[Congressional Record (Bound Edition), Volume 154 (2008), Part 4]
[Senate]
[Pages 5844-5845]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               TAX REFORM

  Mr. WYDEN. Mr. President, for the next 33 hours, millions of 
Americans will face mindless, relentless, needless tax torture trying 
to shovel their way out from under an avalanche of bureaucratic forms 
as they struggle to complete their taxes.
  Citizens Against Government Waste has calculated that Americans spend 
4.3 billion hours each year filing their tax returns and complying with 
our tax laws. That is a lot of time to spend on something that is about 
as interesting as prolonged root canal work.
  My guess is many Americans would rather read the phonebook than our 
Tax Code, and the phonebook is actually a lot shorter. So I am going to 
give one example of the heavy reading Americans have in front of us 
over the next 33 hours.
  The alternative minimum tax, of course, is a killer tax for millions 
of Americans. It calculates taxable income differently than the regular 
tax. It adds a whole new layer of complexity to the Code and headache 
for our citizens. So I am going to read one of the portions of the AMT 
rules that clobber our middle-class taxpayers, and it is the one that 
is used to calculate the size of the interest deduction middle-income 
folks are allowed in our country.
  Under section (C), it reads:

       In determining the amount allowable as a deduction for 
     interest, subsections (d) and (h) of section 163 shall apply, 
     except that--
       (i) in lieu of the exception under section 163(h)(2)(D), 
     the term ``personal interest'' shall not include any 
     qualified housing interest (as defined in subsection (e)),
       (ii) sections 163(d)(6) and 163(h)(5) (relating to phase-
     ins) shall not apply,
       (iii) interest on any specified private activity bond (and 
     any amount treated as interest on a specified private 
     activity bond on under section 57(a)(5)(B), and any deduction 
     referred to in section 57(a)(5)(A), shall be treated as 
     includible in gross income (or as deductible) for purposes of 
     applying section 163(d),
       (iv) in lieu of the exception under section 
     163(d)(3)(B)(i), the term ``investment interest'' shall not 
     include any qualified housing interest (as defined in 
     subsection (e)), and
       (v) the adjustments of this section and sections 57 and 58 
     shall apply in determining net investment income under 
     section 163(d).

  It is obvious to all who are still awake at this point, since I have 
gone through just one of the sections, this is not exactly clarity in 
American Government. I cannot find anybody who can get through this. I 
would go through it again, but I only have 10 minutes since our friend, 
Senator Cornyn, is here for his remarks.
  These words were actually written by a human being. The only thing 
more bizarre than the fact somebody thought they made sense was the 
language was then made law by another group called the Congress. So 
there is a reason the dictionary definition of the adjective ``taxing'' 
means ``wearingly burdensome.''
  This burden is especially hard on small businesses. Small businesses 
are the engine that keeps our country going, but it is amazing they can 
move at all under the weight of what the Tax Code subjects them to.
  The National Association of the Self-Employed is today releasing 
results of a survey of their members that shows what the 45 million 
small businesses and self-employed persons are going through with their 
taxes.
  The group's survey, for example, found that almost one in five people 
who had gone to the IRS to get answers to their tax questions got 
conflicting responses, sometimes even from the same office.
  The time small businesses waste complying with the tax laws is mind-
boggling. Thirty-one percent of them recently said they spent 20 
percent or more of their time every week on paperwork and other tax-
related preparations. That is 1 day a week totally lost to tax 
preparation. That is a huge penalty that is being imposed on small

[[Page 5845]]

business for complying with the rules of the IRS.
  Another group suffering with our Tax Code is our older people. During 
the 2004 tax year, the IRS mailed 200,000 error notices to older 
Americans who miscalculated their taxes. Mr. President, 34,000 went to 
taxpayers who received the same notice in 2 tax years; 10,000 went to 
taxpayers who received it in 3 tax years.
  What does all this tell you? It tells you the IRS cannot make their 
explanations understandable to the Nation's older people.
  There was one word that kept coming up in this survey over and over. 
The people surveyed said: You have to simplify the Code, simplify our 
tax system.
  That is what I am trying to do with the legislation I have introduced 
as a Member of the Senate Finance Committee. It is called the Fair Flat 
Tax Act, and it eases the burden on our taxpayers by offering them a 
simplified 1040 Form. Instead of this kind of mumbo-jumbo, it is 1 
page, 30 lines for every individual taxpayer. The folks over at Money 
magazine, the financial publication, took the one-page 1040 form in the 
fair flat tax, and they could fill out their taxes in just 15 minutes.
  The legislation makes our code flatter. It collapses the current 
system of six individual tax brackets down to three. The fair flat tax 
eliminates scores and scores of special interest tax breaks. The 
revenue derived from these changes is used to hold down the rates for 
everybody and keep progressivity. More importantly, with the fair flat 
tax everybody in America has a chance to get ahead. There is a new 
opportunity with this legislation to promote economic growth, to grow 
the American economic pie, which is especially important during these 
times of great economic uncertainty.
  One last point. For all of us on the Finance Committee--and I think 
Senators of both parties understand this--there is a Tax Code meltdown 
coming. The child tax credit ends in 2010, the marriage penalty roars 
back in 2011, and it comes back harsher than ever. The same meltdown is 
going to hit other income taxes--capital gains, dividend taxes--and if 
Congress doesn't come up with a thoughtful and responsible bipartisan 
solution, there is going to be new chaos in the world of taxes.
  I have tried this afternoon to be a little bit lighthearted in 
discussing what is certainly a pretty dry topic for most Americans. But 
when you look at what they are going through tonight, if you are middle 
class and you are dealing with AMT, this is obviously not a laughing 
matter. The people of this country need tax reform, and they need it 
now. The fair flat tax would make our system simpler, fairer, and more 
progrowth. It makes sense for individuals, for families, and the 
businesses of our country. The Congress cannot any longer ignore the 
tax meltdown that is coming. It is time to fix the broken American tax 
system and eliminate this kind of needless suffering that so many of 
our citizens are going to endure over the next 33 hours.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Texas.
  Mr. CORNYN. Mr. President, I ask unanimous consent to speak for up to 
15 minutes.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. CORNYN. I thank the Chair.
  (The remarks of Mr. Cornyn pertaining to the introduction of S. 2852 
are located in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')

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