[Congressional Record (Bound Edition), Volume 159 (2013), Part 4]
[House]
[Pages 5560-5563]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            REAL TAX REFORM

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2013, the gentleman from Oklahoma (Mr. Lankford) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. LANKFORD. Mr. Speaker, this is a conversation about something 
that's very pertinent to all Americans right now, and that is their 
taxes. Obviously, this is tax week, which was punctuated by an 
incredibly difficult day in Boston.
  But this is also tax freedom day that's happening April 18. It's a 
recognition that if Americans worked their entire year they could get 
to this point. For many areas of the country, this would be the day 
they're finally paying into their own family, rather than paying into 
the Federal Government or the State and local Treasury.
  Now, that differs from area to area, but this shows, again, the 
significance of what it really means to get to a

[[Page 5561]]

point like this where we have to look again at our Tax Code.
  Today is the day just to be able to pause and say: Where are we with 
our Tax Code, and where are we with our budget?
  Let me just highlight a couple of things. Then I have several 
colleagues that I want to get a chance to yield the floor to to get a 
chance to continue this conversation.
  There's a lot of conversation about our budget, rightfully so. We're 
over $1 trillion overspending this year, the same as we did the year 
before, the year before, and the year before. Now, for the fifth year 
in a row something has happened that's never happened ever in American 
history. We've overspent the budget by $1 trillion.
  Let me set aside something else, though, for people to be able to 
look at, and that is, this year, in the Federal Treasury, we will 
receive the highest amount of tax revenue ever in the history of the 
United States Treasury. Make sure no one misses that. We'll receive 
more revenue this year than we ever have in the history of the United 
States Government. Yet, we're still overspending $1 trillion.
  We have serious budget issues, but they're not tax revenue as far as 
how much is coming in issues; it's overspending. But our issue with 
taxes is not the issue of the tax rate not necessarily having enough. 
It's the issue of how we do it.
  It's such a convoluted mess to be able to go through our thousands 
and thousands of pages of Tax Code. We need to stop and be able to 
evaluate this: Is this really the right way to do it?
  The purpose of tax action is to tax the smallest amount possible to 
run an efficient government. Is that really what we're doing in our Tax 
Code right now?
  Is it a simple system that people can actually do? If so, why do 
people spend billions of dollars across America, and millions of hours, 
trying to fill out tax forms, and to be able to get it in on time in a 
way that's so complicated that when you turn it in, no one thinks that 
they actually turned it in correctly. No one.
  So the challenge of this is, how can we get to real tax reform to be 
able to solve many of the tax issues, to be able to benefit our Nation 
and what happens in the days ahead, and especially for our businesses 
that need so much help and would like to have the relief of the burden 
that they have to go through all this convoluted tax policy.
  Let me introduce one of my dear friends. This is Tom Reed from New 
York. He's a member of the Ways and Means Committee. They live and 
breathe and function with the Tax Code, and he is one of the leaders of 
trying to walk through the process of reforming this code.
  Mr. REED. Mr. Speaker, I thank my colleague from Oklahoma for 
organizing this important topic and this conversation tonight.
  Mr. Speaker, I believe in an America that is fair. I believe in an 
America where the rules are simple, so that hardworking taxpayers in 
America understand what those rules are, and they're not subject to the 
jeopardy of violating the rules because they're too complicated.

