[Congressional Record (Bound Edition), Volume 154 (2008), Part 5]
[Senate]
[Pages 5937-5940]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                TAX DAY

  Mr. BOND. Mr. President, today millions of Americans are reminded 
about Ben Franklin's poignant observation: Nothing is certain but death 
and taxes.
  Today families across the Nation are being forced to tighten their 
belts as the Federal Government takes more and more of their hard-
earned money. For working families, the tax bill that comes due every 
April 15 is often a tremendous burden. In fact, the average American 
pays more in taxes than it spends on food, shelter, clothing, and 
transportation combined.
  For American families, tax day is a real eye opener. This year, 
families will work the first 113 days of the year to pay their Federal, 
State, and local taxes. Unfortunately, this year tax day has come 
around when families are facing spiking energy, housing, and health 
care costs, runaway college tuition, and high rising prices for 
consumer goods.
  While the Senate has acted to help these families in the short term, 
the stimulus and housing relief bills, a long-term fix is a long way 
off and badly needed. We should support long-term economic growth 
policies that lower taxes, create more jobs, and grow our American 
economy.
  Our distinguished minority leader, the Senator from Kentucky, Mr. 
McConnell, has outlined the dangers of going back to a high-tax era. We 
all know that the tax reductions adopted by Congress in 2003 which gave 
relief for capital gains taxes encouraged more small businesses to 
invest, gave them the resources to grow, and small businesses are the 
dynamic engine of this country.
  That tax relief provided some 8.4 million new jobs. But as Senator 
McConnell said, my friends on the other side of the aisle have proposed 
a budget that includes the largest tax increase in American history and 
would raise taxes on every American taxpayer by doing nothing, 
intentionally doing nothing.
  The plan of the Democrats raises taxes on the average American family 
by $2,300 a year. A $2,300 increase in taxes will be a devastating hit 
to American families. For families in Missouri and across the Nation, 
this is $2,300 they will no longer be able to use to buy groceries, put 
gas in their car, pay tuition, or purchase prescription drugs. And, as 
Senator McConnell pointed out, there will be an even larger tax 
increase on small businesses--small businesses that we expect to create 
the new jobs we will continue to need as our economy and technology 
evolves.
  Unfortunately, not only are taxes getting higher, they are getting 
more complicated. According to the President's panel on tax reform, 
there have been more than 14,000 changes to the Tax Code since 1986. 
With all of these changes, it is no wonder that the average time burden 
for all taxpayers filing a 1040 is 30 hours, and now more than 6 in 10 
Americans hire someone to help prepare their returns every year.
  So in addition to taking 113 days in wages, the Federal Government 
requires you to spend an initial day and even more money to hire a 
professional to make sense of what you owe. It is a daunting task for 
anyone, particularly if they have a family and business activities to 
make sense of what they owe.
  In January, I introduced a radical solution, and I think the time has 
come for a radical solution to bring some common sense to this process. 
My bill, the Fair and Simple Tax Act, will simplify the Tax Code and 
help American families keep more of their paychecks. It will get rid of 
the AMT and the double calculations middle-income taxpayers must make. 
It will eliminate higher tax rates, get rid of the myriad targeted 
reductions, credit givebacks, phase-ins, phase-outs, and other special 
interest provisions.
  The Fair and Simple Tax Act will provide a simpler, lower, flat 
income tax option, as well as offer historic tax relief for families 
and businesses to create jobs for American workers.
  This bill will reduce the tax rate on families and the employers who 
create jobs, make permanent existing tax relief, keep current 
deductions for home mortgage interest and charitable deductions, but 
give Americans more control over their health care by providing tax 
relief to individuals and families who do not now have access to 
employer-provided health care.
  Also, my bill will eliminate the death tax which is a significant 
burden for farmers and small businesses.
  The best fiscal policy is economic growth, job creation, and keeping 
taxes low for middle-class families. And the best economic or fiscal 
policy is also the best social policy. There is no better policy than 
assuring a good-paying job for hard-working Americans.
  The last thing our economy needs right now is a tax increase, which 
is what Americans will receive when the 2001 and 2003 tax cuts expire. 
