[Congressional Record (Bound Edition), Volume 153 (2007), Part 22]
[House]
[Pages 30686-30692]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         TAX BURDEN IN AMERICA

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from Texas (Mr. Brady) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. BRADY of Texas. Mr. Speaker, tonight, it is our opportunity to 
talk about the tax burden that families in America unfortunately must 
pay.
  I am a six-term Member of Congress. I represent the Eighth 
Congressional District of Texas. It's a great district that encompasses 
a great deal of east Texas from the Louisiana border over to I-45. I 
live in The Woodlands, Texas, just north of Houston, with my wife and 
our two boys, a kindergarten son named Sean and a third-grader named 
Will, who goes to public school, Sally K. Ride Elementary School. We 
are blessed to have a great school system in our community.
  I have enjoyed serving on the Ways and Means Committee because for 
many years, as I've told my wife, I get to go to work each day trying 
to cut taxes from families and small businesses so they have less of a 
burden. It seems to me we have an overtax, and we are an overtaxed 
Nation. Most families pay more in taxes than they do for food and 
housing and clothing combined. Many families work, and most workers 
work into June and July, actually, after July 4th, before they have 
paid all their taxes. They don't start working for themselves until 
almost the seventh month of every year.
  And just think about each of the days our families live. You wake up 
in the morning and you take a shower and you pay a water tax. If you 
get a cup of coffee, you pay a sales tax. If you drive to work, you pay 
a gas tax. At work you pay two taxes, an income tax and a payroll tax. 
You get home and turn on the lights, you pay an electricity tax. You 
turn on the TV, you pay a cable tax. Get on the phone, you pay a 
telephone tax. You get ready for bed and kiss your spouse and you pay a 
marriage tax. And you do this day in and day out for years until when 
you pass away, you pay a death tax.

                              {time}  2130

  We are an overtaxed Nation. This new Congress is bent on increasing 
that tax burden on America's families and those who create jobs. 
Already, this Congress has, in the House, approved over $110 billion, 
billion dollars, worth of new taxes. For those of us who believe the 
more you tax something the less that you get, what we are seeing is an 
all-out assault on jobs in America. We are taxing American energy 
workers.
  This Congress seeks to tax American capital, American manufacturing, 
American small businesses, and tomorrow, this Chamber is set to take up 
two new tax increases: a major tax increase on the real estate 
partnerships of America who build our apartments and shopping centers, 
our office buildings and industrial parks, and another tax that would 
increase the tax on hardworking Americans who have scrimped hard and 
saved to buy a second home, maybe a retirement home for their family.
  I am going to talk about this for just a minute, then I am joined 
with two of the leaders of the Ways and Means Committee who are going 
to talk about the alternative minimum tax, and we will talk about what 
is now called the ``mother of all tax hikes'' proposed by the chairman 
of the Ways and Means, Charlie Rangel.
  The two provisions I am talking about tomorrow that do not deserve to 
pass, one is a tax on the small partnerships that build America. Real 
estate partnerships are a routine, traditional, very responsible way to 
build facilities in our local community. This tax would tax those small 
businesses and partnerships, increasing their taxes $6.7 billion, 
billion, over the next 10 years. This tax increase is described by many 
as perhaps the most dangerous and risky tax increase on the real estate 
community since the 1986 tax law, whose changes drove many of our real 
estate into foreclosure, helped lead into the S&L, savings and loan 
credit problem, and will undoubtedly cost jobs in America. Some in 
Washington say, ``No, no, no. We are not targeting America's small 
business and real estate professionals. We are targeting Wall Street.'' 
The truth of the matter is that they are shooting at Wall Street; they 
are hitting Main Street. They are hitting our real estate partnerships, 
our energy partnerships, our venture capital and local groups that have 
done nothing wrong except build our infrastructure in our local 
community and help create jobs.
  It is simply wrong, in my view, to tax these organizations. They are 
the traditional, predominate business model. This tax increase will not 
only cost jobs, it will cost construction jobs. It will harm property 
values and really lower government revenue at the local level. I think 
it is important that we not punish the real estate partnerships that 
are such an important fabric of our country. And why risk, why help 
drive more of this housing bubble? Why cause more problems for the real 
estate industry when, in truth, we can encourage more of this 
development?
  The second tax increase we will face tomorrow, and I hope we will 
vote

[[Page 30687]]