                              {time}  1350

  I believe in an America where it's not judging a person by whom they 
know but, rather, who they are. And, Mr. Speaker, why I start my 
conversation with those beliefs is because we need to apply those 
beliefs to getting rid of this broken, complicated Tax Code that we 
have in America. What we have is a Code that is not simple, that is not 
fair, that is way too complicated. That's why I believe in going 
through commonsense tax reform for the purposes of coming up with a 
simple, fair, and reasonable Tax Code so that people can fill out their 
own taxes.
  As my colleague from Oklahoma rightfully points out, people are 
spending billions of dollars on tax preparers, third parties, and 
millions of hours--that can otherwise go to their businesses or to 
their families--to fill out a tax return that they can't understand 
because the rules are too complicated.
  Also, we have to end what we came here to Washington, D.C., to do, my 
colleague from Oklahoma and myself of this freshman class in November, 
2010, and that is having our country under the control of the special 
interests and creating those loopholes in the Tax Code that go to 
narrowly tailored people because of whom they know.
  We want a Tax Code, I want a Tax Code, and I know my colleagues on 
the Ways and Means Committee want a Tax Code that promotes growth, that 
promotes economic opportunity, that promotes the opportunity for us to 
be competitive on the world stage. Because when America competes on a 
world stage in a competitive market, we win. We have the best workers. 
We have the best technology. We have freedom. We have the rule of law. 
We need to do commonsense tax reform for the purposes of putting us in 
a position where we can create the jobs today and for generations to 
come, because we will then create a fair, level playing field that 
allows us to start building things in America, allows us to put people 
to work for generations to come.
  So I appreciate my good friend from Oklahoma bringing this issue to 
the forefront and having this conversation tonight, and I know he's 
bringing forth a copy of the Code and the regulations. And all you have 
to do is look at that colossal piece of paper, or reams of papers, 
books of papers, 70,000 pages of statutory tax and regulation. We in 
America can do better. We as House Republicans demand us to do better. 
And we will do better under the leadership that House Republicans are 
doing in the Ways and Means Committee and as a Conference to make sure 
that we end up with a Code that is simple, fair, and no longer riddled 
with loopholes, big government handouts, big government subsidies. 
That's the principle of tax reform for the Republican side of the 
aisle.
  Mr. LANKFORD. Thank you for those words of encouragement, because 
that is what we're all about.
  As simple as this is, everyone would look at this Tax Code, the few 
notes that I brought with me to be able to reference where we really 
are on tax policy now, and see how large this has really become.
  When we look at our tax policy, we say, How did it become this? It 
became this because we've added one new rule after another after 
another as it's gone through. Just since 2001, there have been 3,250 
changes to the Tax Code. That's more than one per day. And they 
continue to rack up. And every business and every American has to try 
to rush to keep up with all this Tax Code, which leads to the problem 
of, How do I know that I actually filled it out correctly and completed 
all this? For many people, there is that sense that I didn't get a 
chance to write anything off as deductions but there are other people 
that know how to get out of this.
  In this constant fight to say how do we fix this, first, we have to 
get to some basic definitions. One is, What does it mean to reform the 
Tax Code? Reforming the Tax Code seems to be a simple thing. That means 
we're going to fix it to make it simpler; we're going to make it more 
fair; we're going to make it more straightforward.
  There are some that try to define reforming the Tax Code as a new way 
to be able to raise taxes on other people, to be able to take away this 
deduction or that loophole and find ways to keep this same convoluted, 
crony system of Tax Code, but we're going to find some way through it 
to be able to raise taxes on different groups of people. And so we 
accomplish more revenue by raising taxes rather than by fixing the 
system.
  Again, I go back to we have the highest amount of revenue ever in the 
history of the Nation. This is not a tax revenue problem of how much is 
coming in. We have a serious spending problem. But we do have a Tax 
Code problem, as well, that forces businesses to overspend for tax 
preparation when they should be taking care of customers and clients 
and their employees.
  We can do better than all of this. We can do better, and we should. 
Again, there's this sense that within the Tax Code that, if we just 
create a couple more things, that we can fix the Tax Code, or maybe if 
we just raise rates on people, that will get in more revenue.

