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TAX CODE TERMINATION ACT
(House of Representatives - June 17, 1998)

Text of this article available as: TXT PDF [Pages H4654-H4677] TAX CODE TERMINATION ACT Mr. BUNNING. Mr. Speaker, pursuant to House Resolution 472, I call up the bill (H.R. 3097) to terminate the Internal Revenue Code of 1986, and ask for its immediate consideration in the House. The Clerk read the title of the bill. The SPEAKER pro tempore. The bill is considered read for amendment. The text of H.R. 3097 is as follows: H.R. 3097 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Tax Code Termination Act''. SEC. 2. TERMINATION OF INTERNAL REVENUE CODE OF 1986. (a) In General.--No tax shall be imposed by the Internal Revenue Code of 1986-- (1) for any taxable year beginning after December 31, 2001, and (2) in the case of any tax not imposed on the basis of a taxable year, on any taxable event or for any period after December 31, 2001. (b) Exception.--Subsection (a) shall not apply to taxes imposed by-- (1) chapter 2 of such Code (relating to tax on self- employment income), (2) chapter 21 of such Code (relating to Federal Insurance Contributions Act), and (3) chapter 22 of such Code (relating to Railroad Retirement Tax Act). SEC. 3. NEW FEDERAL TAX SYSTEM. (a) Structure.--The Congress hereby declares that any new Federal tax system should be a simple and fair system that-- (1) applies a low rate to all Americans, (2) provides tax relief for working Americans, (3) protects the rights of taxpayers and reduces tax collection abuses, (4) eliminates the bias against savings and investment, (5) promotes economic growth and job creation, and (6) does not penalize marriage or families. (b) Timing of Implementation.--In order to ensure an easy transition and effective implementation, the Congress hereby declares that any new Federal tax system should be approved by Congress in its final form no later than July 4, 2001. The SPEAKER pro tempore. Pursuant to House Resolution 472, the amendment in the nature of a substitute printed in House Report 105-580 is adopted. [[Page H4655]] The text of the amendment in the nature of a substitute is as follows: Strike all after the enacting clause and insert the following: SECTION 1. SHORT TITLE. This Act may be cited as the ``Tax Code Termination Act''. SEC. 2. TERMINATION OF INTERNAL REVENUE CODE OF 1986. (a) In General.--No tax shall be imposed by the Internal Revenue Code of 1986-- (1) for any taxable year beginning after December 31, 2002, and (2) in the case of any tax not imposed on the basis of a taxable year, on any taxable event or for any period after December 31, 2002. (b) Exception.--Subsection (a) shall not apply to taxes imposed by-- (1) chapter 2 of such Code (relating to tax on self- employment income), (2) chapter 21 of such Code (relating to Federal Insurance Contributions Act), and (3) chapter 22 of such Code (relating to Railroad Retirement Tax Act). SEC. 3. NEW FEDERAL TAX SYSTEM. (a) Structure.--The Congress hereby declares that any new Federal tax system should be a simple and fair system that-- (1) applies a low rate to all Americans, (2) provides tax relief for working Americans, (3) protects the rights of taxpayers and reduces tax collection abuses, (4) eliminates the bias against savings and investment, (5) promotes economic growth and job creation, and (6) does not penalize marriage or families. (b) Timing of Implementation.--In order to ensure an easy transition and effective implementation, the Congress hereby declares that any new Federal tax system should be approved by Congress in its final form no later than July 4, 2002. The SPEAKER pro tempore. The gentleman from Kentucky (Mr. Bunning) and the gentleman from New York (Mr. Rangel) each will control 1 hour. The Chair recognizes the gentleman from Kentucky (Mr. Bunning). General Leave Mr. BUNNING. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and include extraneous material on H.R. 3097. The SPEAKER pro tempore. Is there objection to the request of the gentleman from Kentucky? There was no objection. Mr. BUNNING. Mr. Speaker, I yield myself such time as I may consume to open the debate on this bill. Mr. Speaker, the Federal income tax system is broken beyond repair. We cannot tinker with it any longer and make it work any better. We need to wholesale reform and totally overhaul the system. There are two basic elements that are absolutely necessary for a Federal tax system. It must be understandable, and it must be fair. As it now stands, our Federal income tax fails badly on both counts. Our Tax Code has become so complex that no one can understand it. When tax experts cannot agree on how much an American taxpayer owes, how can we expect the average taxpayer to understand it? This complexity is expensive. It costs over $300 billion a year for taxpayers to comply with the Tax Code. That is money that is totally wasted. It does not benefit government or increase funding for essential services. It does not benefit the private sector or create investment, develop jobs, or improve the quality of life. It is just money down the drain. It is a crime. Our Tax Code is unfair. We have focused a great deal of attention this year on the marriage penalty, but this is just one of hundreds of inequities in the existing law. Over the years, Congress has created a hodgepodge of loopholes and arcane tax incentives, most of which were well-intentioned. But when you take them altogether and weed them into a 5\1/2\ million word tax code, it creates such a mess that only the very wealthy have the ability to take advantage of them. That creates unfairness. As a result, the American people have lost confidence in their tax system. Incremental change is not enough. We have tried that. It has resulted in failure and more complexity. We need real reform, a total overhaul of the Tax Code. We need to restore that confidence. That is what this bill is all about. It simply says that the sun will set on the Internal Revenue Code as we know it on December 31, 2002. It gives Congress 3 years to debate and develop a new tax system. It would simply force Congress to do in a timely manner what we need, no, what needs to be done, to pull the Federal income tax code out by its roots and replace it with an income tax system that is fair and understandable. This bill will help us do that. I urge my colleagues to support and vote for H.R. 3097. Mr. Speaker, I reserve the balance of my time. Mr. RANGEL. Mr. Speaker, I yield myself as much time as I may consume. (Mr. RANGEL asked and was given permission to revise and extend his remarks.) Mr. RANGEL. Mr. Speaker, this is a historic moment in the history because of our Congress, because I do not think that we will ever live to see a more irresponsible act committed by any Member of Congress. I know that this is an election year and so some leeway has to be given to the majority because, unfortunately, there is no institutional memory of them having passed any legislation this year. Being a politician myself, I can understand how they would like to capture the voters' imagination by doing something dramatic. But just to abolish the Tax Code, just to say that, by the year 2002, no tax shall be imposed by the Internal Revenue code, what a gift to give the American people. You will not have to pay any taxes until the Republicans, and do not laugh, until the Republican majority comes up with an idea as to how they are going to replace it. Let us think this one out. Who has been in charge for the last 3 years? Who had the majority? Who had the opportunity, really, to substitute this complex mess that they talk about? But rather than to come together, as if that is possible, with some type of a meaningful, fair tax code that would increase economic productivity for our great Nation and to continue to propel the prosperity that President Clinton has brought to us, they would rather just pull up the Tax Code by the roots. I assume that, while they are pulling it up by the roots, that this 800 pages of what they call a tax bill last year is mere fertilizer for the Tax Code that they are going to bring to us. Where are these great ideas that you have? Should the American people not have some idea as to where do you meet to come up with a new code? Years ago, Members would go to the Committee on Ways and Means. Now we go to the Committee on Rules. We have people just telling us what they are going to end, but no one is there to tell us what they are going to start. I have served on the Committee on Ways and Means for two decades. Every year, we had a tax bill; some good, some bad. For the last 3 years, we have not had anything that is coming up that is new. I want the Republicans to understand this, if they do not understand anything at all, they are in charge. They have a majority. They have the ability to call their troops together and vote for anything that they want, whether it is good or, in most cases, bad. But for God's sake, just with all due intention I did not bring the Bible, so I did not mean to say that, but for goodness sake, do not end something unless you tell the American people what do you intend to replace it with. We have business people that are planning now for the future. I would want them to call their Congressman, but since this issue is not being dealt with with the Congress, and since we do not know where the Tax Code is going to come from, and since the Committee on Ways and Means has lost jurisdiction, whoever meets with the Speaker should know what he is going to come up with. I would say, if people are planning for the future, whether they are going to have bonds out there, whether the States are going to have municipal bonds, where people want to know how to plan, call the Speaker, because I think he has some good ideas that he will not share with us. Second, if you are a hospital, church, synagogue, charitable organization, there is nothing in this bill that terminates that says you are going to be protected. I know the Republicans are going to protect them, so do not be afraid, but ask them how are they going to be protected. If we own a home and we have mortgage payments and we have been deducting them, we can deduct until the year 2000, and then we do not have to deduct anymore. [[Page H4656]] {time} 1245 Now, I do not know what happens, but we can call the Speaker and he will tell us what plans he has for mortgage deductions. And I tell my colleagues that, as complicated as this bill is, as bad as the Republican passed tax bill is, at least we know what we got. The fear is what are they going to come up with when for 3 years they have not even come up with a good idea. So I do hope that in the course of this debate that someone would come up with some kind of a plan that would give us some idea as to what they are going to fill this vacuum with. But I think killing the IRS, pulling it up by the roots, that the American people deserve better than just a bumper sticker. And if people do not like paying taxes and they think this is the solution, then I beg the Democrats in the minority, if they can just pass a law to keep us from paying taxes, why can we not pass a law to stop people from paying their debts? Why not? And if we do not like that, let us pass a law to terminate cancer. Let us think of something more exciting than our irresponsible brothers and sisters over here, and we will just say that if anyone votes against it, it means they support cancer; if they vote against it, they support paying back debts. I am ashamed that this is happening in the House, but I know the United States Chamber of Commerce and the local Chambers of Commerce around this country will study this termination bill and I hope we hear from them much before the election. Mr. Speaker, I reserve the balance of my time. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Oklahoma (Mr. Largent), one of the authors of the bill, to respond. Mr. LARGENT. Mr. Speaker, the previous speaker got one thing right, this is an historic moment. Understand, no one likes to be forced to do anything. My children do not like to be forced to make their bed and Congress certainly does not like to be forced to do anything. This bill simply does that, it forces Congress to quit talking about comprehensive tax reform and actually do something about it. And I would suggest to the previous speaker that maybe the reason he is in the minority and not in control is because it was his side that gave us this, the 6,200 pages that we currently know as the tax forms and instructions about how to file our tax returns today. And the gentleman is also right about another thing. The way it has always been done before is to go to the Committee on Ways and Means, in a small room in the back, and a few people decide about what the Tax Code should look like for the American people. What we are trying to do is to include all of the American people in the debate and in the discussion and in coming up with a comprehensive tax reform that is written not by a few people on the Committee on Ways and Means but is a consensus opinion of the American people and the business people in the communities around the country, the people that are suffering through 5.4 billion hours filing their tax return every year at a cost of somewhere over $200 billion just simply to comply with the current Tax Code. So the gentleman is right, we are trying to do it differently, we are trying to make sure it does not happen in the Speaker's room or in the Committee on Ways and Means but in the living rooms of the American people in this country, where they have a voice in the way their government writes a new comprehensive tax law. Mr. RANGEL. Mr. Speaker, I yield myself 1 minute to say to the distinguished gentleman that he keeps referring to that pile there as being something that has been put together by the Democrats. When we had a debate on the rule, I thought he said that this 800 pound tax document was passed by the Republican majority and he voted for it. So I would be glad to go over there and just put this on that pile. The second thing is that, we do not have to be another tax expert to know that the Congress should not be having to be forced to do anything. The majority should not have to force themselves to be responsible. All they have to do is take their consensus from the people and pass a decent, respectable, fair and equitable progressive tax bill. They should not force themselves to do it; just do the right thing. Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Stark). Mr. STARK. Mr. Speaker, I thank the gentleman for yielding me this time. We have talked today about the asininity of this bill, the sheer folly, the sophomoric sort of approach. I guess I would remind the people that it is the Republicans that shut down the government several times because they were unable to come up with a budget. I would challenge any Republican who has an idea, much less an idea of what they would do just in the oft chance they fail to come up with a bill. And even if they were to come up with a bill, they are not telling us what happens, say, in health care, an issue which they postulate a good bit about and posture about. The Armey flat tax bill, which they might choose, imposes tax penalties on employers that provide health care benefits to their employees. The Tauzin retail sales tax bill imposes a sales tax on people when they pay for health insurance and health care. I wonder if that is what they intend to do. The Republicans voted to increase the rate at which self-employed people could deduct their health care. This will end that. I presume that they really do not care, as they have not in the past, about providing health care to the 45 million uninsured. I am sure that they do not want to help employers pay for it, because I think they are indifferent. I am not sure that anyplace in the King James version of the Bible it suggests that employers should pay for health care benefits or that we should insure people. Therefore, some Republicans will tend to ignore the suffering that people have for lack of health care. The basic fact is that this is sheer irresponsibility, obviously drafted by people with no understanding of business or the Tax Code or economics, some things that are important to having the country's economy function. One of the things that many of my colleagues on the Republican side have been very assertive of is States rights. But what they do not understand is that this would also destroy many States' ability to raise any revenue. Many States that have an income tax parallel or mirror the Internal Revenue Code. And if in fact, as their bill suggests, we would stop collecting funds in the year 2002, we would, therefore, put these States out of business. And we would not have, obviously, any Federal money to support them. So they are impacting many States. The unintended consequences of this bill are legion. So that I want to remind my friends and colleagues that no one suggests that we should not reform the Tax Code. The last major reform was led by Ronald Reagan, at his insistence. Much of what is stacked over on that table was Ronald Reagan's suggestion, which we passed. And it was not a bad bill, I might add. Now, we have no bill and we have a nonsensical campaign bumper sticker, and I hope we vote it down and do not see this kind of embarrassing legislation brought again. Mr. BUNNING. Mr. Speaker, I yield 3 minutes to the gentlewoman from Washington (Ms. Dunn). Ms. DUNN. Mr. Speaker, after serving on the House Committee on Ways and Means for the past 3\1/2\ years, I am continuing to be amazed by the outrageous provisions that are involved in our current income Tax Code. In no small part, many of these provisions that are a function of the Tax Code have spiraled out of control. The irony is that while our Tax Code has just about 7 million words, it lacks two regular words, and those words, Mr. Speaker, are common sense. The current income tax system is far too complex and it is a source of utter frustration for millions of hardworking Americans and for their families. Over the past few years I have heard from thousands of constituents in my district alone and they have talked to me about hundreds of problems they have experienced with the system of taxation. A common theme, as we all know, has been the intrusive nature of the Internal Revenue Service. I believe it is time for this issue to be brought out of America's kitchen and on to the committee calendars of the Congress. [[Page H4657]] Money magazine last year reported that not one of 45 professional tax preparers could accurately compute a hypothetical family's tax return. Fewer than one in four came within even $1,000 of the correct figure. How can we expect average citizens to comply with a code when licensed professionals, who have spent years studying the system, cannot even get it right. Not only this, but the cost of compliance for the average family is horrendous. Each year Americans devote 8 to 10 billion hours complying with our Tax Code. This amounts to over 5 million Americans working all year long, the equivalent of the entire work force of my State, Washington State, of Iowa and Maine. The cost of complying totals about $200 billion annually, or $700 for each, man, woman and child in America. These are just the numbers associated with following the law. The income tax system involves a number of other costs, including those associated with enforcement and collection, as well as the cost of tax litigation. Sunsetting the code will work. President Clinton described this plan as reckless or irresponsible. Actually, as the President should know, it is common practice. Major Federal Government programs, such as spending on highways, education and agriculture, regularly expire and are rewritten in 5-year increments. This is a strategy also used by the States, who understand that change will not occur unless they break through the gridlock. This is exactly how this legislation to sunset the Tax Code will work. There is a national debate going on outside the Congress, Mr. Speaker, on the direction of the Tax Code. We have a terrific opportunity here today to improve the Federal system of corporate and personal income taxation in a manner that will both significantly improve the economic performance of our Nation and substantially reduce the compliance and administrative burden on American families. By scrapping this code, we will bring this debate into focus and force ourselves to discuss this issue. I urge its support. Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from Washington (Mr. McDermott). (Mr. McDERMOTT asked and was given permission to revise and extend his remarks.) Mr. McDERMOTT. Mr. Speaker, it is really hard to come down here and be serious about this kind of thing. No one likes to pay taxes, no one likes to have to sit down once a year and send money to the government to run it, but what we have today, in an effort to tap voter discontent by the Republicans, is a cheap campaign prop. This is a bumper strip we are doing today, that is why it is only about two sentences long. In order to take this seriously, we have to go back to a satirist who used to write for the Baltimore Sun by the name of H. L. Mencken. H. L. Mencken called the American public ``Boobis Americanus''. That is, they are all stupid. Now, in order for my colleagues to come with a bill like this, they have to think the American people are stupid; that they simply do not know what is going on. If we say to the American people that right now we spend $1,200,000,000 and we are going to wipe all that out and we are going to get it from somewhere else; now, where are they going to get it from? The moon? Or from somebody else? This sounds like a bill based on the Senator Long theory of, ``Don't tax you, don't tax me, tax that guy behind a tree.'' The American public knows there has to be a Tax Code if we are going to have the kinds of goods and services that we want in this country: Social Security, Medicare, highways, national defense. My colleagues are not going to get rid of the money. They simply are creating the illusion for people that they will come up with a Tax Code that will not tax them, it will tax somebody else. Well, how stupid do my colleagues think the American people really are? They know that their deduction for their interest on their house they get now. My colleagues are not guaranteeing them anything on their house. My colleagues are not guaranteeing that their employer can deduct paying for health care for them. The average employer today, if he spends $100 on health insurance, actually costs him $65. If we repeal the code, it costs $120. Now, I know my colleagues will say, oh, we are going to take care of that. Well, if my colleagues are going to take care of it, why do they not put a proposal out here to simply say that they are going to wipe out the code and come back some day, some uncertain time? The gentleman from California (Mr. Stark) raised another issue which my colleagues really are not thinking about. The Republicans are creating chaos in this country, in the business community planning. No businessman can plan 3 years out. {time} 1300 The problem with us is we plan 2 years out. Business plans 5, 10, 20. They want chaos. This is a bad piece of legislation. Seeking to tap into voter discontent about the complexity of the tax code, the Republican leadership today is disregarding the major issues confronting our nation in order to turn the House Floor into a cheap campaign prop. So while this bunch wastes your tax dollars by ranting, raving and campaigning about how they want to ``rip the tax code up by its roots''--without having any idea what tax system they want to replace it with--I am going to talk about what impact this rhetoric will have on real people. In particular, what this extremist legislation will mean to the ability of Americans to purchase affordable health care. Before I begin, it is important to note that the same people in the Republican majority currently peddling this ``scrap the code'' rhetoric, just last fall voted to add hundreds of new pages to the tax code and a myriad of new complex tax computations. Because of last year's tax law, this bunch added 35 new lines alone to taxpayers capital gains tax forms. So, keep that in mind that when you hear this bunch talk about tax simplicity--they are the ones who 6 months ago made the tax system a whole lot more complex. Most disturbing in their ``scrap the code'' rhetoric is the proposal to establish a rhetorically pleasing, yet critically flawed ``flat tax.'' This plan is often criticized because of its substantial revenue losses, its unfair redistribution of the tax burden, and its elimination of subsidies for home ownership. This push for the flat tax may help Republicans at the polls, but for the millions of American workers who need affordable health insurance, the flat tax is disastrous. While not necessarily ``news'' to the 42 million uninsured and the 29 million more who are underinsured in this country, there is no question that the group of workers and early retirees who will get hurt by the flat tax are the same ones who are currently being threatened by rising health costs in this country. A recent study by the National Coalition for Health Care found that between 1985 and 1997, the cost of health care doubled and it is expected to double again in the next decade. Next year alone, health premiums are estimated to rise between 5 and 10 percent--a rate at least twice that of the increase in benefits and wages. The number of uninsured in this country will exceed 42 million next year and by 2005, it is estimated that one in five Americans under the age of 65 will be without health insurance. The impact passage of the flat tax will have on worker's health insurance would be devastating. Under current law, there are substantial income tax incentives for employer-provided health benefits, with additional tax-benefits available to the self-employed who purchase health insurance. Employer-provided health benefits are exempt from income tax, Social Security, and Medicare employment taxes. For example, under the current system, the after-tax cost to an employer that provides $100 in health benefits to their employees is $65. Yet, the flat-tax plan destroys this health insurance incentive by increasing the employer's after-tax cost to $120. Under the flat tax's domestic business tax, amounts paid for non-cash fringe benefits, such as health care, are not deductible. As a result, the plan would impose an onerous tax penalty on employers providing health benefits. This legislation goes a step further by including a new tax on tax-exempt charitable organizations and Federal, State, and local governments equal to 20 percent of the amount paid for health benefits for their workers. Health benefits to retired workers will also decline. Many companies have large and burdensome liabilities for retiree health benefits and in recent years, those same companies have tried to limit benefits. The likely response from employers to the flat tax's tax penalties will be a significant reduction in health care benefits available to its current, future, and retired workers. Just last year, MIT economist James Poterba warned that ending the tax preference for employers who provide health insurance would cause the number of American families without health insurance to increase by 20 percent! In fact, such a decline in employer-provided health benefits should not surprise anyone familiar with the history of the flat tax. [[Page H4658]] When the Kemp Commission first proposed adoption of the flat tax, even the Health Insurance Association of America--the same group that spent millions of dollars to kill expansion of health care coverage in 1994 and is on the verge of spending millions more to kill managed care safeguards--warned ``one of the unintended consequences of eliminating the exclusion for health insurance premiums is likely to be a rapid increase in the number of people without private health insurance coverage.'' If you want to terminate the tax code, it is vital that you understand the ramifications of each remedy. There's no question that ripping away crucial tax incentives will increase the cost of health care in this country. I find it amazing that instead of finding ways to improve the quality, affordability, and availably of health insurance, the Majority is using its control of Congress to make America's health care problems worse. Before you jump on the ``scrap the code'' bandwagon, think, for a second, abut what this legislation will mean to the affordability of health car for America's workers, their families, and their employers. Unfortunately, it's clear form this debate that all this bunch is interested in doing is devaluing the legislative process of our democracy in order to create a simplistic bumper-sticker slogan in time for November's elections. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Pennsylvania (Mr. English). Mr. ENGLISH of Pennsylvania. Mr. Speaker, I thank the gentleman for yielding me the time. Mr. Speaker, our tax system hangs like an albatross around the neck of the American taxpayer, stifling savings and productive investment, and arbitrarily punishing or subsidizing activity and making the process of paying taxes nightmarishly complex even for those of modest means. In my view, the time has come to replace our current tax system. But we will never do it unless we overcome the inertia of the legislative process, unless we override the influence of the entrenched special interests who have a stake in the complexity of the Tax Code and who savor gridlock on this issue, and unless and until we force the issue and put everyone's feet to the fire. We propose to do that today. I rise in strong support of the Tax Code Termination Act, legislation that will finally give American taxpayers a solid time line for fundamental tax reform. Mr. Speaker, I have been a strong advocate of replacing our current Tax Code with a system that is fairer, radically simpler, eliminates the bias against savings, and will allow the U.S. to be more competitive internationally. I am prepared to accept the challenge of the gentleman from California to put forward my proposal this year. But replacing the Tax Code will be an enormous undertaking, and the time line for consideration should not be put off one more day. I challenge my colleagues, if they do not believe we can replace the current Tax Code with something simpler and fairer that will meet the needs of the American public, then vote against this bill. If they feel that any tax reform inevitably is going to be an improvement, as I do, vote for this legislation and put our feet to the fire. Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from Maryland (Mr. Cardin). Mr. CARDIN. Mr. Speaker, I rise in opposition to the current Tax Code and in support of comprehensive reform of our Federal tax system. I, too, agree that our Federal tax system is too complex, it is not efficient, it costs our taxpayers too much to comply with it, it is not sensitive for savings, we rely too much on income taxes. But the legislation before us is one of the strangest notions I have encountered in the 12 years I have served in this body. The bill is a result of frustration in our current tax structure, and it tells a Congress in the future to do something about it. We have had 4 years under Republican leadership to try to do something about our Tax Code. In this term, I thought we were going to do something. Last year, in a bipartisan way, we joined Democrats and Republicans to reform the Internal Revenue Service. We thought that bill would pass last year. It is still lingering within a conference committee. If we want to do something, why are we not using the time today to at least reform the IRS and deal with the tax collecting agency? But instead, no, we are debating some myth about what we are going to do in the future. It is outrageous. It is not even a fig leaf. We have not had a hearing on this proposal. We do not know what it is all about. Why are we not debating specific proposals on this floor? Mr. Speaker, yesterday in the Baltimore Sun, my local paper, I authored an article about why I thought a VAT tax is better than a flat tax and why we do not need a corporate income tax and we should be encouraging more savings. Why are we not having that proposal on the floor today and debating? Why is the Republican leadership not giving the American public real reform rather than bringing up a hope of what is going to happen 4 years from now, causing all types of panic about people trying to plan for their futures. People are trying to figure out how to save for their retirement. They want to know what the tax rules are going to be. And we are going to tell them, we are going to change them, but we are not going to tell them what it is going to be? How irresponsible. How wrong. Use the time we have. This schedule this year has been embarrassing. We have not been here most of the time. Why are we not using the time this year to have a serious debate on tax reform rather than bringing up this sham? It is wrong. They know it is wrong. This is not the right way to go. I urge my colleagues to defeat the bill. Mr. Speaker, I rise in opposition to the current tax code, and in support of a real debate on comprehensive reform of the federal tax system. The legislation before us is one of the strangest notions I have encountered in the twelve years I have served in this House. The bill is the result of frustration with the current tax system. Normally, when members of Congress seek to change existing law, they introduce legislation to make the changes they support. But this bill doesn't do that. We are here, in the 105th Congress, debating a bill that says that the tax code is such a mess that the 107th Congress should do something about it. That's not a serious proposal for simplifying the tax code. Instead of real tax reform, it is just an empty promise. Yesterday, the op-ed page of the Baltimore Sun, my home town newspaper, printed my article titled ``Why a VAT tax is better than a flat tax.'' The article presented my view that we should replace the existing tax code with a broad-based consumption tax, and relieve 75 million Americans of the burden of the individual income tax. I support repeal of the corporate income tax. Some members of the House will agree with my position; others will disagree. We should begin this debate now, rather than putting it off until the year 2002. We need to reform the tax code, and when we have done our jobs, and written a tax code that does not punish the American people, I will be proud to join in voting to sunset the existing code. Until then, Mr. Speaker, this process is nothing but talk. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Sam Johnson). (Mr. SAM JOHNSON of Texas asked and was given permission to revise and extend his remarks.) Mr. SAM JOHNSON of Texas. Mr. Speaker, we have had hearings, and 2\1/ 2\ years ought to be long enough for the people of the United States to speak and determine what tax they want. The current Tax Code is complex, confusing, corrupt, costly, coercive, and a lot of other Cs that I cannot think of. But so far there is a lot of talk and no action. When it comes to tax reform, a sunset date will force us to take action and relieve the American taxpayer. We ought to also repeal the 16th Amendment of the Constitution, and I have introduced a bill to do such a thing, the Tax Freedom Act. It outlaws Congress' ability to collect taxes on income except in time of war. Both these bills accomplish one common goal. No matter whether you support a flat tax, consumption tax, value-added tax, national sales tax, blue, black, brown, whatever, the common goal is replacing the current complicated Tax Code. Fundamental and comprehensive tax reform will be one of the most profound changes this Nation experiences this century. The Tax Code Termination Act brings us one step closer to achieving that change and restoring freedom to the American taxpayer. Americans want, need, and deserve to get rid of IRS oppression. We have been [[Page H4659]] talking about tax reform for years. Mr. Speaker, it is time to quit talking and start action, and this bill does just that. Mr. RANGEL. Mr. Speaker, I am reminded that when Dr. Frankenstein created his monster, he went immediately to trying to get rid of it. And, so, as the Republicans pass this tax bill, this is the same bill they want to pull up and pull up by the roots. Gentlemen, it is your bill. Do with it what you want. Mr. Speaker, I yield 3\1/2\ minutes to the gentlewoman from Connecticut (Mrs. Kennelly). Mrs. KENNELLY of Connecticut. Mr. Speaker, I rise in strong opposition to this legislation to terminate the Internal Revenue Code without replacing it with a system that is fairer, that is simpler, and encourages economic growth. I come from a State, a small State, Connecticut. But in that State, we have 18 of the Fortune 500 companies. Now, I can just imagine a conversation between a CEO and a board of directors when they hear that this bill is passed, because he or she would have to explain to the respective boards of directors how millions, and in some cases billions, in assets will disappear from their corporate balance sheets because of this legislation. The chief financial officer will have to explain there is nothing that can be done to prevent this because the Congress passed a bill to eliminate the Code and did not replace it with anything. And as a result of this bill, excess foreign tax credits would disappear, reducing the company's net worth. As we all know, foreign tax credits are carried as assets in today's corporate balance sheets. As a result of this bill, the corporate alternative minimum tax credit carried forward would disappear, reducing the company's net worth. Of course, as we know, the corporate alternative minimum tax credits are carried as assets on today's balance sheets. And as a result of this bill, research and experimentation credits would disappear, because as we know, R credits are carried as assets and those would just go away. As a result of this bill, deferred tax assets representing retiree health obligations would disappear, reducing the company's net worth. Not to mention providing retiree health benefits would then disappear because they could not write them off. The Financial Standards Accounting Board happens to require companies to charge retiree health obligations against current earnings. Retiree health obligations are deductible when actually paid. These deductions carried on today's corporate balance sheets are deferred tax assets. They would disappear. And as a result of this bill, operating loss carried forward would disappear, reducing the company's net worth. Net operating loss carried forward are carried as assets on today's corporate balance sheets. Unfortunately, many of these CEOs are going to find themselves explaining more than one of these things. In a few cases, the loss of the impact on these changes on the balance sheets could result in a profitable company losing all their positive net worth. Because this is the fact of the Code as it exists today, and if we do not replace it with something, all these things happen. I thought the majority in this Congress was opposed to takings. But, as I read this list, I guess not. But it gets worse. While the CEO needs to explain to the board that the business plan is no longer operative, the small businessman finds he is facing the same problem. A businessman or businesswoman would have to realize the rate of return on capital can no longer be projected. She has no idea how the company should calculate labor costs. She has no idea how to determine the most efficient financing mechanism for the new building that they will have purchased. They have no idea of the period over which the new equipment could be depreciated. I wonder how many CEOs would lose their jobs or how many small businesses would go out of business. It is because of these concerns, very real concerns, and I have been on the Committee on Ways and Means for now 13 years, that the National Association of Manufacturers are opposed to this bill. The Internal Revenue Code is far from perfect. We all know it. But if we are going to eliminate it, replace it with something that is simpler, fairer, and encourages economic growth. That is all we ask today. Do the whole job, not just half of it. Mr. BUNNING. Mr. Speaker, I yield 3 minutes to the gentleman from Colorado (Mr. Dan Schaefer). (Mr. DAN SCHAEFER of Colorado asked and was given permission to revise and extend his remarks.) Mr. THOMAS. Mr. Speaker, will the gentleman yield? Mr. DAN SCHAEFER of Colorado. I yield to the gentleman from California. Mr. THOMAS. Mr. Speaker, if we would listen to the gentlewoman from Connecticut (Mrs. Kennelly), who just spoke, what we would have to believe is that the business world did not exist prior to the invention of the Internal Revenue Tax Code; that corporations offer health care only because they get a tax deduction; without the tax deduction, there would be