[Congressional Record (Bound Edition), Volume 153 (2007), Part 6]
[Senate]
[Pages 8819-8820]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               TAX REFORM

  Mr. CORNYN. Mr. President, I thank the Senator from Oregon. I walked 
in on the tail end of his remarks, but he and I are going to be on a 
consistent theme today, and that is, the importance of tax reform. I 
look forward to reviewing his proposal because we are all on the same 
side.
  The current IRS Code is broken. We, the Congress, need to fix it.
  This last weekend, I was at a small business in Dallas, TX, called 
the Manda Machine Company. This small employer employs about 20 people 
in the Dallas area. We talked about the burdens on small businesses 
that make it harder for them to create jobs. In particular, we talked 
about the IRS Code and the importance to make it fairer, simpler, and 
flatter.
  Common sense also tells us we need to make the IRS Code a whole lot 
more transparent; in other words, ``readily understood,'' ``clear,'' 
``easily detected'' or ``perfectly evident,'' which is the dictionary 
definition of ``transparent.'' But according to that definition, it is 
clear the IRS Code fails the transparency test.
  Now, I believe we ought to continue to let in a little bit more 
sunshine in how the Government operates and how the people's money is 
being spent. I

[[Page 8820]]

think we also need to add a little bit of sunshine to how the Federal 
Government taxes the American people. The Federal Government should not 
be playing a game of ``gotcha'' with the owners of the American 
Government; and that is, we the people.
  For example, the vast majority of Americans now require professional 
assistance to help fill out tax documents. Why it is the Code is so 
complex is simply beyond me. Even taxpayers who want to try to figure 
out how to do the right thing have a hard time doing it on their own 
and require the assistance of lawyers and accountants to try to figure 
out how to comply with the law. Six out of every 10 taxpayers in 
America today require the help of an outside expert to figure out how 
to do their duty when it comes to paying taxes.
  Families and entrepreneurs alike spend billions of dollars and 
thousands of hours trying to figure out how to comply with the IRS 
Code. In fact, it is estimated taxpayers in America will spend 6 
billion hours complying with the IRS Code at an estimated compliance 
cost of $265 billion. This has more than doubled in just over the past 
10 years, and estimates are it will continue to increase at a faster 
rate in the future. This is a statistic that is staggering.
  The number of pages in the Federal tax rules has exploded by more 
than 50 percent in the last decade alone. In fact, since the last major 
reform effort in 1986, there have been more than 14,000 changes to the 
IRS Code. The Federal Government and Congress in particular should not 
be in the business of picking winners and losers when it comes to 
taxpayers in this country. But that is what an exceedingly complex IRS 
Code does. It provides exemptions, credits to a variety of different 
taxpayers under a variety of different circumstances, picking winners 
and losers in the process. That is not what the IRS Code should be 
doing.
  Changes, we all know, are long overdue. There can be no doubt the IRS 
Code and accompanying forms are burdensome, onerous, and unduly 
complicated. The complicated system comes at a cost. Every year, the 
National Taxpayer Advocate highlights this complexity in one way or 
another as one of the top 10 problems that taxpayers face when trying 
to figure out how to comply with the law.
  The IRS Code, as I indicated a moment ago, is full of special 
interest loopholes. With every year that passes, American taxpayers 
spend more and more time to try to figure out how to comply with these 
burdensome provisions. Taxpayers will also work longer this year to pay 
for the government--a total of 120 days of their income will be used to 
fund the government. In other words, Tax Freedom Day will not come 
until the end of April. That means for the first 120 days of the year 
we all work for Uncle Sam, and then we get to the fruits of our labor 
thereafter, where we get to keep it, use it on our families, or save 
it, however we may see fit.
  But this year, taxpayers will work longer to pay for Government than 
they will work to provide for food, housing, and clothing combined, 
which is 105 days, for those three essentials of life--food, housing, 
and clothing.
  Taxpayers will work longer to pay their Federal taxes--79 days--than 
they will work to pay for housing, which is roughly 62 days. For health 
and medical care, the estimate is, it takes 52 days to work to provide 
for those essentials. Transportation is 30 days, and clothing is 13 
days.
  Whatever our tax system, be it a flat tax, sales tax, or income tax, 
it ought to be based on three fundamental ideas: simplicity, fairness, 
and transparency. I think these simple ideas should be our guide in 
reforming and simplifying our tax laws.
  While comprehensive tax reform may not be right around the corner, 
the last thing we should do is to raise taxes on families and 
entrepreneurs and let the tax relief Congress passed in 2001 and 2003 
expire. So until we come to the time that we can actually simplify and 
make the IRS Code fairer, the last thing we ought to do is raise taxes 
on the American people.
  But the truth is that is what the new majority in Congress, elected 
last November, decided to do a month ago. The Senate passed a 5-year 
budget, with Democrats carrying the day, that effectively raises taxes, 
over the next 5 years, by over $700 billion. Unfortunately, this is the 
kind of tax increase that is the most odious and the most regrettable 
because it will not even require Members of Congress to come on the 
floor and vote for the tax increase so they can then be held 
accountable at the polls.
  Instead, what Democrats have chosen to do is to have silent tax 
increases so that when the tax relief that was passed in 2001 and 2003 
expires, we will see taxes go up higher than they ever have before at 
one time in our Nation's history.
  I guess it is not good enough that those who are in the top 40 
percent pay 99.1 percent of all income taxes, and that in 2004, the top 
10 percent paid 70.8 percent of all income tax--an increase from their 
share of 48.1 percent in 1979.
  Instead, Democrats in Congress want to see everybody end up paying 
more. If this trend continues--in a perverse way, the only way 
Democrats will be able to pay for their plans to grow the Federal 
Government is for the rich to grow richer.
  Instead of raising taxes, we should make the President's tax relief 
passed by a majority of Congress a permanent part of the IRS Code. If 
Congress fails to make the tax relief permanent that has been the 
driving force in the economy, helping to create 7.9 million new jobs 
since August 2003--if Congress fails to make this tax relief permanent, 
a family of 4 making $65,000 a year would see their tax bill increase 
by 58 percent. Small businesses that file as individuals would see 
their taxes increase by 13 percent. Things such as the $1,000 child 
tax, relief from the marriage tax penalty, and the new low 10-percent 
tax bracket put money back into the pockets of working parents, while 
small business expensing and dividend and capital gains tax relief have 
helped America's entrepreneurs expand their businesses and create jobs.
  Then there is perhaps the ugliest tax of all, which is the death tax. 
This is double taxation, because we all know we pay taxes on income as 
earned. But the death tax, set to rear its ugly head in 2011, will hit 
family businesses, farmers, and ranchers alike, forcing many to sell 
their farm to pay the IRS. Death should not be a taxable event.
  The numbers speak for themselves in terms of the progrowth, low-tax 
policies: 21 consecutive quarters of growth, unemployment at historic 
lows--4.4 percent--and 7.9 million new jobs over the past 3\1/2\ years.
  We should remember the words of former Chief Justice John Marshall, 
who said:

       The power to tax is the power to destroy.

  The last thing we should do is to destroy this great economy, which 
is literally the goose that has laid all of the golden eggs.
  Mr. President, I yield the floor and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent to speak as in 
morning business for 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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