[[Page 5562]]

  Let me tell you a quick story. My daughters at their school several 
years ago had a project between the fifth graders and the first 
graders. As they studied through American history, the fifth graders 
and the first graders both got to the American Revolution at the same 
time; obviously, at different levels of interest and different depth on 
the topic. But as they studied through the American Revolution, the 
fifth graders, at some point, would take the role of the British and 
the first graders would be the patriots, the Americans, the 
revolutionaries.
  Actually, the week before, I got a note, as a parent, saying, You 
need to send 100 pennies with your first graders for next week's class. 
And all it was was just a note saying every first grader needs 100 
pennies to come. And so I sent my first grader off to school that next 
week with 100 pennies in her little sack. She didn't know why.
  They began studying the American Revolution, and midway through the 
day, the fifth grade class barges into class and says, There is now a 
tax on sharpening your pencil, and they would impose a one penny tax on 
sharpening your pencil. If you go to lunch, you also have to pay 
another penny to leave the classroom if you go to lunch. There's a one 
penny tax to get a piece of Kleenex as well. They just declared it, and 
they would come in. Several times throughout the course of the day, 
they would just pop in and start collecting their tax from people. 
Well, on Tuesday, they came in and they doubled their tax. It's now 2 
cents to sharpen your pencil, it's 2 cents to get a Kleenex, and its 2 
cents to head to lunch. And so on Wednesday, it comes again and they 
add new things again to it.
  So by Wednesday night, do you know what my first grader did? My first 
grader, Wednesday night, came home and said, Dad, I need to take 10 
sharpened pencils with me tomorrow to school. I said, Why do you need 
10 sharpened pencils? She said, Because the tax is so high on 
sharpening pencils, I'm going to take sharpened pencils with me to 
school so I won't have to pay the tax to sharpen my pencil at school. I 
laughed and I said, My first grader knows how to avoid taxes. My first 
grader knows how to do this.
  Some perception that, if we just raise rates on people, a lot more 
tax money is going to come in is foolish, based on a basic value of, 
when we know it's unfair, we'll find a way to get out from under it. If 
we had a simple, fair, clean, straightforward tax system, we would not 
fight with this, and we would actually receive in the revenue that we 
should receive in as a Nation.
  A nation does not need tax revenue. We need to be efficient, we need 
to be fair, and we need to be straightforward. We can do this, and we 
should do this.
  I'd like to take just a brief moment to be able to recognize another 
one of my colleagues from North Carolina. This colleague has a 
different topic than tax reform, but it's really important this week 
because a mutual person that we have great respect for that he knows 
personally, as well, is due of honor in this week of all weeks.
  So with that, I'd like to recognize my colleague from North Carolina 
(Mr. McHenry).


                      honoring george beverly shea

  Mr. McHENRY. I thank my colleague. I appreciate his leadership both 
with the policy committee and on this very important issue.
  Mr. Speaker, I rise today to honor America's most beloved gospel 
singer. According to the Guinness Book of World Records, he holds the 
world record for singing in person to more people than anyone in human 
history, to a cumulative total of a live audience of 220 million 
people.
  Mr. Speaker, I am rising to recognize George Beverly Shea, who passed 
away 2 days ago at the age of 104. ``Bev,'' as he was affectionately 
known, began singing with Reverend Billy Graham in 1943. In the 
following years, he would travel to every State in the Union and to 
nearly every continent on the globe to spread the gospel.
  He was inducted to the Religious Broadcasters Hall of Fame in 
February of 1996, and was also inducted into the inaugural class of the 
Conference of Southern Baptist Evangelists ``Hall of Faith'' in 2008.