And you know what will happen. It will not only be a tax increase on 
individual families; by increasing significantly taxes on small 
business, it is going to curb job growth, it is going to cut the 
ability of people to find a job.
  Let me be clear. Unless we stop this looming tax hike, which would be 
the largest in history, more than 2 million Missouri families will face 
higher tax bills. My bill would prevent the family-budget-killing tax 
hikes. My bill would simplify the tax rate for millions of Americans. 
My bill would mean tax relief and real money back into the pockets of 
American families.
  Let's get real about taxes and bring back some common sense to a Tax 
Code that is too complex, too confusing, and too costly. This plan will 
give American taxpayers what they need: a fairer system that puts more 
of their own money back in their pocketbooks and takes off their back 
the hassle of April 15.
  I ask for the support of my colleagues in bringing a radical but 
simple commonsense reform to our Tax Code.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Wyoming.
  Mr. BARRASSO. Mr. President, 20 years ago today, Senator Malcolm 
Wallop of Wyoming came to the Senate floor to speak about the tax 
burden Americans face. He came to the floor because it was April 15, 
tax day. He came to extend his sympathies to the many, as he called it, 
``frustrated taxpayers who were probably at this minute,'' he said, 
``sweating bullets over a form 1040 while gnawing through yet another 
pencil.''
  He spoke 2 years after Congress enacted the landmark 1986 tax reform 
bill, legislation intended to reform and simplify the Code and make the 
chaos of past April 15s mere memories. That legislation did not reform 
the Tax Code, and it fell far short of tax simplification.
  Senator Wallop voted against final passage, and he knew that history 
would be on his side.
  The same day, he introduced into the Congressional Record a 1988 
guest editorial from the Casper Star Tribune, a newspaper in Wyoming. 
The editorial reflected the sentiments similar to those expressed by 
Senator Wallop. Less than 2 years after enactment of that 1986 law, tax 
reform and simplification spawned 2,704 changes in the Internal Revenue 
Code, 42 new regulations, 65 announcements, 32 revenue rulings, and 48 
new tax forms.
  The changes were so complicated that in a nationwide study of 50 tax 
preparers who were given hypothetical identical pieces of information 
about

[[Page 5938]]

what a family would do in trying to figure out their taxes, none of the 
50 tax preparers came out with the same result in terms of how much 
that family would owe. The system was that complicated.
  Senator Wallop said that guest editorial summed up the feelings of 
taxpayers across the Nation. The author of that guest editorial 
submitted 20 years ago today into the Congressional Record was a 
Wyoming physician named John Barrasso. That is right, the current 
occupant of Senator Wallop's Wyoming Senate seat.
  The reform envisioned by Congress failed miserably to achieve its 
desired result. Today, Americans continue the painful experience of 
frantically attempting to complete their tax returns and write their 
checks to the Government before the clock strikes midnight.
  The Tax Code is even longer today, 6,000 pages and over 2.8 million 
words, and it is growing. Provisions within the Code regularly expire, 
and then they are extended on an irregular basis. The IRS estimates 
that the average amount of time an American taxpayer is going to take 
to fill out their tax returns in this year is over 30 hours. More than 
6 in 10 Americans hire someone to help prepare their returns for them. 
Hundreds of billions of dollars are spent annually trying to comply 
with our complicated tax laws.
  Many post offices across America will be staying open until midnight 
tonight. Why? To give taxpayers one last shot to meet the deadline.
  It is no wonder that more than 10 million Americans will request an 
extension this year. The future does not look much better for American 
taxpayers, both in terms of tax simplification and in terms of tax 
relief.
  Americans work day in and day out to pay for Washington programs that 
they would not wish on their worst enemy. In too many families, one 
parent works to put food on the table and the other parent works to pay 
for the Washington bureaucracy.
  The Government is too big. It spends too much. Americans get it. 
Americans have to balance their own budgets. They have to balance their 
own checkbooks. The Government should do the same. And the Government 
should do it the same way that American families do it--by controlling 
spending.