down, is a tax increase that hits small businesses, or actually hits 
families that have saved hard for a second home. It is proposed that we 
change the tax increase, the capital gains tax, on people who own a 
second home. Now, we did some research on this. What we discovered, a 
lot of people think this is the wealthy. We did research on it and 
discovered that 40 percent of all the home sales last year were to 
second homes, four out of ten home sales to second homes. And those who 
bought those homes weren't wealthy. According to the National 
Association of Realtors, on average, their income was about $82,000. 
They were buying a second home for their family. Some were investing 
for their retirement. Others have a favorite lake or river that they 
have always dreamed of having a cabin on or a lodge on and may have, in 
fact, done everything right. Many of them have scrimped on their first 
home so they could try to buy another for their dream in their 
retirement, for their family's quality of life. It seems to me when you 
look at punishing people who have worked hard to try to buy that home, 
we ought not do it.
  When you look at the impact on your communities around the country, 
second home market's where it is very important to the local community. 
You see many of them in New England where you have buyers from New 
York, Washington, Philadelphia and all along the East Coast. You see 
many of them in California and in Florida where you naturally have 
retirees. But it is not limited to that. Arizona, North Carolina, all 
throughout the Midwest in areas where there are beautiful lakes and 
rivers and wide open spaces, then you have the high tech communities 
and others that invest in second homes.
  It just seems to me that this is dangerous to discourage this type of 
investment. I think we risk in the future harming the property values 
in the communities that rely upon these resort-type of homes and 
vacation homes. It seems to me unfair that we would penalize and punish 
people who have worked so hard to save. We ought not be doing that. We 
ought to be rewarding that type of behavior.
  My hope is that tomorrow as Congress or this U.S. House of 
Representatives considers these bills that, in fact, we reject these 
tax increases on the real estate partnerships that build America and 
reject tax increases on families that scrimped for a second home, maybe 
perhaps their dream home.
  With that, I would like to yield to the ranking member, the highest 
ranking Republican on the Trade Subcommittee on Ways and Means. This 
gentleman is from California. He is a conservative who has led the 
fight for tax relief in many areas throughout the years here in 
Congress. And I yield to the gentleman from California (Mr. Herger).
  Mr. HERGER. I thank my good friend, the gentleman from Texas (Mr. 
Brady) for leading this talk this evening on this incredibly important 
issue of the taxes that are about to be raised if we do nothing here in 
the U.S. Congress. I might mention, it was interesting listening to my 
friend talking about all the individuals that he knows of that will 
have their taxes raised. I have to give some of my background. My 
reason, I grew up in Northern California in a rural area just south of 
Yuba City, Marysville, in a dairy community, born in 1945, so raised 
during the 1950s and 1960s. Our family also had a small business which 
I worked in. My reason for becoming involved politically and running 
for office was not what government was doing for me, but rather as a 
small businessman and small rancher what they were doing to me. So this 
evening, I want to discuss something that is more that they seem to be 
wanting to do to us.
  Mr. Speaker, if you earned the same amount of money last year that 
you do this year and you write a bigger check out to the IRS this year 
than you did last year, you have just experienced a tax increase. The 
expensive alternative minimum tax measure recently introduced by the 
Democrats and the chairman of the Ways and Means Committee, Chairman 
Rangel, threatens to take us down the path of staggering tax hikes that 
will impact nearly every taxpayer. In fact, if that proposal were to be 
enacted, over the next 10 years, more than 120 million Americans would 
pay more than $312 trillion in additional taxes.
  Mr. Speaker, I have consistently supported doing away, outright, with 
the alternative minimum tax and am a cosponsor of legislation by my 
good friend, the gentleman from Pennsylvania (Mr. English) that will be 
speaking in a few minutes that will do precisely that. But the 
Democrats' ``mother of all tax hikes'' is the wrong approach on the 
American taxpayer. Ten years ago, most Americans had never heard of the 
AMT. Today, more and more middle-class families are becoming ensnared 
in this alternative tax regime.
  The AMT was created almost 40 years ago, in 1969, to make 155 of our 
Nation's wealthiest individuals, who were not then paying taxes, pay at 
least some level of tax. Yet, the income entry level for the tax were 
never set to be adjusted for inflation. So if Congress doesn't act 
soon, the number of taxpayers paying the AMT will rise from 4 million, 
now mind you that is up from 155, from 4 million last year to 23 
million this year alone. In other words, an additional 19 million 
middle-class taxpayers could pay an average of $3,800 more in taxes 
this year.
  House Democrats would have us raise taxes elsewhere to the tune of 
nearly $312 trillion over the next 10 years to do away with this AMT 
that was never intended. They claim this massive tax hike is necessary 
to offset, or make up for, the tax revenue that is lost with the 
termination of AMT. For a married couple with two children and an 
income of $45,000 a year, as well as some typical deductions, this 
could mean a new $1,500 tax bill. How is this possible if the 
Democrats' bill assumes that the landmark tax relief of 2001 and 2003, 
which we put through the Ways and Means Committee in this Congress and 
signed by President Bush, will expire 3 years from today? Including the 
lower marginal tax rates and the $1,000 child tax credit.
  Under this scheme, more than 94 million Americans with income between 
20 and $200,000 will see a major tax increase. I am seriously concerned 
about how these new taxes will affect taxpayers in my own Northern 
California congressional district. In 2005, just over 2 percent of all 
taxpayers in my district paid the AMT. If we fail to extend AMT patch, 
some 54,000 Northern Californians will have to pay the AMT this year 
alone. Again, this was a tax meant for only 155 of the wealthiest 
Americans who weren't paying any taxes in 1969.
  But what really troubles me is that the majority party's mother of 
all tax hikes would eliminate the AMT for this 2 percent and merely 
substitute it with higher taxes for almost every other taxpayer. This 
kind of pro-tax-increase thinking is simply unacceptable. We should do 
away with the AMT altogether. But the majority party's ``tax Peter to 
pay Paul'' approach is wrong and ignores a reality that the AMT was 
never intended to capture these Americans in the first place.
  I would like to thank, again, my friend, Kevin Brady, the gentleman 
from Texas, for hosting this important Special Order this evening and 
encourage all my colleagues to stand up for the taxpayers in their 
congressional districts and oppose the majority's proposed massive tax 
hikes.
  Mr. BRADY of Texas. Well, Mr. Herger, thank you for that. Let me just 
bore you on something. What you said was that under the Democrat 
proposal, all of President Bush's tax relief is set to expire, so an 
average family in Texas, for example, we had the expert run the numbers 
up here, our average Texas family would face an annual tax increase of 
about $2,800 a year, $2,800 a year. And I know that doesn't sound like 
a lot of money here in Washington, but back home, that is an awful lot 
of money to a family.
  Will families in California and other parts of the country face that 
same type of tax increase?
  Mr. HERGER. To my friend, yes. That is, as a matter of fact, that tax

