complexity of our income tax system. 
The Republican tax legislation used budget gimmicks, such as phase-ins, 
temporary provisions and overall sunsets, to hide the cost of their tax 
legislation.
  Today, while the Republicans hail their so called ``estate tax'' 
victory--in fact, what they have done is increase the estate tax for 
hundreds of thousands of small businesses by repealing the ``step up in 
basis'' and substituting in ``carry over basis'' rules that preserve 
the tax on increases in value of estates before death--hence making 
recipients now pay a capital gains tax on inherited materials, that 
people are now exempt from. So the death tax actually grows stronger 
under the sham Republican bill they passed today. And today not only 
will make their lives more difficult and their taxes more complicated, 
but it also makes their taxes Increase. As a result, we have a tax 
system that is quite unstable, leaving taxpayers uncertain about the 
law in the future.
  Business cannot plan for the future. Congress must end these 
gimmicks. It is time for Congress to make permanent the Research and 
Development Tax Credit. We must immediately provide a permanent tax 
credit for the health insurance expenses for the self-employed. We must 
end these tax loopholes, gimmicks and temporary tax solutions--as these 
are actually not helpful to businesses and entrepreneurs.
  We need real tax reform and real tax simplification. Something that 
the Republicans haven't been able to deliver 10 years. It's time for a 
real change in our tax law, by providing a real change in American 
leadership.

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