                              {time}  1400

  From a recent visit with him, I can tell you that such awards weren't 
the most important things to him in life. As I visited Bev, it was a 
beautiful day in the summer in the town of Montreat in western North 
Carolina. He lived right down the hill from Dr. Graham. He wanted to be 
close to his friend, and that's where he chose to live.
  But as I noticed his pictures of his grandchildren, behind those 
pictures of his family I noticed a Grammy Award. It was a Lifetime 
Achievement Grammy Award given to him in 2010. That was behind his 
family pictures. Very interesting, beautiful statement from a wonderful 
person. It was in the Wilshire Theatre back in 2010 when he was given 
that Lifetime Achievement Award, and he was with the likes of Dolly 
Parton and even the Ramones. So it showed that he thought family was 
most important.
  Despite his worldwide fame though, friends and residents of his town 
of Montreat knew him as a person who was deeply faithful to his Lord 
and Savior and showed many good deeds and great kindnesses throughout 
the community. He even had a tradition. Though he was known around the 
globe, he still took the time every year to sing ``Happy Birthday'' to 
the mayor of his small town of Montreat. What a special gentleman. What 
a special American. What a special Christian and man of faith.
  While friends and fans from around the world and Christians from 
around the world know him from his renditions of ``How Great Thou Art'' 
and the ``Wonder of It All,'' he will always be remembered by friends 
and family in Montreat--and beyond--as one of the most humble and 
gracious men that has ever been known.
  Bev Shea was 104, and leaves behind a wonderful blessing of a family.
  So with that, I thank my colleague for yielding and giving me the 
opportunity to recognize such a significant individual.
  Mr. LANKFORD. I thank the gentleman. He is a man worthy of honor and 
worthy of spending the moment to be able to stop and discuss.
  Back on tax policy--which seems a mundane topic now compared to 
George Beverly Shea and all that he has done for our Nation and the 
world--did you know that under our current system if you own a guard 
dog to protect your business or if you hold a business convention in 
Bermuda or pay for your child's clarinet lessons so that it will help 
with their overbite, you can deduct those expenses from our income tax?
  There is something morally and culturally wrong with a government 
that enables its citizens to deduct their gambling losses but punishes 
the same person by taxing the interest that they have on savings in the 
bank. Why would we as a Nation deduct gambling losses and tax interest 
savings from the bank? Shouldn't we encourage saving and maybe 
discourage, or at least be neutral, for gambling losses? That's the 
nature of this code.
  There's a section even in this code that specifically outlines that 
if you're a drug trafficker or drug dealer, you can't deduct your 
expenses from drug trafficking. That's what our code has become. We've 
got to find a way to be able to simplify the code and to make it a 
fair, straightforward code that deals with the issues and takes away 
the absurdity that's in our code.
  Let me give you another example. We have a tax system dealing with 
internal taxes. In our internal tax system, we actually tell people 
that if you're a business that's an American-owned business and you do 
business with other parts of the world, you will pay that tax rate to 
that country, which is fair, but that when you bring your money back to 
the United States, you'll also have to pay the difference in our tax 
rate. We're the only country that does that.
  So we literally tell our businesses, do business all over the world, 
function all over the world, make money all over the world, but when 
you make money over there, we'd encourage you to leave that money over 
there and not bring it back home. Because if they bring it

[[Page 5563]]