[[Page 30688]]

increase could go as high as $3,800, and talking about average 
families.

                              {time}  2145

  Mr. BRADY of Texas. On top of that, besides letting the President's 
tax cuts expire, there is a new range of taxes, this mother of all tax 
hikes, MATH, that adds even more tax increases on top of that, is that 
correct?
  Mr. HERGER. That is correct.
  Mr. BRADY of Texas. Mr. Herger, thank you for raising this issue. 
Thank you for standing on behalf of families and for your leadership on 
tax relief in this country.
  Mr. HERGER. Thank you, Mr. Brady.
  Mr. BRADY of Texas. Our next speaker probably ought to be known as 
``Mr. Manufacture,'' because I don't know anyone who works harder on 
behalf of manufacturing workers in America, especially in the 
northeast, than the gentleman from Pennsylvania. He is a long-time 
member of the Ways and Means Committee. He has a tremendous reputation 
for looking out for the tax burden of families; more importantly, 
keeping our U.S. companies competitive so we can compete anywhere 
throughout the world against anyone and help create new jobs here in 
America.
  I would yield to the gentleman from Pennsylvania, Mr. English.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I thank the gentleman. I 
have been listening this evening to the presentations of the last two 
speakers and I am struck by how, with powerful presentations, I think 
with a logic which is difficult to challenge, and with oration rhetoric 
they have laid out the challenge facing American workers with a tax 
bill, with a tax initiative coming from the majority that is going to 
raise taxes on working families, driven by a budget by the majority 
that took revenues from applying the AMT to 23 million taxpayers and 
now is requiring the majority to look willy-nilly for ways of bridging 
that tax gap, we now come to the mother of all tax hikes, which has 
been rolled out in our committee, presented as a tax reform, but 
ultimately I think is an albatross that would be a dead drag on the 
American economy.
  There are so many problems with the majority's mother of all tax 
hikes that, frankly, Mr. Speaker, I sincerely doubt that one hour would 
allow us to do justice to all of them.
  So tonight I'd like to focus my remarks on how working families in 
districts like mine are, as a result of the bill, potentially going to 
be facing one whopping marriage penalty, see a reduction on the value 
of deductions for things like mortgage interest and State and local 
taxes. In addition, if they have got kids, they better be prepared to 
hang on to their wallet because it's going to take the revenue from 
dropping the child tax credit to $500 from $1,000, and raising the 10 
percent bracket to 15 percent. I'd also like to talk about how this 
bill will make America less competitive and cost America jobs, 
particularly in the manufacturing sector.
  Now, Mr. Speaker, beginning in 2001, the Republican majority at the 
time took steps to neutralize the marriage penalty. We were successful 
in reducing this unfair penalty on marriage and families in the Tax 
Code. Yet, in the mother of all tax hikes bill, the Democrat majority 
is proposing to resuscitate the marriage penalty and bring it roaring 
back to life.
  The MATH bill sets income thresholds for a newly designed surtax. But 
instead of setting the income threshold for married couples at twice 
the level of income as the threshold for single filers, the majority 
creates a gargantuan marriage penalty. In fact, the threshold for 
married couples is only 33 percent higher than the one established for 
single filers. This creates a 66 percent marriage penalty for taxpayers 
affected by this new surtax.
  This is one way in which the MATH bill moves our Tax Code clearly in 
the wrong direction. The very same surtax is at the heart of the new 
marriage tax penalty and is also going to diminish the value of 
deductions that can be claimed in the filing of taxes. These deductions 
include the mortgage interest deduction and the deductions for 
charitable contributions. Under the bill, the deduction for State and 
local taxes would also be diminished in value.
  How exactly are the Democrats going to erode the value of these 
deductions, and that is another shell game, Mr. Speaker. Because they 
would implement this surtax based on adjusted gross income instead of 
taxable income, the surtax is applied before you're able to make any 
deductions. While that may sound like something that only green-eye-
shade types can decipher, it's going to be hard not to understand the 
next time you end up tallying your taxes. The end result is simple: 
less money in the pocket of working families all across America.
  So to recap so far, the Democrats have put forward a bill that socks 
it to married couples in the form of a brand new mammoth marriage 
penalty and that decreases the value of any deductions that are 
available to the claimant, including the standard deduction. What else 
could they possibly dream up to tax the American family? How about the 
tax on families with kids? That, Mr. Speaker, is the next station this 
train wreck of a tax bill heads to.
  A magnifico in the Democrat Party in the House earlier this year 
called the alternative minimum tax the parent penalty. I guess that was 
a poll-tested term. In fact, it was during his national radio address 
on the AMT when the following was said, and I quote: ``While 
Republicans were passing multiple tax cuts for the very wealthy over 
the last 6 years, the Bush administration and the Republican Congress 
seemed to have forgotten about the middle-class families.'' The new 
Democratic Congress has made cutting the AMT, the parent penalty, our 
top priority for tax reform.
  Curiously, the Democratic budget and the MATH bill don't fix this so-
called parent penalty. Instead, it forces the taxman to drop the hammer 
on working families by increasing taxes on those the Democrats claim to 
want to help. To understand how the Democrats are now increasing taxes 
on middle-class parents, we have to go back to 1997 when the Democrats 
claimed Republicans were focused on cutting taxes for the wealthy. The 
Republican majority created the child tax credit in 1997, and then 
increased the credit from $500 to $1,000. It was limited at the top. It 
was capped in the families by income that would be eligible for it.
  Also, the Republican majority lowered the bottom tax bracket to 10 
percent from 15 percent. Those are working families at the bottom end 
of the economic ladder who benefit from that. Yet the Democrats in 
their budget want the child tax credit to revert to $500 and those in 
the lowest tax bracket to pay 15 percent instead of 10 percent.
  So using the current level of tax and value of the credit and then 
comparing it to the tax rates imposed on middle-class families in the 
MATH bill, just how do parents fare? The answer may surprise you, given 
all the Democratic rhetoric flying around the Capitol in recent years. 
Let's look at an example to see what is really going on.
  Peter and Kelly of Waterford, Pennsylvania, are a married couple with 
two children and have an adjusted gross income of $45,000 in 2011. They 
have four exemptions totaling $14,800, plus $13,000 worth of deductions 
for their charitable contributions, mortgage interest and State taxes. 
Under the current tax system, Peter and Kelly would have a negative tax 
liability of $275 and would get a check from the taxman. Under the MATH 
bill proposed by the Democrats, however, Peter and Kelly would owe the 
taxman over $1,500.
  How can that possibly be? After all the Democrats said they wanted to 
help working families like Peter and Kelly. The fact is that the 
Democrats are playing fast and loose with their rhetoric and are now 
playing the game of three-card monte with this family. They say they 
are removing something called a parent penalty, but by assuming the 
expiration of the 10 percent tax credit and the child credit declining 
to $500, the tax bill doesn't lie. This is a big tax increase and in 
some respects a different standard of living for these parents.