  The current tax system is a mess, it is too complicated, it is 
antigrowth, and it discourages additional investment in America. The 
American taxpayer rightfully deserves a system that is simple. The 
American taxpayer deserves a system that provides certainty. The 
American taxpayer deserves a system that encourages success and 
innovation, and the American taxpayer deserves a system that is based 
on what is in their best interests and not the best interests of 
Government.
  Have you ever wondered why tax day is April 15 and not, say, 6 months 
later, October 15? Imagine, if you will, if tax day were right before 
election day. Then the voices of the taxpayers would register loudly 
and clearly. Maybe this is the solution necessary to ensure that 
people, not the Government, come first because, after all, the money 
belongs to the people, the hard-working people of Wyoming and every 
other State in this country, not to the Government. It is the people's 
money; it is not the Government's money.
  The American taxpayer deserves better, the American taxpayer deserves 
tax simplification, the American taxpayer deserves tax relief, and the 
American taxpayer deserves action.
  Change the system? Well, it is not an easy undertaking but a 
necessary one. Four criteria are necessary to make the effective 
change. It must be fair so people pay their fair share. It must be 
simple so people can quickly file their own returns. It must be 
uniform. No matter who you are, the system must be applied equally to 
every taxpayer. And, No. 4, it must be consistent. Changing the system 
every year is not good for the economy and is not good for taxpayers.
  During his floor speech on April 15, 1988, 20 years ago today, 
Wyoming Senator Malcolm Wallop said that his vote against the tax 
reform conference report, as he said, ``was one of the best things I 
have done since I have been in the Senate.'' He was right on target. 
His words have survived the test of time. Let us hope that 20 more 
years--20 more years--do not pass before we get it right.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Texas.
  Mr. CORNYN. Mr. President, how much more time remains for business on 
our side?
  The ACTING PRESIDENT pro tempore. Fourteen and a half minutes.
  Mr. CORNYN. I thank the Chair.
  Mr. President, recently, I noted a story in the Wall Street Journal 
that preceded the primary date of March 4 in Texas, and Ohio as well. 
Not to pick on our friends in Ohio by any means, but I was interested 
to see the story discussed of why it is jobs and people were leaving 
Ohio and why people were moving to Texas. We have had 3 million people 
move to Texas since 2000.
  Basically, the journalist said it boiled down to three things: He 
said, No. 1, Texas is a State that believes in free trade. We believe 
NAFTA, the North American Free Trade Agreement, has actually increased 
jobs in our State and in the United States by creating jobs for those 
goods that are manufactured here and then sold in Canada and Mexico.
  No. 2, the article pointed out Texas is a right-to-work State. In 
other words, you don't have to join a labor union in order to get a 
job. You can if you want to, but you are not required to do so as a 
condition of employment.
  No. 3, this article pointed out Texas did not have a State income 
tax, and I assure you we never will. The people in my State like 
government as small as possible. They like to keep taxes low, and they 
realize the decisions we have made in our State have made it a 
conducive environment for job creators to move to our State to create 
opportunity for people to move there, to get a job, to raise their 
family, and to seek to achieve their dreams.
  Today, we are talking about tax day for the Federal taxpayer, and I 
think we ought to learn something from the lessons we have found 
demonstrated in places such as Texas, where we have kept taxes low. 
Having lower tax rates is perhaps the best stimulus package you could 
ever pass. We have passed a couple stimulus packages so far this year. 
First, the bipartisan package, which will result in a check being 
written to many taxpayers that they will receive in the next few weeks, 
and then we also passed a housing bill last week. But I submit the best 
stimulus we could pass is by keeping taxes low.
  This first chart I have demonstrates an uncomfortable fact, and that 
is the American taxpayer has to work until April 23 of this year in 
order to pay their taxes. In other words, here we are on April 15, and 
taxpayers still have another few days, another week or so to work to 
pay their tax bill before they can begin to work for themselves and for 
their families and for their small business.
  This is another revealing chart, I think, because it points out how 
many days of the year an individual works, or the average taxpayer 
works, to pay for essentials such as housing, which is very much a part 
of our agenda recently because of the housing crunch; health care, 
health care costs are a significant portion of every family's budget, 
and the average taxpayer works 50 days a year to pay for their health 
care; food, equating to 35 days; and transportation, 29 days. As you 
can see, to pay Federal taxes, an individual has to work 74 days; to 
pay the State, local, and other taxes, it is another 39 days.