no compassion on the part of the owner to the worker; and that all of the complications that a CEO would have to deal with, in fact jeopardizing their job, are essential to running a business. What in the world did business do before there was an Internal Revenue Service? Mr. DAN SCHAEFER of Colorado. Mr. Speaker, during my 15 years here in the House, literally thousands of taxpayers have contacted me to express their frustration with the current code that we have. The Tax Code is so complicated that even those who call themselves tax experts cannot figure it out. Let me give my colleagues a good example. Last November, Money Magazine gave 45 accountants nationwide a financial profile of a fictional family and asked them to prepare a hypothetical tax return. Not only did all 45 come up with different answers, but the computed tax liability ranged from $36,000 to $94,000. No one knows whether they are illegal or not illegal anymore when they file their returns. Today, the average family pays more in taxes than it spends on food, clothing, and shelter combined. As a whole, Americans will spend at least $200 billion and over $5 billion complying with the income tax this year alone. This is more time than it takes to produce every car, truck, and van in the United States each year. Tracking all this paperwork requires the Internal Revenue Service, five times larger than the Federal Bureau of Investigation. And unlike the FBI, the IRS's power is nearly absolute. It may search our property and records without a court order. And although both the House and Senate have overwhelmingly passed substantial IRS reform bills, I do not believe that that alone will prove successful. Over the past several years, I have talked to audiences nationwide about the case of replacing the Federal income tax with a national sales tax. Two years ago we introduced the National Retail Tax Act of 1996, and just last year reintroduced it again in H.R. 2001. This legislation is going to abolish the IRS completely, eliminate corporate taxes, gift taxes, capital gains tax, inheritance taxes, gift taxes, and all excise taxes unless they are tied to a trust fund. I think this is the way to do it. Let us for once take the power of taxation away from Congress, give it to the American people, and let then decide. And once and for all, let us eliminate 8,000-plus pages in the Tax Code and replace it with a Tax Code that is going to say April 15 is another bright, spring day. Mr. RANGEL. Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman from Michigan (Ms. Stabenow). Ms. STABENOW. Mr. Speaker, I rise today to urge a no vote on the bill, but to first indicate that I have voted for IRS reform that we are still waiting to pass this Congress. I support real tax reform. And I would even support a deadline if there were alternatives proposed by the other side, by the majority, that were good for hard-working men and women in my district. {time} 1315 Mr. Speaker, before coming to Congress, I served for 16 years on the tax and finance committees in the Michigan legislature. I supported and sponsored numerous tax cut bills. But in [[Page H4660]] each case, they were making things better for the middle-class families, family farmers and small business people that I represented. Unfortunately in this case, the alternatives proposed by the majority are even worse, even more unfair than the current system. For instance, a national retail sales tax, which is also a use tax on professionals and entrepreneurs, would, according to the tax analysts, raise the cost of buying goods and services something close to 30 percent when all is figured. Houses, cars, food, prescription drugs for our senior citizens, on and on. Insurance premiums. It goes on and on. In addition to that, it would tax doctor's visits. It would tax accountant's visits. It would create a situation where every small business person and entrepreneur in my district, every professional, would have to become a tax collector. I do not call that better than what we have right now. Let us really fix it and really do something that is better by proposing a real alternative. In addition, the flat taxes that have been proposed by the other side just shift from wealthy individuals to the middle-class families in my district. Mr. Speaker, I want to see something simpler. I want to see reform. But let us do it in a way that does not involve the proposals coming from the other side which are not good certainly for the people that I represent in Michigan. I would urge a ``no'' vote on the bill. I would urge my colleagues instead to do what we did last year. Let us join together in a bipartisan way. We passed a balanced budget amendment. We passed tax cuts last year. Let us join together and create real reform for the real hard-working families, middle-class Americans that deserve the relief in this country. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Minnesota (Mr. Peterson). Mr. PETERSON of Minnesota. Mr. Speaker, I rise today in support of the Tax Code Termination Act. I have been in favor of scrapping this code and starting over for a long time. I am one of the few Members of this body that is a certified public accountant that has actually done tax returns for a living and have lived with this code for a long time. This Congress, under both parties, has contributed to this problem. The people on my side of the aisle might have a good point. I say to them that if they do not like this method of trying to get at this problem, then put something else forward. I think it makes sense for us to come up with a date certain. We did that when we balanced the budget and it helped us focus our attention. We have a date certain on when we are going to overhaul this Tax Code. I think it helps us. But, as I have said, I have been for reforming this system ever since 1986 when, under the guise of tax simplification, we passed a bill which I think was arguably the worst piece of legislation that has ever been passed in this Congress. We made it worse in 1990, and we made it worse last year when they passed the 1997 tax act to the point where my partner, who is still doing tax returns, told me this weekend that this is so complicated that he does not think he can any longer do a tax return by hand. The only way he can do a tax return is if he has a computer to be able to make all these computations and go back and forth. Mr. Speaker, this code has gotten completely out of hand. It needs to be simplified. It is not happening under the current process. I am not sure this is the best process in the world but it is the only thing we have in front of us today. I am in favor of overhauling the code. I think the way we do that is we start from scratch, with a clean slate, and then try to build up something that is simpler and makes more sense. I support this bill and encourage everybody's support. Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from Wisconsin (Mr. Kleczka). Mr. KLECZKA. Mr. Speaker, I rise in strong opposition to the proposal today; however, I do support simplifying the Tax Code. Mr. Speaker, what we are involved in this afternoon is a new form of roulette. This afternoon we are playing Gingrich roulette. I say to all Members, it is a most dangerous game. Mr. Speaker, I happen to serve on the Committee on Ways and Means. This bill comes before us with no hearings, no committee deliberations, no contingency plans should we not have a new Tax Code ready by July 4, 2002. So what we are doing is we are just shooting in the wind, hoping that Congress can develop a whole new Tax Code that is better than the current system. Let us talk about the current system for a moment. The gentleman from Oklahoma brings forth the 6,000 pages that he claims to be the Tax Code. Where does he think that came from? How many pages of that Tax Code give tax relief to my constituents? Oh, some do. There are some child credit tax provisions in there, there are some earned income tax credit provisions in there, but know full well the bulk of that document you have before the House today is there for the benefit of the moneyed special interests in this country. How many pages did Ronald Reagan and his 8 years add to the Code? Of the 6,000, I will bet 2,000. How many did President Bush and his administration add to the Code? Probably more than one thousand. But no Republicans are coming up and decrying those enormous and complex additions to the Tax Code. Why? Because all that is good Tax Code. It is good Tax Code because many of those provisions apply to your constituents. While I am talking about your constituents, let me congratulate you on a very successful fund-raiser last night. Mr. Speaker, I am told that you folks raised in excess of $10 million last evening alone. All the wealthy people that showered you with that money were there because they were crying out for tax fairness? Who do you think you are kidding? Those folks who pumped $10 million into the coffers of the Republican Party are part and parcel of that Tax Code. And their presence last night to eat your chicken was a hearty thank-you. But now you stand before us cleansed and pure decrying, ``We don't like the Tax Code because it is too complex and too unfair.'' But what are you going to tell the folks when you go to your parades on July 4 and you see their little Johnny or Jane and you hug them and say, ``Your family will get an extra $400 for each of them because we passed a child tax credit for you.'' They say, ``Yeah, but you also passed this bill that will take the credit away from us. What's going to happen to the child credit in 2002?'' ``I don't know.'' How about the home mortgage deduction? Every constituent of yours that owns a home wants that deduction retained. They may ask the gentleman from Oklahoma, ``What is going to happen in 2002 with that?'' ``I don't know.'' Mr. Speaker, I do not know what you guys are doing here today. But, again, congratulations on the $10 million fundraiser last night. You did a good job. Mr. BUNNING. Mr. Speaker, I yield myself 15 seconds. It is better than taking money from the Chinese government. Mr. Speaker, I yield 2 minutes to the gentleman from Washington (Mr. Metcalf). Mr. METCALF. Mr. Speaker, this legislation defines the Republican commitment to reduction of the tax burden on working Americans and thereby taking a mighty step toward ensuring a brighter future for people of all income levels. I am proud to be an original cosponsor of the Tax Code Termination Act. This legislation will provide for the abolition of the current unfair and burdensome Tax Code by 2001. This legislation does not carelessly abolish our current structure. Instead, the legislation requires the enactment of a replacement code by Independence Day, and that is a fitting day for this, 2001, that will be a fairer, simpler tax and reduce the tax burden on all Americans. Mr. Speaker, the current Tax Code has simply become too big and too complex to correct. You cannot fix it. All Members of the House should join us to replace the current Tax Code with a system that is fairer, less complicated and takes less money from working Americans. Mr. RANGEL. Mr. Speaker, if there is anybody in this body that knows of anyone that has taken money from the government of China, they would be aiding and abetting and involved as an accomplice in a felony unless they reported it to our Attorney General. [[Page H4661]] Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Matsui). Mr. MATSUI. Mr. Speaker, I thank the gentleman from New York for yielding me this time. Mr. Speaker, it is really hard to take this whole issue seriously this afternoon. We all know that it is not going to become law. It is going to pass out of the House but the Senate will not take action on it. That is why we are not seeing lobbyists clamber down on Capitol Hill. That is why we are not seeing letters to the editor. That is why we are seeing no stories in the major newspapers throughout the country. This is really a political opportunity for one of the parties. This is not going to become law. So it is really hard to get particularly pushed out of shape or excited or concerned about this. It is just not going to become law. Because the reality of the situation is that those that are advancing this particular proposal really in 1997 added thousands of pages to the Tax Code. In fact, we have added in 1997 when the Republicans were in control of the Congress 285 new sections to the Tax Code, 824 new amendments to the Tax Code. This is just in 1 year. There are now five ways, five separate ways to do capital gains. In fact, Schedule D, which had 23 lines, now has 54 lines, and it really does take H Block to really figure it out. The average person cannot do their taxes. Most of them do not have capital gains so they do not have to worry about it. In addition to that, there are now two different way to do IRAs, a back-ended way and a front- ended way. In addition, you can convert over, but you better make sure you understand your economic situation before you do. We also have a number of different ways either to take a credit or a deduction if you are a student. Should the student take it? Should the student's parents take it? Should the grandparents take it? We have really added complexity to the Code. The 1997 bill was probably the worst tax bill the United States has ever had, because it added more complexity to the Code than we have had in the last 25 years. And so this is not a real exercise in good government. This is really a show game. I have to say that if it were taken seriously, I think people in this country today would be really concerned. You would have to say, shall I buy a house because I get a deduction on my home, and that is an incentive, that reduces my taxes. But obviously if we changed the Code or the Code is eliminated in 3 years, I may lose that deduction and all of a sudden I might not be able to make my monthly payments on my other expenses. But no one is saying that, because this is not a serious effort. It is really a shame. We are going to be in until midnight tonight and we are not going to take any really substantive action. The irony of it is that we have 13 appropriations bills that are supposed to pass, we have a budget, but we do not have it out of the House yet. Not one appropriations bill has been taken to this body. There has been no budget reconciled between the House and the Senate. It was supposed to be done on April 15. Here we are at June 17, 2 months later. It is amazing. It is absolutely amazing that we are wasting our time engaged in this kind of activity that has no relevance, no value and certainly it is something that is a political exercise that I think the American public will eventually get disgusted with. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Hall). (Mr. HALL of Texas asked and was given permission to revise and extend his remarks.) Mr. HALL of Texas. Mr. Speaker, I want to be logical about this. I have thought a lot about it. I rise today in support of the Tax Code Termination Act. I rise at a time when we are doing better. We are doing better from the standpoint of economics. You can sell a piece of property now. People can find a job. We have got the lowest inflation. We have the lowest unemployment. Knowledgeable economists have told us that we have the best economy we have had since the late 1940s and early 1950s when we had the strongest financial position and strongest geopolitical position in the history of this country. So I guess you have to ask, why? Why are we where we are? I think the President, the present President thinks that he caused it. I think Mr. Dole probably think he did. I think Mr. Bush thinks it is something he put into motion. But really and truly I believe it is because we are just now getting over the lousy 1986 so-called Tax Reform Act. A lot of us have talked enthusiastically over the past few years about the need to replace our current tax with one that is more equitable, one that is more fair. Specific proposals for both a flat tax and a sales tax replacement have been debated throughout this country by proponents of these plans. A lot of us have signed on to both of these bills. The IRS administered Tax Code does not work. It has been the source of endless anguish, unfairness, confusion and the invasion of privacy for a lot of hard-working, well-intentioned Americans. In the interest of fairness, however, I must say it is only accurate to note that many hard-working and honest employees of the U.S. Treasury Department have been embarrassed and appalled by some of the testimony by their fellow employees during congressional hearings on IRS abuses. So I think they know from within that we need to do something about the Tax Code that we have. We have to recognize the fact that our Tax Code has facilitated, and in many cases encouraged outrageous abuses while escaping all attempts at reason and justice. The American people deserve the right to know when it will end. We need to be able to collectively undertake this important goal as opposed to a mere debate. {time} 1330 Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from New York (Mr. Houghton). (Mr. HOUGHTON asked and was given permission to revise and extend his remarks.) Mr. HOUGHTON. Mr. Speaker, I am not going to take long here, but I do think that this is something which I would like to share an idea or two with my colleagues. Let me tell them a story. There was a man called Robert Ruark, and he wrote a story called ``Something of Value'' which talked about the end of colonialism in Africa and the total chaos, and the reason there was chaos is that there was nothing to take the place of the old governments. And I think he said we could say as almost a general statement, ``When you take something away, you must be able to put something in its place.'' Now I do not consider this a political argument at all. I consider this an argument of technique. Some people think that the idea of forcing an issue is the better way to get to an end rather than logically taking a look at what the steps are in order to get where we ultimately want to be. I do not think anybody is happy with this Tax Code. I do not think anybody is happy, as my colleagues know, really since the days of our Lord when the Publicans were running around. I say ``Publicans,'' not ``Republicans,'' were going around and trying to collect taxes. But really the question is: What is out there? I think we must exert an element of judgment here. As my colleagues know, to force something without anything at the end, and let us say at the end of June in the year 2002 we have nothing; what do we do? Where do we go? How does somebody plan? Will there be Social Security? Will there be Medicare? Will there be anything else? No one really knows. Mr. Speaker, this is a very high stakes game, and to use a technique of forcing something without any anything on the other end I think is highly irresponsible, and therefore I think it is a bad measure and something which we should vote against. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentlewoman from Wyoming (Mrs. Cubin). Mrs. CUBIN. Mr. Speaker, I rise in strong support of H.R. 3097, the Tax Code Termination Act. I intend to vote for the passage of this legislation, not just because I am a cosponsor of the bill, but also because it makes sense. I have to just take exception with some statements by the speaker from California who talked about increasing people's taxes because of the possibility of not being able to deduct mortgage interest from their income and [[Page

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TAX CODE TERMINATION ACT
(House of Representatives - June 17, 1998)

Text of this article available as: TXT PDF [Pages H4654-H4677] TAX CODE TERMINATION ACT Mr. BUNNING. Mr. Speaker, pursuant to House Resolution 472, I call up the bill (H.R. 3097) to terminate the Internal Revenue Code of 1986, and ask for its immediate consideration in the House. The Clerk read the title of the bill. The SPEAKER pro tempore. The bill is considered read for amendment. The text of H.R. 3097 is as follows: H.R. 3097 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Tax Code Termination Act''. SEC. 2. TERMINATION OF INTERNAL REVENUE CODE OF 1986. (a) In General.--No tax shall be imposed by the Internal Revenue Code of 1986-- (1) for any taxable year beginning after December 31, 2001, and (2) in the case of any tax not imposed on the basis of a taxable year, on any taxable event or for any period after December 31, 2001. (b) Exception.--Subsection (a) shall not apply to taxes imposed by-- (1) chapter 2 of such Code (relating to tax on self- employment income), (2) chapter 21 of such Code (relating to Federal Insurance Contributions Act), and (3) chapter 22 of such Code (relating to Railroad Retirement Tax Act). SEC. 3. NEW FEDERAL TAX SYSTEM. (a) Structure.--The Congress hereby declares that any new Federal tax system should be a simple and fair system that-- (1) applies a low rate to all Americans, (2) provides tax relief for working Americans, (3) protects the rights of taxpayers and reduces tax collection abuses, (4) eliminates the bias against savings and investment, (5) promotes economic growth and job creation, and (6) does not penalize marriage or families. (b) Timing of Implementation.--In order to ensure an easy transition and effective implementation, the Congress hereby declares that any new Federal tax system should be approved by Congress in its final form no later than July 4, 2001. The SPEAKER pro tempore. Pursuant to House Resolution 472, the amendment in the nature of a substitute printed in House Report 105-580 is adopted. [[Page H4655]] The text of the amendment in the nature of a substitute is as follows: Strike all after the enacting clause and insert the following: SECTION 1. SHORT TITLE. This Act may be cited as the ``Tax Code Termination Act''. SEC. 2. TERMINATION OF INTERNAL REVENUE CODE OF 1986. (a) In General.--No tax shall be imposed by the Internal Revenue Code of 1986-- (1) for any taxable year beginning after December 31, 2002, and (2) in the case of any tax not imposed on the basis of a taxable year, on any taxable event or for any period after December 31, 2002. (b) Exception.--Subsection (a) shall not apply to taxes imposed by-- (1) chapter 2 of such Code (relating to tax on self- employment income), (2) chapter 21 of such Code (relating to Federal Insurance Contributions Act), and (3) chapter 22 of such Code (relating to Railroad Retirement Tax Act). SEC. 3. NEW FEDERAL TAX SYSTEM. (a) Structure.--The Congress hereby declares that any new Federal tax system should be a simple and fair system that-- (1) applies a low rate to all Americans, (2) provides tax relief for working Americans, (3) protects the rights of taxpayers and reduces tax collection abuses, (4) eliminates the bias against savings and investment, (5) promotes economic growth and job creation, and (6) does not penalize marriage or families. (b) Timing of Implementation.--In order to ensure an easy transition and effective implementation, the Congress hereby declares that any new Federal tax system should be approved by Congress in its final form no later than July 4, 2002. The SPEAKER pro tempore. The gentleman from Kentucky (Mr. Bunning) and the gentleman from New York (Mr. Rangel) each will control 1 hour. The Chair recognizes the gentleman from Kentucky (Mr. Bunning). General Leave Mr. BUNNING. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and include extraneous material on H.R. 3097. The SPEAKER pro tempore. Is there objection to the request of the gentleman from Kentucky? There was no objection. Mr. BUNNING. Mr. Speaker, I yield myself such time as I may consume to open the debate on this bill. Mr. Speaker, the Federal income tax system is broken beyond repair. We cannot tinker with it any longer and make it work any better. We need to wholesale reform and totally overhaul the system. There are two basic elements that are absolutely necessary for a Federal tax system. It must be understandable, and it must be fair. As it now stands, our Federal income tax fails badly on both counts. Our Tax Code has become so complex that no one can understand it. When tax experts cannot agree on how much an American taxpayer owes, how can we expect the average taxpayer to understand it? This complexity is expensive. It costs over $300 billion a year for taxpayers to comply with the Tax Code. That is money that is totally wasted. It does not benefit government or increase funding for essential services. It does not benefit the private sector or create investment, develop jobs, or improve the quality of life. It is just money down the drain. It is a crime. Our Tax Code is unfair. We have focused a great deal of attention this year on the marriage penalty, but this is just one of hundreds of inequities in the existing law. Over the years, Congress has created a hodgepodge of loopholes and arcane tax incentives, most of which were well-intentioned. But when you take them altogether and weed them into a 5\1/2\ million word tax code, it creates such a mess that only the very wealthy have the ability to take advantage of them. That creates unfairness. As a result, the American people have lost confidence in their tax system. Incremental change is not enough. We have tried that. It has resulted in failure and more complexity. We need real reform, a total overhaul of the Tax Code. We need to restore that confidence. That is what this bill is all about. It simply says that the sun will set on the Internal Revenue Code as we know it on December 31, 2002. It gives Congress 3 years to debate and develop a new tax system. It would simply force Congress to do in a timely manner what we need, no, what needs to be done, to pull the Federal income tax code out by its roots and replace it with an income tax system that is fair and understandable. This bill will help us do that. I urge my colleagues to support and vote for H.R. 3097. Mr. Speaker, I reserve the balance of my time. Mr. RANGEL. Mr. Speaker, I yield myself as much time as I may consume. (Mr. RANGEL asked and was given permission to revise and extend his remarks.) Mr. RANGEL. Mr. Speaker, this is a historic moment in the history because of our Congress, because I do not think that we will ever live to see a more irresponsible act committed by any Member of Congress. I know that this is an election year and so some leeway has to be given to the majority because, unfortunately, there is no institutional memory of them having passed any legislation this year. Being a politician myself, I can understand how they would like to capture the voters' imagination by doing something dramatic. But just to abolish the Tax Code, just to say that, by the year 2002, no tax shall be imposed by the Internal Revenue code, what a gift to give the American people. You will not have to pay any taxes until the Republicans, and do not laugh, until the Republican majority comes up with an idea as to how they are going to replace it. Let us think this one out. Who has been in charge for the last 3 years? Who had the majority? Who had the opportunity, really, to substitute this complex mess that they talk about? But rather than to come together, as if that is possible, with some type of a meaningful, fair tax code that would increase economic productivity for our great Nation and to continue to propel the prosperity that President Clinton has