[[Page 30689]]

  That is why it is so important to talk about just how bad this bill 
is. With all the information in hand, taxpayers won't be fooled by the 
Democrats' smoke and mirrors. The only ones foolish enough to believe 
the claims about this bill, I believe, are my colleagues themselves on 
the other side of the aisle.
  If that wasn't enough, Mr. Speaker, the majority proposes to vault 
U.S. individual tax rates to among the highest in the entire developed 
world. When the surtax included in the MATH bill is combined with the 
take-the-money-and-run revenue grab of repealing the 2001 and 2003 tax 
cuts, the majority would leave the top tax rate at more than 44 
percent. Of all the members of the Organization for Economic 
Cooperation and Development, that is the club of the developed world, 
only five would have higher top marginal tax rates in 2011. This is a 
staggering increase on the top rate.
  Some will counter that this increase is only fair because it is 
directed at only the wealthiest individuals in our country. But those 
critics would be dead wrong. They would fail to recognize that this 
crushingly high tax rate will affect small business owners and farmers 
who report business income through the individual tax code and will 
cripple the engine of opportunity, job growth and innovation that makes 
our economy strong. This is the most dynamic part of our economy.
  In fact, the Heritage Foundation has estimated that this bill, in 
conjunction with the repeal of the 2001 and 2003 tax policies, would 
have the effect of eliminating the entire economic output of my 
hometown of Erie, Pennsylvania, seven times over each year beginning in 
2011.
  All year, Democrats have been blindly and steadfastly hanging on to 
the misguided theory that taxpayers are worse off as a result of the 
2001 and 2003 tax relief. Their theory is that because those taxpayers 
got a tax cut, they were more likely to go into AMT status and 
therefore be subject to a higher tax bill from Washington.
  Not everything in their theory is completely inaccurate. Yes, as a 
result of the 2001 and 2003 tax relief, more taxpayers were subject to 
the AMT, and the reason is simple: you are subject to the AMT if your 
liability under it is higher than your liability under the regular tax. 
The part they have wrong is that those taxpayers are worse off as a 
result of now being in the AMT. In fact, they are not worse off than 
they were, because without the 2001 and 2003 tax policies, they would 
have paid the same or higher taxes than they do now, even in the AMT.
  Where this story gets interesting, however, is that the Democrats' 
own logic is now turned against them and exposes a major flaw in their 
bill, the mother of all tax hikes. The stakes are high and job creation 
hangs in the balance. Unfortunately, the mother of all tax hikes will 
dole out one serious beating, particularly on small manufacturers, on 
innovators, on entrepreneurs, and ultimately on job creation.
  To understand why, let's borrow the Democrats' own theory, namely, 
that if rates are lowered, more taxpayers will be subject to the AMT. 
Only this time, under the mother of all tax hikes, the taxpayers are 
getting thrown into the AMT as employers.
  The individual AMT is not the only monster lurking in the Tax Code. 
Similar to the individual AMT, the corporate AMT is a horribly 
inefficient and counterproductive parallel tax system, a source of 
complexity. The Democrats' bill will, by virtue of modestly lowering 
the corporate income tax rate, have the effect of increasing the number 
of corporate AMT taxpayers.
  What do the Democrats do to head off this problem, which they decried 
as a fundamental unfairness when the Bush tax cuts did the same things 
for individuals? Not a thing. Nothing at all. Nada.
  Why is this more important, you may ask? Won't they be better off 
than they would have been absent the tax cut? While it may be true that 
corporate taxpayers thrust into the corporate AMT as a result of the 
mother of all tax hikes may not pay more tax overall, the corporate AMT 
has built in disincentives to capital investment and job growth.
  In short, the corporate AMT, especially for capital-intensive 
industries, such as the ones in my district, manufacturing, forces 
employers to choose between investing in their tax bill or investing in 
job creation. I, for one, have long advocated for a Tax Code that 
embraces incentives to create jobs, as opposed to a policy that is a 
dead drag on the economy.
  In addition, by lowering rates but not dealing with the corporate AMT 
at the same time, the mother of all tax hikes will further entrench 
employers already in the AMT. This will make it even harder for those 
taxpayers to get out of the AMT.
  The practical consequence of this is that existing corporate AMT 
taxpayers, being forced to stay in the AMT longer, or even 
indefinitely, will not be able to use the AMT credits that they have 
accumulated.