back home, they're actually punished for returning money back to the 
United States.
  Now, what does that mean to American competition and how we actually 
function in our business world? What that means is if you're a German 
company doing business in the U.K., let's say, you pay your taxes in 
the U.K. and then you return your money back to headquarters. But if 
you're an American business doing business in the U.K., you pay the 
business tax in the U.K., and then you don't return your money back to 
America, you just reinvest in your U.K. branch. Because why would you 
lose all that money coming back to the United States with it? This 
simple fix would bring back $1 trillion in private American capital 
from around the world back into the United States.
  Now, in 2009, this Congress passed an almost trillion-dollar stimulus 
bill where they took money from each other as Americans and tried to 
redistribute it to say it would fix the economy. Actually, what it did 
was it skyrocketed our debt, and we will be paying for it for 
generations. And it did not resolve our fiscal situation.
  What would it mean, instead of just taking money from Americans and 
redistributing it around and pretending we did something, what would it 
mean instead to allow private capital to move from all over the world 
from American-owned businesses to be able to come back home? It would 
be significant to us. It's one of those commonsense things that when I 
talk to people, they all nod their head and say, why don't we do that? 
I say, because of this, because it's so difficult to get through our 
Tax Code and to fix the things that are obvious.
  I've even had some people say to me, well, if those American 
companies bring their stuff back home, they'll just buy stocks or 
reinvest in their building, they'll just spend it however they want to. 
We should tell them how to spend it. I just smile and say, it's their 
money; let them spend it how they choose to spend it but allow them to 
be able to bring it home. In fact, we should encourage American-based 
companies to bring American money back home when they make it rather 
than reinvesting all over the world. It's a commonsense thing.
  It's a commonsense thing to say when you do business: no matter what 
type of business that you're in, don't discriminate. If they have 
normal business expenses, allow those normal business expenses to be 
written off and tax on the profit. It's a commonsense thing. But 
instead, our code makes it so convoluted. One business gets taxed 
different than another business and another business. No one can define 
what just basic simple business expensing is because the code is all so 
cluttered.
  Then you see in some proposals--like the President's proposal when he 
put out his budget, when he said that normal business expensing should 
be taken away from any company that does oil or gas or coal, and 
instead we should give special preferences to those that do wind and 
solar and hydro and other things. In fact, they had the audacity to 
make the statement in the Treasury Green Book, they made the statement 
that the President wants a neutral Tax Code on energy. I had to laugh. 
I said, one group of companies that actually has just normal business 
expensing--if they have a cost for a well, they're able to deduct it 
like every other business does for their basic operation--gets punished 
in this code, and other companies get triple benefits from it. That's 
not neutral; that's preferences. That's back to crony capitalism.
  Now, I've got to tell you, I'm all for all types of energy; I really 
am. I'm all for it. In my great State of Oklahoma we have geothermal; 
we have oil; we have gas; we use coal; we have wind. We've got all 
kinds of energy, and we use it all extremely well. It's a great 
solution for us. But the issue is not what do we do on what type of 
energy, it's where do we put preferences.
  The code doesn't need to become even more convoluted by saying, well, 
the administration has certain preferences on energy, and so it's going 
to make it more expensive for some types, and then we're going to give 
special crony benefits to others. That's not the way that we need to 
function.
  We need a code that is straightforward and clean and intentional, 
that we have a certain amount of money that needs to be raised to have 
basic operation of the Federal Government, and not raise more than 
that--and definitely not create a system that is even more complicated 
than what we have, when we have all of this giant code. Instead, we 
should make it more simple.
  So what do we need to do? Let's set some basic guidelines. Can we 
create a code that is fair and straightforward? Yes. So let's get 
started on that. And let's start with the basics. Let's not take this 
code and edit. Let's take a blank sheet of paper and say, how much does 
the Federal Government have to raise to efficiently operate? What is 
the best Tax Code to start that process and begin our reform not by 
tweaking this, but by fixing it?
  I know for certain if I went to any American and said, what is the 
best way to do Tax Code, no one would point to this. No one would point 
to our current Tax Code and say that's the best way to do it. We all 
get that. So let's start from there and say let's start by fixing it.

                              {time}  1410

  The second thing is let's make our Tax Code as neutral as we possibly 
can. What can we do to make it simple, neutral, straightforward, so 
that whether you're an American that makes $20,000 a year or whether 
you're an American that makes $2 million a year, you feel like it's 
fair to you, there's not some sense of somebody else gets more benefits 
than I do out of this Code. It's a simple, straightforward Code.
  So, we're going to make it neutral, we're going to make it simple, 
and we're going to try to make it as efficient as we possibly can. And 
I know the words ``efficient'' and ``Federal Government'' don't go 
together very often, but when we start a Code, we should start it as 
simple as we possibly can.
  The last time there was a major reform of the Tax Code was in the 
1980s, and it was to simplify the Code. Since that time, it has grown 
more and more and more complex again. I have every belief that if we go 
through the long process of simplifying our Code, which dramatically 
needs reform, if we will simplify our Code again, in the days ahead, 
future Congresses will make it more complicated again. That's the 
nature of government. I understand that. I'm just saying it's past time 
to do the simplification again.
  We need to have significant reform, and not reform that's defined as: 
How do we stick it to a certain group to make sure they pay more? 
Reform that's actually reform, that fixes our broken system and walks 
Americans through a process where they can pay taxes, as we all love to 
do, but can at least pay taxes in a way that they believe is fair and 
neutral and consistent from year to year.
  With that, I yield back the balance of my time.

                          ____________________