  Particularly at a time when the economy is not doing as well as we 
would like, Congress seems to be acting inconsistently, first of all, 
in passing a stimulus package which is sending checks to taxpayers 
because we are worried taxpayers don't have enough money to spend to 
help stimulate the economy. Yet at the same time, both the House of 
Representatives and this body passed a budget that raises taxes, 
imposing almost $2,400 more in taxes onto my constituents in Texas.
  Now, it may not seem like a lot of money to some here in Washington, 
but I can assure you that to many of

[[Page 5939]]

my constituents, this is real money and money they would prefer to have 
to invest in their businesses and spend according to their own desires 
rather than to have Uncle Sam tap them for an additional $2,400.
  I would also note this has an antistimulus effect--raising taxes--and 
is inconsistent with what we are doing with regard to trying to get 
more money in the hands of the American people to help us boost and 
stimulate the economy. To turn around and impose an additional almost 
$2,400 per person in taxes is inconsistent, to say the least, and is 
antistimulus.
  The Heritage Foundation has estimated that if in fact this tax 
increase goes into effect--the one contemplated by the 2009 budget--
more than 70,000 Texans will likely lose their jobs because the budget 
assumes higher taxes, which will harm job creation and reduce economic 
output.
  I know there is a lot of revisionist history in Washington about what 
the last 5 or 6 years has been like in terms of the economy, but the 
fact of the matter is the economy has been very good, by and large. At 
least 8 million constituents of mine in Texas benefitted from the tax 
relief we have passed since 2001. I would note, roughly, that same 
number of new jobs was created across the country--roughly 9 million 
new jobs--since the tax relief we passed in 2003. In 2007, at least 6.9 
million Texans benefitted from the new low 10-percent tax bracket 
created back in 2001, and more than 2 million Texas families used the 
$1,000 child tax credit, all of which are timed to expire in 2011, 
unless Congress acts to make that tax relief permanent.
  If there is one thing we could do that would have the surest impact 
of bolstering the economy, giving people more money to spend as they 
see fit, it would be to make the tax relief permanent--the relief that 
was made temporary back in 2001 and 2003. The dividends and the capital 
gains reductions we passed in 2003 will also expire as well. These, of 
course, most often impact people when they buy and sell things they 
own--when they buy stock in their retirement plans, the dividends tax 
relief in particular. We are going to see that increase dramatically, 
unless Congress acts to stop the antistimulative effect I mentioned a 
moment ago.
  Today, of course, as I said, is an important day for every American, 
but it is certainly not a day for celebrating. This is not a holiday 
for most Americans. Today is a day of observance that is mandated by 
the Federal Government and an observance which is universally dreaded 
by the American people--tax day. One of the biggest reasons people hate 
tax day is because it reminds them of the complex, incomprehensible 
system through which a faraway agency, known as the Internal Revenue 
Service, sends them a pile of forms they have to navigate to figure out 
how much they owe the Federal Government.
  They may ask: Do I get a W-2 or a 
W-4? Can I fill out the 1040EZ or should I get the schedule D form? Do 
I fill out the 1099 miscellaneous and the 1099 dividend form? What is 
form 5498 for or 1065 or 4562?
  Well, you get my point, hopefully. Our tax laws continue to 
proliferate and become increasingly complex and increasingly 
incomprehensible to most Americans. That is why so much money is spent 
by average Americans getting someone else to help them figure out how 
to comply with the law. The only thing going down is our comprehension 
and our understanding of the tax system; all other costs associated 
with this unnecessarily complex and impenetrable system are going up.
  Families and entrepreneurs, as I said, spend a lot of money--billions 
of dollars--and thousands of hours each year trying to figure out how 
to do the right thing and how to comply with the Internal Revenue Code. 
In fact, they will spend more than 6 billion hours complying with the 
Federal income Tax Code, with an estimated compliance cost of more than 
$265 billion. This has more than doubled since the mid-1990s. Estimates 
are it will continue to increase at an even faster rate.