                              {time}  2200

  These credits are given so a corporate AMT taxpayer will be able to 
offset future tax liability as a way to make sure that the AMT is not a 
permanent tax increase. But unless the taxpayer can ultimately leave 
the AMT, the reality is, in effect, it is a permanent tax increase. In 
other words, by increasing the strength of the AMT's hold on taxpayers, 
it will likely translate into a permanent tax increase for some 
employers that find it difficult to get out of the AMT, and many of 
these are tax sensitive.
  This is absolutely the wrong direction for Congress to take. Instead 
of entrenching the corporate AMT in the Tax Code, we should be 
repealing it outright. The corporate AMT turns incentives enacted by 
Congress to spur new investment and create jobs into liabilities. This 
includes research and development activity and the purchase of new 
equipment.
  Because more firms are subject to the AMT during economic downturns, 
the AMT increases taxes during recessions and decreases them during 
relatively prosperous periods. This artificially accentuates natural 
market cycles and unnecessarily destabilizes the economy.
  The end result is job loss and employers being forced into protracted 
fears of stagnation when it comes to investment in ingenuity. Not only 
does the mother of all tax hikes fail miserably to deliver on its 
promise of middle-class tax relief, but it also makes an intense effort 
to put those middle-class taxpayers out of work.
  This is a bad initiative. It is one borne of ideology rather than 
practical experience. It is a bad tax policy, and we know from past 
experience that an old saw of Daniel Webster's holds true: The power to 
tax is the power to destroy.
  If we allow these higher taxes to go into place, it will have a 
negative impact on our economy, on many of our working families, on 
many families that we have sought to support through judicious use of 
the Tax Code.
  Mr. Speaker, I think it would be a terrible mistake if, without a 
fight, we allowed this Democrat tax bill to go into law masquerading as 
tax reform, but basically dramatically increasing the amount of our 
national wealth that is confiscated.
  I am prepared to join this fight. I am delighted to join the 
gentleman from Texas and others. I believe there will be a clear 
philosophical difference laid out before this Congress between those 
who want to reform the Tax Code through simplification, putting in 
place the right incentives and pro-growth economic policies, and those 
who want to game the Tax Code and generate more revenue at whatever 
economic cost and shift more and more of the burden down to the middle 
class. This is a fight worth having, and I am proud to join the 
gentleman from Texas to be part of it.
  Mr. BRADY of Texas. I appreciate the gentleman from Pennsylvania.
  In the name of tax reform, according to the Joint Committee on 
Taxation's report that came out today, even though this is called tax 
reform, 113 million families will see their tax burden go up and only a 
few, 9 million,

[[Page 30690]]

