[Congressional Record (Bound Edition), Volume 152 (2006), Part 8]
[House]
[Pages 10247-10248]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  SAVINGS GROW WITH SIMPLIFIED USA TAX

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Pennsylvania (Mr. English) is recognized for 5 minutes.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I recently introduced a new 
version of legislation that I have introduced in the past, the 
Simplified USA Tax, or SUSAT, which reforms individual and business 
taxation while promoting economic growth, investment and personal 
savings, all tenets of a strong and stainable economy.
  Tonight I would like to focus my remarks on a critical component of 
SUSAT, which in my view provides a powerful antidote to the national 
savings crisis that we are combating today.
  Mr. Speaker, clearly our Tax Code is too complicated, and it is 
riddled with obvious inequities. Its current structure punishes savings 
and investment, which reduces economic and job growth and burdens 
domestic industry struggling to remain competitive. If Congress is 
going to succeed in reforming the American tax system, and I believe we 
must, we need to create a stable Tax Code that gives Americans a fair 
opportunity to save part of their earnings.
  Thrift has helped provide Americans the security and independence 
that are the foundation of freedom. Savings buys tools to make 
Americans more productive. Productivity raises our living standards to 
the highest in the world. But in recent years America has gone into 
debt, and it seems like we have stopped saving altogether.
  In 2005, stunningly, our national savings rate was in the negative 
for the first time since the Great Depression. America is facing a 
quiet crisis, the fact that our economy is now more dependent on 
foreign capital than on foreign oil.
  As you can see in this chart, whether Americans save or not simply 
does not affect them personally; it impacts on our national economy. As 
the savings rate has declined, our trade deficit has gone further into 
the red. Apart from the short-term market gains in the late 1990s, the 
trade deficit has closely tracked the savings rate. Taking the punitive 
taxes off of savings and encouraging the practice must be an essential 
element of reforming the Tax

[[Page 10248]]

Code because it not only translates into personal savings for working 
families, but it also has a job creating progrowth macroeconomic 
impact.
  In my tax reform proposal everyone is allowed an unlimited Roth-like 
savings account in which they can put a portion of each year's income 
they save after paying taxes and living expenses; and after 5 years all 
money in the account can be withdrawn for any purpose and all 
withdrawals, including accumulated interest and other earnings or 
principal are tax free. Nothing can be simpler and nothing can give the 
people a better opportunity to save.
  While Congress has taken some powerful measures in the past few years 
to improve the Tax Code, particularly for individual taxpayers, clearly 
we need to do more. We need fundamental tax reform. For too long the 
Tax Code has been a needless drag on the economy. That is bad public 
policy and certainly not fair to Americans whose living standards are 
lower because of it. It is time that we made some fundamental changes.
  I firmly believe that faster economic growth must be the key goal of 
tax reform, and encouraging Americans to save is one way of achieving 
that goal. Roth IRAs have a proven track record of increasing savings, 
and removing red tape, and expanding their impact will go the distance 
in altering the course of our national savings rate. SUSAT has the 
potential to serve as part of the groundwork for this kind of reform 
and ensure that Americans can keep more of their hardworking tax 
dollars, establish financial security, and invest in their future.

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