  Every year, the National Taxpayer Advocate highlights this complexity 
in one way or another as one of the top 10 problems taxpayers face. We 
know the Tax Code is full of special interest loopholes and that with 
each year the American taxpayer spends more and more time and more and 
more money to try to figure out how to comply with its burdensome 
provisions. Taxpayers, as I indicate, are working longer each year to 
pay for Government--a total of 113 days this year. I think most 
American taxpayers, if you asked them the question: Do you like the 
system as it exists now or would you like tax reform, something 
simpler, flatter or fairer? they would say: Whatever our Tax Code, 
whether it be a flat tax, a sales tax or an income tax, it should be 
based on three fundamental ideas: simplicity, fairness, and 
transparency.
  I have to tell you our Tax Code does not, as currently written, meet 
any of those three requirements--of simplicity, fairness or 
transparency. I think these simple standards ought to guide us in 
reforming and simplifying the income tax code. I have heard several 
proposals made in the last couple days. Senator Wyden, from Oregon, has 
talked about a flat tax he has proposed. Senator Alexander, from 
Tennessee, likewise has proposed a tax return you could fill out in one 
page. Wouldn't that be great, to have a single page, something so easy 
to understand you could send in a single sheet of paper and know you 
have complied with your obligations to pay and report your income taxes 
due?
  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 by letting the tax relief passed by Congress in 2001 and 
2003 expire. I have already talked about the budget and its impact on 
people in my State, but the budget passed last month would now require 
27 million small businesses all across the country to owe an additional 
$4,100. That is, if, in fact, the revenue projections in that budget 
are kept, 43 million families will owe an extra $2,300 each, and 18 
million seniors will each owe an additional $2,200.
  Amazingly, these tax hikes and increased Federal spending come weeks, 
as I pointed out, after Congress actually voted to send money back to 
the taxpayers in order to get them to spend it so it would stimulate 
the economy. We did this at the same time we are raising taxes and 
basically taking that same money away and more. If we agree that 
putting more money in the pockets of the American people is the best 
way to stimulate the economy, why are we still looking to take more 
money from them during tax season?
  One of the most effective tools for combating this and wasteful 
spending, in general, is more information, and I think a proposal I 
made yesterday, which I would talk like to talk briefly about, will 
actually help us hold the Federal Government more accountable for the 
money it spends and give the American taxpayers more information so 
they can make sure their voice is heard when it comes to tax policy and 
how much money we take out of their pockets in order to fund the 
Federal Government.
  Yesterday, I introduced a bill called the Federal Spending and 
Taxpayer Accessibility Act of 2008. This bill creates an online earmark 
tracking system taxpayers can use free of charge to search for earmarks 
by recipient, appropriations bill, State, and Member in real time 
during the appropriations process. This legislation also directs the 
IRS to provide each taxpayer with a concise and easy-to-read personal 
record of the amount of taxes they have already paid, as well as a 
projection of the taxes they will owe into the future, up until the 
time they retire. If this sounds familiar, that is because the Social 
Security Administration sends a similar statement of Social Security 
taxes paid and how much you can expect, upon retirement, to receive in 
benefits. I think it can play an important role when taxpayers are 
planning their future, to provide them with a better idea of how much 
they will owe in the future so they can take that into account.
  These statements would provide taxpayers with a reminder of how much 
our Government is spending and give

[[Page 5940]]

them even more reason to keep track of how their money is spent, along 
with the political accountability that would flow from that. This 
legislation would also build on the Federal Funding Accountability and 
Transparency Act of 2006, which created a one-stop, searchable Web site 
for all Federal contracts and grants. This legislation would expand the 
Web site by including the expenditures of all Federal agencies, 
including salaries, rent, supplies, and transportation. I know not 
every American is going to be interested in that level of detail, but I 
think it is important it be made available to everyone who is 
interested and particularly for the press who can report on it and let 
the American people know what the facts are.
  On this tax day, I urge our colleagues in the Senate to take a new 
stand against growing Government, growing spending, and growing taxes.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The majority whip is recognized.

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