will see their taxes go down; is that correct?
  Mr. ENGLISH of Pennsylvania. That's correct. What we are seeing is a 
vehicle being called ``tax reform'' being used as a locomotive to drive 
higher taxes, higher revenues, and higher spending levels. This is an 
attempt in the name of fiscal responsibility to take more from the 
American economy, more from American working families, more from the 
public at the expense of the private economy.
  Mr. BRADY of Texas. And as I understand it, although this proposal 
will soak the wealthy and the small businesses in America, it also 
soaks the working-class families, many who make less than $75,000 a 
year, according to the report released today, will see a major increase 
in their taxes. These are families that make less than $75,000 a year, 
it will increase taxes on those families?
  Mr. ENGLISH of Pennsylvania. That is precisely correct. That is 
something that I think needs to get out to the American people before 
we have this debate.
  Mr. BRADY of Texas. And I know we are having a debate tomorrow on the 
alternative minimum tax. I think many of us are concerned that this is 
an opportunity to increase taxes. The alternative minimum tax was a 
mistake to begin with. It targeted a few wealthy millionaires. Now it 
has spread unintentionally to 3 or 4 million Americans. There is an 
argument in Washington today that says to a person, we intend to tax 
you in a couple of years, but we are not going to do that and so we 
will increase taxes on other Americans to cover the tax increase you 
don't have.
  Mr. ENGLISH of Pennsylvania. And what is particularly perverse about 
it, to respond to the gentleman, is we are talking here about permanent 
tax increases, to provide temporary protection to other taxpayers. 
Ultimately they have created a series of PAYGO rules that allow them to 
go in each year, hold certain taxpayers harmless, but at the expense of 
permanent increases in revenue into the foreseeable future.
  What they are doing is setting up a system that can be gamed that 
will permit them to go forward and raise taxes each year without 
calling it a tax increase where they are trying to avoid the label. I 
think that is particularly perverse because what it assumes, even as 
Republicans for years when they were in power each year tried to look 
for ways of cutting taxes, it seems like the Democrats have set up a 
PAYGO system by which they will be able to go in each year and justify 
tax increases.
  They may call some of it loophole closing, but it is higher taxes, 
and they are going to be looking for more and more creative ways for 
generating more revenue for years to come, particularly as the cost of 
patching under their rules, the cost of patching the AMT each year 
grows higher.
  Mr. BRADY of Texas. I think many of us believe it is right to 
eliminate the alternative minimum tax. It is a mistake. It is a second 
tax. It is a wrong tax, and should be stopped today. Many of us believe 
that should not be an excuse for raising taxes on others. In fact, the 
best solution is if you look at the next 10 years of spending in 
America, our government will spend nearly $50 trillion over the next 10 
years. And I think many of us believe that rather than finding excuses 
to add tax burden to American families and small businesses, we ought 
to sit down together, both parties, and see if we can identify less 
than a trillion dollars of that.
  Mr. ENGLISH of Pennsylvania. I think the time has come to put 
together budgets where the math is accurate, where the math isn't based 
on phantom revenues, where the math doesn't assume the phaseout of 
taxes every year, and where the math is not based on applying new taxes 
to whole new classes of taxpayers, particularly a tax that was intended 
for the wealthy but increasingly is being targeted to the middle class. 
I think we need to take this opportunity to make a departure from past 
practice.
  As the gentleman knows, when we were in the Ways and Means Committee 
marking up the unfortunate patch bill that is being brought to the 
floor tomorrow, I put forward an amendment that was defeated by the 
majority that was consistent with their budget rules, that would have 
eliminated the AMT by a date certain. This is something absolutely 
consistent with their budget practices. They claim to want to get rid 
of the AMT. But when they had a chance to actually get rid of the 
alternative minimum tax, they voted us down on straight party lines. 
This would not have done violence to any of their budget calculations. 
It would not have required them to adjust their current budget. It 
would have just required them to acknowledge that they have to stop 
using the AMT in the outyears to plump up their revenues because they 
are not entitled to that revenue. Congress never intended to apply this 
tax, the AMT, to middle-class taxpayers. And the fact that the majority 
party is so addicted to its revenue that they are not willing to just 
say no I think tells the entire tale.
  Mr. BRADY of Texas. I thank the gentleman from Pennsylvania. I think 
there is a clear philosophical difference between the two parties. As 
Republicans, we believe what you earn is your money. I think our new 
majority here believes what you earn is the government's money.
  I think most of us agree before we ask through these tax increases, 
before we demand that families tighten their belt, maybe us in 
Washington ought to be tightening our belts first to try to put this 
government on a diet and try to make better use of the moneys that the 
people send us.
  I appreciate the gentleman from Pennsylvania's leadership on this 
issue.
  Mr. ENGLISH of Pennsylvania. I thank the gentleman.
  Mr. BRADY of Texas. I turn now to the gentleman from New Jersey who 
represents both rural and suburban households, some who do well, but 
others who are just working-class Americans. He has fought hard against 
tax increases during his time in Congress, and I welcome the gentleman 
from New Jersey (Mr. Garrett).
  Mr. GARRETT of New Jersey. I appreciate that and thank the gentleman 
from Texas for your work on this issue.
  I also commend the gentleman from Pennsylvania because I know he has 
been championing this issue and cause for a number of years. And I 
believe during his remarks he mentioned the piece of legislation he has 
had in this House for some time as well.
  In his usual, understated way, the gentleman from Pennsylvania ended 
his remarks by saying this will begin a philosophical discussion, and 
the gentleman from Texas picked up on that as well. Indeed it is a 
great philosophical discussion to point out the disparity between the 
two parties. The Democrat Party, which is now in control of the House 
and the Senate, we can see from their actions during the past 11 months 
that they have been in control that families should be compelled to 
keep their house in order but Congress does not have to be forced to 
live within its means. They do that every time they come to the floor 
with another tax increase, which we will see shortly when their AMT 
bill comes, that Congress does not have to live within their means. The 
focus should be, instead, on the family budget, as we have always said 
on this floor in the past.
  Before I came to the floor, I want to do a little aside, I was 
reading this current issue of Human Events, the week of November 5. It 
is a front-page story by Andrew Boylan: ``Rangel tax reform riddled 
with tax hikes.'' He has an expression in here, and I think it points 
out what Charlie Rangel and the Democrat majority are trying to do in 
the House. It says, ``Chairman Rangel's plan isn't just robbing Peter 
to pay Paul; it is robbing Peter and Paul while convincing both of them 
that the other guy is the one paying the higher taxes.'' That really 
puts it in a nutshell.
  What you will hear from the other side of the aisle when they begin 
to explain this is no, we are just trying to set things straight. We 
are just trying to rectify a problem from the old AMT.

[[Page 30691]]

But at the same time they really, in reality, are shifting it. No, they 
are robbing from all of us, the entire American population, and they 
will be trying to convince all of us through the spin and the rhetoric 
that we hear that the other guy is paying it. That is not the case at 
all.
  You know, the word ``AMT,'' for those who don't follow this issue 
very closely, has a good name, alternative minimum tax. At first blush 
that sounds like something that you would want to pay instead of what 
you are currently paying.
  ``Alternative'' makes it sound like it is voluntary. ``Minimum''; I, 
too, would like to pay the minimum amount of taxes. But those words are 
deceiving just as the Democrat plan is deceiving. It is not alternative 
in the sense that it is voluntary. It is mandatory. You are compelled 
to pay the higher of the tax. And it is not minimum in any sense of the 
word. It is a maximum tax. That will be exactly what we get when the 
Democrats give us Charlie Rangel's bill of an alternative minimum tax 
fix.
  Now the gentleman from Pennsylvania talked about a piece of 
legislation that he has worked on, which I have cosponsored as well, 
that tries to address this by simply repealing the entire AMT. It 
repeals the entire alternative minimum tax so that citizens of this 
country will not have to pay that higher tax.

                              {time}  2215

  I've cosponsored that legislation, and I support it, but let me just 
digress for 30 seconds here and just say that I also have sponsored a 
piece of legislation to address the AMT in this session of Congress. It 
does not go so far as to totally repeal the bill, but what it does is 
to try to do, let's say, a compromise measure, if you will, if we can't 
get that far because the other side of the aisle will not go so far as 
to giving American taxpayers that total relief. And what it does is it 
meets it halfway.
  From my perspective, it gets halfway and says let's put a COLA in 
that bill, a cost of living adjustment into it, so that the AMT could 
do what it was actually intended to do several decades ago, target 
those very, very, very, very few. Back then, there were was only 150 of 
those taxpayers out of 200 million people, those taxpayers who were not 
paying any taxes, and put a COLA into it so that it would be just 
adjusted just as the rest of the tax breaks. So when your income goes 
up each year due to inflation and what have you, you would not find 
yourself falling into it.
  So if the Democrats can't go so far as some of us, as Congressman 
English and others of us believe that we would like to see here, and 
that is to totally repeal, take away that burden on all American 
taxpayers, I would hope that they would see instead some sense to 
reaching halfway at the very least and saying let's make sure that it 
does not swallow up so many of the individuals in this country. If we 
don't do anything shortly, 22 million Americans will see their taxes go 
up dramatically.
  Now, I come to the floor, as the gentleman from Texas says, from the 
great State of New Jersey, and I speak with some experience as to the 
fact that sometimes the other side of the aisle, both on a Federal 
level and on a State level, will try to deceive us on some of these 
things as to who they're really going after.
  Here, if you read and listen to the rhetoric from the Democrats on 
this issue, they're saying, well, we're just trying to go after the 
rich people in this country. In New Jersey, a few years ago, there was 
Governor McGreevey at the time. They said the same thing. They said 
we're going to go with a millionaire's tax, and of course, the average 
citizen said, hey, that's fine, they're not coming after me; they're 
going after the other guy; in effect robbing Peter to pay Paul and 
convince them it's the other taxpayer that's going to pay the bill.
  But you know what happened there. That millionaire's tax in New 
Jersey started at $1 million, and then suddenly it went down to 
$900,000, then $800,000, $700,000, and it kept on going down lower and 
lower and lower until eventually it covered just about everybody. 
Anybody who had a household where the husband and wife worked, you had 
a husband maybe a policeman and the wife might be a school teacher or a 
nurse or something like that, they became covered by that so-called 
millionaire tax in New Jersey.
  It was the so-called tax that started out as a rifle shot at just a 
select few and instead turned into a shotgun approach and encompassed 
everyone. Same thing that's happening right here with the AMT so-called 
relief that we're getting from the Democrats, so-called going after the 
millionaires; but it's going to cover all of us with higher taxes.
  When I say higher taxes, one of the things I say on the floor just 
about every time I come to the floor, I say this. We are now in 
November, the eleventh month of the year, which means we're on the 
eleventh of Democrat control of this House, and we should always ask 
ourselves, what has 11 months of control by the Democrats wrought for 
this House and the country.
  It has initially brought us the largest tax increase in U.S. history. 
It has brought us the creation of slush funds in the various 
appropriation and budget bills that they gave us at the beginning of 
the year, and it has gotten rid of any hint of transparency in the 
earmark rules of this House, some things that they campaigned on.
  The issue of tax increases continues here tonight, and if I have just 
another minute, they gave us the largest tax increase initially when 
they gave us the budget at the very beginning of the year. Since that 
time, in just about every piece of major legislation that the Democrats 
have brought before this House, you have seen a tax increase. In bills 
that you would never even imagine would have tax increases, they have 
it. And let me just take a moment just to run through a list, and I 
don't have a chart to put up behind me so I'll have to give it to you 
this way.
  The CLEAN Energy Act, we're all in favor of clean energy, I suppose, 
but it includes a $7.7 billion tax increase over 10 years. The Small 
Business and Work Opportunity Tax Act, $1.38 billion. Katrina Housing 
Tax Relief, tax relief, it sounds as though they're giving us tax 
relief. No, it's raising taxes by $241 million. Taxpayer Protection 
Act, $23 million increase. To amend the Internal Revenue Code, well, we 
all want to do that, but who knows. When they did it, they raised taxes 
by $14 million.
  U.S. Troop Readiness, Veterans' Care, Katrina Recovery and Iraq 
Accountability Appropriations Act. Gosh, by the name of that, they're 
all great things, U.S. troop readiness, Katrina recovery, but you know 
what, they tucked in a tax increase there. How much? $4.4 billion. 
Second bill, same name, H.R. 2206, $4.8 billion.
  The Andean Trade Preferences Act, $105 million tax increase. Farm 
Nutrition and Bioenergy Act, $7.4 billion Democrat tax increase. The 
Children's Health and Medicare Protection Act, get this one, $54.8 
billion Democrat tax increase.
  Just three more. The Renewable Energy and Energy Conservation Act, 
what does that have to do with taxes? Well, for the Democrats, it's $15 
billion in tax increases.
  The Airport and Airway Trust Fund Financing Act, trying to make our 
airports better. Well, how do they do it? They do it by raising our 
taxes by $1.8 billion.
  And, finally, the Mortgage Forgiveness Debt Relief Act. Who could be 
against mortgage forgiveness and debt relief? Well, the debt is going 
to be on our shoulders because they're raising taxes by $2.005 billion.
  You add up that whole list, and this is even before we come to the 
bill that's before us tomorrow, that comes to $106 billion tax increase 
over 10 years, on top of the largest tax increase as I mentioned in the 
budget at the beginning of the year.
  Let me just conclude. I see our time is coming down. These numbers 
are for me, and I think most Americans, hard to put your arms around 
when you are talking about such high tax increases. The bottom line, 
though, is put them in large absolute numbers when you're talking about 
$106 billion or the $70 billion in permanent tax increases as the

[[Page 30692]]

gentleman talked about, or as a Member from the other side of the aisle 
admitted, 130 percent tax increase, whether it's percentages or 
absolute numbers, put them down in day-to-day numbers. It's around 
$2,400 on the largest tax increase to the average American household 
that you will be seeing.
  The question we have to ask is the one I started with and the one 
that the gentleman from Pennsylvania ended with. It's a philosophical 
discussion. Are we going to put the focus on the American budget or the 
family budget? I suggest, and this side of the aisle suggests, the 
focus should be on the American family's budget to allow the American 
taxpayer to keep as much of his money as possible and not see another 
tax increase on that family budget.
  Mr. BRADY of Texas. Mr. Speaker, I thank the gentleman from New 
Jersey for pointing out we do have a choice between higher taxes and 
tightening our belt here in Washington, DC.
  As a Republican, as a conservative, I'm convinced that the reason 
Republicans got fired from their job of leading Congress is that we 
didn't balance the budget. We didn't secure the border. We didn't lead 
with integrity. And I think it is a fair criticism that we should have 
done much better in getting a handle of this spending machine that we 
call Washington, D.C.
  However, I hear all the time the reason we have record debt and the 
record public debt is because of our tax increases or tax relief 
spending and we did not pay for the war.
  The truth of the matter is we are having record revenue here in 
America. After 9/11, during the recession and after 9/11, we actually 
saw a decrease in revenue the first time in years, not slowing, a 
decrease. We put in place tax relief to help spur the economy, create 
new jobs. Our thought was we want to create jobs around America, leave 
the money in the pockets of Americans so it can work around Main Street 
and the shopping centers and go to work, and it has done that. We've 
had 7 million new jobs created over the last few years, record 
revenues, double digit revenues coming in to Washington. Our problem is 
not our revenues. Our problem is spending.
  We hear criticism that Democrats do not support tax relief or the new 
spending and they would have paid for the war. But the truth of the 
matter is the first President's tax relief was $1.3 trillion that 
Republicans proposed. Democrat tax relief was $1.2 trillion tax relief 
that they voted.
  The second major tax reform, the Jobs Creation Act 2004 was passed 
overwhelmingly with nearly 80 Democrat Members joining in that tax 
relief. The spending on recovering New York from 9/11 was bipartisan, 
overwhelming. The spending on Katrina and Rita was bipartisan and 
overwhelming. Medicare, the Democrat Medicare plan was three times as 
large as the Republican plan.
  In fact, all of the spending bills the Republicans proposed that 
Democrats opposed, they opposed not because they were too small, but 
they weren't high enough.
  And so what we are faced today with is a choice between raising taxes 
to balance the budget. We're tightening our belts, working together, 
Republicans and Democrats, and I know up here that seems to be a 
poisonous thing to do. But the truth of the matter, I think most 
Members of both parties would like to balance this budget as best we 
can, as soon as we can. I don't think we ought to increase taxes to do 
it. There are better ways.

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