brought to us, they would rather just pull up the Tax Code by the roots. I assume that, while they are pulling it up by the roots, that this 800 pages of what they call a tax bill last year is mere fertilizer for the Tax Code that they are going to bring to us. Where are these great ideas that you have? Should the American people not have some idea as to where do you meet to come up with a new code? Years ago, Members would go to the Committee on Ways and Means. Now we go to the Committee on Rules. We have people just telling us what they are going to end, but no one is there to tell us what they are going to start. I have served on the Committee on Ways and Means for two decades. Every year, we had a tax bill; some good, some bad. For the last 3 years, we have not had anything that is coming up that is new. I want the Republicans to understand this, if they do not understand anything at all, they are in charge. They have a majority. They have the ability to call their troops together and vote for anything that they want, whether it is good or, in most cases, bad. But for God's sake, just with all due intention I did not bring the Bible, so I did not mean to say that, but for goodness sake, do not end something unless you tell the American people what do you intend to replace it with. We have business people that are planning now for the future. I would want them to call their Congressman, but since this issue is not being dealt with with the Congress, and since we do not know where the Tax Code is going to come from, and since the Committee on Ways and Means has lost jurisdiction, whoever meets with the Speaker should know what he is going to come up with. I would say, if people are planning for the future, whether they are going to have bonds out there, whether the States are going to have municipal bonds, where people want to know how to plan, call the Speaker, because I think he has some good ideas that he will not share with us. Second, if you are a hospital, church, synagogue, charitable organization, there is nothing in this bill that terminates that says you are going to be protected. I know the Republicans are going to protect them, so do not be afraid, but ask them how are they going to be protected. If we own a home and we have mortgage payments and we have been deducting them, we can deduct until the year 2000, and then we do not have to deduct anymore. [[Page H4656]] {time} 1245 Now, I do not know what happens, but we can call the Speaker and he will tell us what plans he has for mortgage deductions. And I tell my colleagues that, as complicated as this bill is, as bad as the Republican passed tax bill is, at least we know what we got. The fear is what are they going to come up with when for 3 years they have not even come up with a good idea. So I do hope that in the course of this debate that someone would come up with some kind of a plan that would give us some idea as to what they are going to fill this vacuum with. But I think killing the IRS, pulling it up by the roots, that the American people deserve better than just a bumper sticker. And if people do not like paying taxes and they think this is the solution, then I beg the Democrats in the minority, if they can just pass a law to keep us from paying taxes, why can we not pass a law to stop people from paying their debts? Why not? And if we do not like that, let us pass a law to terminate cancer. Let us think of something more exciting than our irresponsible brothers and sisters over here, and we will just say that if anyone votes against it, it means they support cancer; if they vote against it, they support paying back debts. I am ashamed that this is happening in the House, but I know the United States Chamber of Commerce and the local Chambers of Commerce around this country will study this termination bill and I hope we hear from them much before the election. Mr. Speaker, I reserve the balance of my time. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Oklahoma (Mr. Largent), one of the authors of the bill, to respond. Mr. LARGENT. Mr. Speaker, the previous speaker got one thing right, this is an historic moment. Understand, no one likes to be forced to do anything. My children do not like to be forced to make their bed and Congress certainly does not like to be forced to do anything. This bill simply does that, it forces Congress to quit talking about comprehensive tax reform and actually do something about it. And I would suggest to the previous speaker that maybe the reason he is in the minority and not in control is because it was his side that gave us this, the 6,200 pages that we currently know as the tax forms and instructions about how to file our tax returns today. And the gentleman is also right about another thing. The way it has always been done before is to go to the Committee on Ways and Means, in a small room in the back, and a few people decide about what the Tax Code should look like for the American people. What we are trying to do is to include all of the American people in the debate and in the discussion and in coming up with a comprehensive tax reform that is written not by a few people on the Committee on Ways and Means but is a consensus opinion of the American people and the business people in the communities around the country, the people that are suffering through 5.4 billion hours filing their tax return every year at a cost of somewhere over $200 billion just simply to comply with the current Tax Code. So the gentleman is right, we are trying to do it differently, we are trying to make sure it does not happen in the Speaker's room or in the Committee on Ways and Means but in the living rooms of the American people in this country, where they have a voice in the way their government writes a new comprehensive tax law. Mr. RANGEL. Mr. Speaker, I yield myself 1 minute to say to the distinguished gentleman that he keeps referring to that pile there as being something that has been put together by the Democrats. When we had a debate on the rule, I thought he said that this 800 pound tax document was passed by the Republican majority and he voted for it. So I would be glad to go over there and just put this on that pile. The second thing is that, we do not have to be another tax expert to know that the Congress should not be having to be forced to do anything. The majority should not have to force themselves to be responsible. All they have to do is take their consensus from the people and pass a decent, respectable, fair and equitable progressive tax bill. They should not force themselves to do it; just do the right thing. Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Stark). Mr. STARK. Mr. Speaker, I thank the gentleman for yielding me this time. We have talked today about the asininity of this bill, the sheer folly, the sophomoric sort of approach. I guess I would remind the people that it is the Republicans that shut down the government several times because they were unable to come up with a budget. I would challenge any Republican who has an idea, much less an idea of what they would do just in the oft chance they fail to come up with a bill. And even if they were to come up with a bill, they are not telling us what happens, say, in health care, an issue which they postulate a good bit about and posture about. The Armey flat tax bill, which they might choose, imposes tax penalties on employers that provide health care benefits to their employees. The Tauzin retail sales tax bill imposes a sales tax on people when they pay for health insurance and health care. I wonder if that is what they intend to do. The Republicans voted to increase the rate at which self-employed people could deduct their health care. This will end that. I presume that they really do not care, as they have not in the past, about providing health care to the 45 million uninsured. I am sure that they do not want to help employers pay for it, because I think they are indifferent. I am not sure that anyplace in the King James version of the Bible it suggests that employers should pay for health care benefits or that we should insure people. Therefore, some Republicans will tend to ignore the suffering that people have for lack of health care. The basic fact is that this is sheer irresponsibility, obviously drafted by people with no understanding of business or the Tax Code or economics, some things that are important to having the country's economy function. One of the things that many of my colleagues on the Republican side have been very assertive of is States rights. But what they do not understand is that this would also destroy many States' ability to raise any revenue. Many States that have an income tax parallel or mirror the Internal Revenue Code. And if in fact, as their bill suggests, we would stop collecting funds in the year 2002, we would, therefore, put these States out of business. And we would not have, obviously, any Federal money to support them. So they are impacting many States. The unintended consequences of this bill are legion. So that I want to remind my friends and colleagues that no one suggests that we should not reform the Tax Code. The last major reform was led by Ronald Reagan, at his insistence. Much of what is stacked over on that table was Ronald Reagan's suggestion, which we passed. And it was not a bad bill, I might add. Now, we have no bill and we have a nonsensical campaign bumper sticker, and I hope we vote it down and do not see this kind of embarrassing legislation brought again. Mr. BUNNING. Mr. Speaker, I yield 3 minutes to the gentlewoman from Washington (Ms. Dunn). Ms. DUNN. Mr. Speaker, after serving on the House Committee on Ways and Means for the past 3\1/2\ years, I am continuing to be amazed by the outrageous provisions that are involved in our current income Tax Code. In no small part, many of these provisions that are a function of the Tax Code have spiraled out of control. The irony is that while our Tax Code has just about 7 million words, it lacks two regular words, and those words, Mr. Speaker, are common sense. The current income tax system is far too complex and it is a source of utter frustration for millions of hardworking Americans and for their families. Over the past few years I have heard from thousands of constituents in my district alone and they have talked to me about hundreds of problems they have experienced with the system of taxation. A common theme, as we all know, has been the intrusive nature of the Internal Revenue Service. I believe it is time for this issue to be brought out of America's kitchen and on to the committee calendars of the Congress. [[Page H4657]] Money magazine last year reported that not one of 45 professional tax preparers could accurately compute a hypothetical family's tax return. Fewer than one in four came within even $1,000 of the correct figure. How can we expect average citizens to comply with a code when licensed professionals, who have spent years studying the system, cannot even get it right. Not only this, but the cost of compliance for the average family is horrendous. Each year Americans devote 8 to 10 billion hours complying with our Tax Code. This amounts to over 5 million Americans working all year long, the equivalent of the entire work force of my State, Washington State, of Iowa and Maine. The cost of complying totals about $200 billion annually, or $700 for each, man, woman and child in America. These are just the numbers associated with following the law. The income tax system involves a number of other costs, including those associated with enforcement and collection, as well as the cost of tax litigation. Sunsetting the code will work. President Clinton described this plan as reckless or irresponsible. Actually, as the President should know, it is common practice. Major Federal Government programs, such as spending on highways, education and agriculture, regularly expire and are rewritten in 5-year increments. This is a strategy also used by the States, who understand that change will not occur unless they break through the gridlock. This is exactly how this legislation to sunset the Tax Code will work. There is a national debate going on outside the Congress, Mr. Speaker, on the direction of the Tax Code. We have a terrific opportunity here today to improve the Federal system of corporate and personal income taxation in a manner that will both significantly improve the economic performance of our Nation and substantially reduce the compliance and administrative burden on American families. By scrapping this code, we will bring this debate into focus and force ourselves to discuss this issue. I urge its support. Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from Washington (Mr. McDermott). (Mr. McDERMOTT asked and was given permission to revise and extend his remarks.) Mr. McDERMOTT. Mr. Speaker, it is really hard to come down here and be serious about this kind of thing. No one likes to pay taxes, no one likes to have to sit down once a year and send money to the government to run it, but what we have today, in an effort to tap voter discontent by the Republicans, is a cheap campaign prop. This is a bumper strip we are doing today, that is why it is only about two sentences long. In order to take this seriously, we have to go back to a satirist who used to write for the Baltimore Sun by the name of H. L. Mencken. H. L. Mencken called the American public ``Boobis Americanus''. That is, they are all stupid. Now, in order for my colleagues to come with a bill like this, they have to think the American people are stupid; that they simply do not know what is going on. If we say to the American people that right now we spend $1,200,000,000 and we are going to wipe all that out and we are going to get it from somewhere else; now, where are they going to get it from? The moon? Or from somebody else? This sounds like a bill based on the Senator Long theory of, ``Don't tax you, don't tax me, tax that guy behind a tree.'' The American public knows there has to be a Tax Code if we are going to have the kinds of goods and services that we want in this country: Social Security, Medicare, highways, national defense. My colleagues are not going to get rid of the money. They simply are creating the illusion for people that they will come up with a Tax Code that will not tax them, it will tax somebody else. Well, how stupid do my colleagues think the American people really are? They know that their deduction for their interest on their house they get now. My colleagues are not guaranteeing them anything on their house. My colleagues are not guaranteeing that their employer can deduct paying for health care for them. The average employer today, if he spends $100 on health insurance, actually costs him $65. If we repeal the code, it costs $120. Now, I know my colleagues will say, oh, we are going to take care of that. Well, if my colleagues are going to take care of it, why do they not put a proposal out here to simply say that they are going to wipe out the code and come back some day, some uncertain time? The gentleman from California (Mr. Stark) raised another issue which my colleagues really are not thinking about. The Republicans are creating chaos in this country, in the business community planning. No businessman can plan 3 years out. {time} 1300 The problem with us is we plan 2 years out. Business plans 5, 10, 20. They want chaos. This is a bad piece of legislation. Seeking to tap into voter discontent about the complexity of the tax code, the Republican leadership today is disregarding the major issues confronting our nation in order to turn the House Floor into a cheap campaign prop. So while this bunch wastes your tax dollars by ranting, raving and campaigning about how they want to ``rip the tax code up by its roots''--without having any idea what tax system they want to replace it with--I am going to talk about what impact this rhetoric will have on real people. In particular, what this extremist legislation will mean to the ability of Americans to purchase affordable health care. Before I begin, it is important to note that the same people in the Republican majority currently peddling this ``scrap the code'' rhetoric, just last fall voted to add hundreds of new pages to the tax code and a myriad of new complex tax computations. Because of last year's tax law, this bunch added 35 new lines alone to taxpayers capital gains tax forms. So, keep that in mind that when you hear this bunch talk about tax simplicity--they are the ones who 6 months ago made the tax system a whole lot more complex. Most disturbing in their ``scrap the code'' rhetoric is the proposal to establish a rhetorically pleasing, yet critically flawed ``flat tax.'' This plan is often criticized because of its substantial revenue losses, its unfair redistribution of the tax burden, and its elimination of subsidies for home ownership. This push for the flat tax may help Republicans at the polls, but for the millions of American workers who need affordable health insurance, the flat tax is disastrous. While not necessarily ``news'' to the 42 million uninsured and the 29 million more who are underinsured in this country, there is no question that the group of workers and early retirees who will get hurt by the flat tax are the same ones who are currently being threatened by rising health costs in this country. A recent study by the National Coalition for Health Care found that between 1985 and 1997, the cost of health care doubled and it is expected to double again in the next decade. Next year alone, health premiums are estimated to rise between 5 and 10 percent--a rate at least twice that of the increase in benefits and wages. The number of uninsured in this country will exceed 42 million next year and by 2005, it is estimated that one in five Americans under the age of 65 will be without health insurance. The impact passage of the flat tax will have on worker's health insurance would be devastating. Under current law, there are substantial income tax incentives for employer-provided health benefits, with additional tax-benefits available to the self-employed who purchase health insurance. Employer-provided health benefits are exempt from income tax, Social Security, and Medicare employment taxes. For example, under the current system, the after-tax cost to an employer that provides $100 in health benefits to their employees is $65. Yet, the flat-tax plan destroys this health insurance incentive by increasing the employer's after-tax cost to $120. Under the flat tax's domestic business tax, amounts paid for non-cash fringe benefits, such as health care, are not deductible. As a result, the plan would impose an onerous tax penalty on employers providing health benefits. This legislation goes a step further by including a new tax on tax-exempt charitable organizations and Federal, State, and local governments equal to 20 percent of the amount paid for health benefits for their workers. Health benefits to retired workers will also decline. Many companies have large and burdensome liabilities for retiree health benefits and in recent years, those same companies have tried to limit benefits. The likely response from employers to the flat tax's tax penalties will be a significant reduction in health care benefits available to its current, future, and retired workers. Just last year, MIT economist James Poterba warned that ending the tax preference for employers who provide health insurance would cause the number of American families without health insurance to increase by 20 percent! In fact, such a decline in employer-provided health benefits should not surprise anyone familiar with the history of the flat tax. [[Page H4658]] When the Kemp Commission first proposed adoption of the flat tax, even the Health Insurance Association of America--the same group that spent millions of dollars to kill expansion of health care coverage in 1994 and is on the verge of spending millions more to kill managed care safeguards--warned ``one of the unintended consequences of eliminating the exclusion for health insurance premiums is likely to be a rapid increase in the number of people without private health insurance coverage.'' If you want to terminate the tax code, it is vital that you understand the ramifications of each remedy. There's no question that ripping away crucial tax incentives will increase the cost of health care in this country. I find it amazing that instead of finding ways to improve the quality, affordability, and availably of health insurance, the Majority is using its control of Congress to make America's health care problems worse. Before you jump on the ``scrap the code'' bandwagon, think, for a second, abut what this legislation will mean to the affordability of health car for America's workers, their families, and their employers. Unfortunately, it's clear form this debate that all this bunch is interested in doing is devaluing the legislative process of our democracy in order to create a simplistic bumper-sticker slogan in time for November's elections. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Pennsylvania (Mr. English). Mr. ENGLISH of Pennsylvania. Mr. Speaker, I thank the gentleman for yielding me the time. Mr. Speaker, our tax system hangs like an albatross around the neck of the American taxpayer, stifling savings and productive investment, and arbitrarily punishing or subsidizing activity and making the process of paying taxes nightmarishly complex even for those of modest means. In my view, the time has come to replace our current tax system. But we will never do it unless we overcome the inertia of the legislative process, unless we override the influence of the entrenched special interests who have a stake in the complexity of the Tax Code and who savor gridlock on this issue, and unless and until we force the issue and put everyone's feet to the fire. We propose to do that today. I rise in strong support of the Tax Code Termination Act, legislation that will finally give American taxpayers a solid time line for fundamental tax reform. Mr. Speaker, I have been a strong advocate of replacing our current Tax Code with a system that is fairer, radically simpler, eliminates the bias against savings, and will allow the U.S. to be more competitive internationally. I am prepared to accept the challenge of the gentleman from California to put forward my proposal this year. But replacing the Tax Code will be an enormous undertaking, and the time line for consideration should not be put off one more day. I challenge my colleagues, if they do not believe we can replace the current Tax Code with something simpler and fairer that will meet the needs of the American public, then vote against this bill. If they feel that any tax reform inevitably is going to be an improvement, as I do, vote for this legislation and put our feet to the fire. Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from Maryland (Mr. Cardin). Mr. CARDIN. Mr. Speaker, I rise in opposition to the current Tax Code and in support of comprehensive reform of our Federal tax system. I, too, agree that our Federal tax system is too complex, it is not efficient, it costs our taxpayers too much to comply with it, it is not sensitive for savings, we rely too much on income taxes. But the legislation before us is one of the strangest notions I have encountered in the 12 years I have served in this body. The bill is a result of frustration in our current tax structure, and it tells a Congress in the future to do something about it. We have had 4 years under Republican leadership to try to do something about our Tax Code. In this term, I thought we were going to do something. Last year, in a bipartisan way, we joined Democrats and Republicans to reform the Internal Revenue Service. We thought that bill would pass last year. It is still lingering within a conference committee. If we want to do something, why are we not using the time today to at least reform the IRS and deal with the tax collecting agency? But instead, no, we are debating some myth about what we are going to do in the future. It is outrageous. It is not even a fig leaf. We have not had a hearing on this proposal. We do not know what it is all about. Why are we not debating specific proposals on this floor? Mr. Speaker, yesterday in the Baltimore Sun, my local paper, I authored an article about why I thought a VAT tax is better than a flat tax and why we do not need a corporate income tax and we should be encouraging more savings. Why are we not having that proposal on the floor today and debating? Why is the Republican leadership not giving the American public real reform rather than bringing up a hope of what is going to happen 4 years from now, causing all types of panic about people trying to plan for their futures. People are trying to figure out how to save for their retirement. They want to know what the tax rules are going to be. And we are going to tell them, we are going to change them, but we are not going to tell them what it is going to be? How irresponsible. How wrong. Use the time we have. This schedule this year has been embarrassing. We have not been here most of the time. Why are we not using the time this year to have a serious debate on tax reform rather than bringing up this sham? It is wrong. They know it is wrong. This is not the right way to go. I urge my colleagues to defeat the bill. Mr. Speaker, I rise in opposition to the current tax code, and in support of a real debate on comprehensive reform of the federal tax system. The legislation before us is one of the strangest notions I have encountered in the twelve years I have served in this House. The bill is the result of frustration with the current tax system. Normally, when members of Congress seek to change existing law, they introduce legislation to make the changes they support. But this bill doesn't do that. We are here, in the 105th Congress, debating a bill that says that the tax code is such a mess that the 107th Congress should do something about it. That's not a serious proposal for simplifying the tax code. Instead of real tax reform, it is just an empty promise. Yesterday, the op-ed page of the Baltimore Sun, my home town newspaper, printed my article titled ``Why a VAT tax is better than a flat tax.'' The article presented my view that we should replace the existing tax code with a broad-based consumption tax, and relieve 75 million Americans of the burden of the individual income tax. I support repeal of the corporate income tax. Some members of the House will agree with my position; others will disagree. We should begin this debate now, rather than putting it off until the year 2002. We need to reform the tax code, and when we have done our jobs, and written a tax code that does not punish the American people, I will be proud to join in voting to sunset the existing code. Until then, Mr. Speaker, this process is nothing but talk. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Sam Johnson). (Mr. SAM JOHNSON of Texas asked and was given permission to revise and extend his remarks.) Mr. SAM JOHNSON of Texas. Mr. Speaker, we have had hearings, and 2\1/ 2\ years ought to be long enough for the people of the United States to speak and determine what tax they want. The current Tax Code is complex, confusing, corrupt, costly, coercive, and a lot of other Cs that I cannot think of. But so far there is a lot of talk and no action. When it comes to tax reform, a sunset date will force us to take action and relieve the American taxpayer. We ought to also repeal the 16th Amendment of the Constitution, and I have introduced a bill to do such a thing, the Tax Freedom Act. It outlaws Congress' ability to collect taxes on income except in time of war. Both these bills accomplish one common goal. No matter whether you support a flat tax, consumption tax, value-added tax, national sales tax, blue, black, brown, whatever, the common goal is replacing the current complicated Tax Code. Fundamental and comprehensive tax reform will be one of the most profound changes this Nation experiences this century. The Tax Code Termination Act brings us one step closer to achieving that change and restoring freedom to the American taxpayer. Americans want, need, and deserve to get rid of IRS oppression. We have been [[Page H4659]] talking about tax reform for years. Mr. Speaker, it is time to quit talking and start action, and this bill does just that. Mr. RANGEL. Mr. Speaker, I am reminded that when Dr. Frankenstein created his monster, he went immediately to trying to get rid of it. And, so, as the Republicans pass this tax bill, this is the same bill they want to pull up and pull up by the roots. Gentlemen, it is your bill. Do with it what you want. Mr. Speaker, I yield 3\1/2\ minutes to the gentlewoman from Connecticut (Mrs. Kennelly). Mrs. KENNELLY of Connecticut. Mr. Speaker, I rise in strong opposition to this legislation to terminate the Internal Revenue Code without replacing it with a system that is fairer, that is simpler, and encourages economic growth. I come from a State, a small State, Connecticut. But in that State, we have 18 of the Fortune 500 companies. Now, I can just imagine a conversation between a CEO and a board of directors when they hear that this bill is passed, because he or she would have to explain to the respective boards of directors how millions, and in some cases billions, in assets will disappear from their corporate balance sheets because of this legislation. The chief financial officer will have to explain there is nothing that can be done to prevent this because the Congress passed a bill to eliminate the Code and did not replace it with anything. And as a result of this bill, excess foreign tax credits would disappear, reducing the company's net worth. As we all know, foreign tax credits are carried as assets in today's corporate balance sheets. As a result of this bill, the corporate alternative minimum tax credit carried forward would disappear, reducing the company's net worth. Of course, as we know, the corporate alternative minimum tax credits are carried as assets on today's balance sheets. And as a result of this bill, research and experimentation credits would disappear, because as we know, R credits are carried as assets and those would just go away. As a result of this bill, deferred tax assets representing retiree health obligations would disappear, reducing the company's net worth. Not to mention providing retiree health benefits would then disappear because they could not write them off. The Financial Standards Accounting Board happens to require companies to charge retiree health obligations against current earnings. Retiree health obligations are deductible when actually paid. These deductions carried on today's corporate balance sheets are deferred tax assets. They would disappear. And as a result of this bill, operating loss carried forward would disappear, reducing the company's net worth. Net operating loss carried forward are carried as assets on today's corporate balance sheets. Unfortunately, many of these CEOs are going to find themselves explaining more than one of these things. In a few cases, the loss of the impact on these changes on the balance sheets could result in a profitable company losing all their positive net worth. Because this is the fact of the Code as it exists today, and if we do not replace it with something, all these things happen. I thought the majority in this Congress was opposed to takings. But, as I read this list, I guess not. But it gets worse. While the CEO needs to explain to the board that the business plan is no longer operative, the small businessman finds he is facing the same problem. A businessman or businesswoman would have to realize the rate of return on capital can no longer be projected. She has no idea how the company should calculate labor costs. She has no idea how to determine the most efficient financing mechanism for the new building that they will have purchased. They have no idea of the period over which the new equipment could be depreciated. I wonder how many CEOs would lose their jobs or how many small businesses would go out of business. It is because of these concerns, very real concerns, and I have been on the Committee on Ways and Means for now 13 years, that the National Association of Manufacturers are opposed to this bill. The Internal Revenue Code is far from perfect. We all know it. But if we are going to eliminate it, replace it with something that is simpler, fairer, and encourages economic growth. That is all we ask today. Do the whole job, not just half of it. Mr. BUNNING. Mr. Speaker, I yield 3 minutes to the gentleman from Colorado (Mr. Dan Schaefer). (Mr. DAN SCHAEFER of Colorado asked and was given permission to revise and extend his remarks.) Mr. THOMAS. Mr. Speaker, will the gentleman yield? Mr. DAN SCHAEFER of Colorado. I yield to the gentleman from California. Mr. THOMAS. Mr. Speaker, if we would listen to the gentlewoman from Connecticut (Mrs. Kennelly), who just spoke, what we would have to believe is that the business world did not exist prior to the invention of the Internal Revenue Tax Code; that corporations offer health care only because they get a tax deduction; without the tax deduction, there would be no compassion on the part of the owner to the worker; and that all of the complications that a CEO would have to deal with, in fact jeopardizing their job, are essential to running a business. What in the world did business do before there was an Internal Revenue Service? Mr. DAN SCHAEFER of Colorado. Mr. Speaker, during my 15 years here in the House, literally thousands of taxpayers have contacted me to express their frustration with the current code that we have. The Tax Code is so complicated that even those who call themselves tax experts cannot figure it out. Let me give my colleagues a good example. Last November, Money Magazine gave 45 accountants nationwide a financial profile of a fictional family and asked them to prepare a hypothetical tax return. Not only did all 45 come up with different answers, but the computed tax liability ranged from $36,000 to $94,000. No one knows whether they are illegal or not illegal anymore when they file their returns. Today, the average family pays more in taxes than it spends on food, clothing, and shelter combined. As a whole, Americans will spend at least $200 billion and over $5 billion complying with the income tax this year alone. This is more time than it takes to produce every car, truck, and van in the United States each year. Tracking all this paperwork requires the Internal Revenue Service, five times larger than the Federal Bureau of Investigation. And unlike the FBI, the IRS's power is nearly absolute. It may search our property and records without a court order. And although both the House and Senate have overwhelmingly passed substantial IRS reform bills, I do not believe that that alone will prove successful. Over the past several years, I have talked to audiences nationwide about the case of replacing the Federal income tax with a national sales tax. Two years ago we introduced the National Retail Tax Act of 1996, and just last year reintroduced it again in H.R. 2001. This legislation is going to abolish the IRS completely, eliminate corporate taxes, gift taxes, capital gains tax, inheritance taxes, gift taxes, and all excise taxes unless they are tied to a trust fund. I think this is the way to do it. Let us for once take the power of taxation away from Congress, give it to the American people, and let then decide. And once and for all, let us eliminate 8,000-plus pages in the Tax Code and replace it with a Tax Code that is going to say April 15 is another bright, spring day. Mr. RANGEL. Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman from Michigan (Ms. Stabenow). Ms. STABENOW. Mr. Speaker, I rise today to urge a no vote on the bill, but to first indicate that I have voted for IRS reform that we are still waiting to pass this Congress. I support real tax reform. And I would even support a deadline if there were alternatives proposed by the other side, by the majority, that were good for hard-working men and women in my district. {time} 1315 Mr. Speaker, before coming to Congress, I served for 16 years on the tax and finance committees in the Michigan legislature. I supported and sponsored numerous tax cut bills. But in [[Page H4660]] each case, they were making things better for the middle-class families, family farmers and small business people that I represented. Unfortunately in this case, the alternatives proposed by the majority are even worse, even more unfair than the current system. For instance, a national retail sales tax, which is also a use tax on professionals and entrepreneurs, would, according to the tax analysts, raise the cost of buying goods and services something close to 30 percent when all is figured. Houses, cars, food, prescription drugs for our senior citizens, on and on. Insurance premiums. It goes on and on. In addition to that, it would tax doctor's visits. It would tax accountant's visits. It would create a situation where every small business person and entrepreneur in my district, every professional, would have to become a tax collector. I do not call that better than what we have right now. Let us really fix it and really do something that is better by proposing a real alternative. In addition, the flat taxes that have been proposed by the other side just shift from wealthy individuals to the middle-class families in my district. Mr. Speaker, I want to see something simpler. I want to see reform. But let us do it in a way that does not involve the proposals coming from the other side which are not good certainly for the people that I represent in Michigan. I would urge a ``no'' vote on the bill. I would urge my colleagues instead to do what we did last year. Let us join together in a bipartisan way. We passed a balanced budget amendment. We passed tax cuts last year. Let us join together and create real reform for the real hard-working families, middle-class Americans that deserve the relief in this country. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Minnesota (Mr. Peterson). Mr. PETERSON of Minnesota. Mr. Speaker, I rise today in support of the Tax Code Termination Act. I have been in favor of scrapping this code and starting over for a long time. I am one of the few Members of this body that is a certified public accountant that has actually done tax returns for a living and have lived with this code for a long time. This Congress, under both parties, has contributed to this problem. The people on my side of the aisle might have a good point. I say to them that if they do not like this method of trying to get at this problem, then put something else forward. I think it makes sense for us to come up with a date certain. We did that when we balanced the budget and it helped us focus our attention. We have a date certain on when we are going to overhaul this Tax Code. I think it helps us. But, as I have said, I have been for reforming this system ever since 1986 when, under the guise of tax simplification, we passed a bill which I think was arguably the worst piece of legislation that has ever been passed in this Congress. We made it worse in 1990, and we made it worse last year when they passed the 1997 tax act to the point where my partner, who is still doing tax returns, told me this weekend that this is so complicated that he does not think he can any longer do a tax return by hand. The only way he can do a tax return is if he has a computer to be able to make all these computations and go back and forth. Mr. Speaker, this code has gotten completely out of hand. It needs to be simplified. It is not happening under the current process. I am not sure this is the best process in the world but it is the only thing we have in front of us today. I am in favor of overhauling the code. I think the way we do that is we start from scratch, with a clean slate, and then try to build up something that is simpler and makes more sense. I support this bill and encourage everybody's support. Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from Wisconsin (Mr. Kleczka). Mr. KLECZKA. Mr. Speaker, I rise in strong opposition to the proposal today; however, I do support simplifying the Tax Code. Mr. Speaker, what we are involved in this afternoon is a new form of roulette. This afternoon we are playing Gingrich roulette. I say to all Members, it is a most dangerous game. Mr. Speaker, I happen to serve on the Committee on Ways and Means. This bill comes before us with no hearings, no committee deliberations, no contingency plans should we not have a new Tax Code ready by July 4, 2002. So what we are doing is we are just shooting in the wind, hoping that Congress can develop a whole new Tax Code that is better than the current system. Let us talk about the current system for a moment. The gentleman from Oklahoma brings forth the 6,000 pages that he claims to be the Tax Code. Where does he think that came from? How many pages of that Tax Code give tax relief to my constituents? Oh, some do. There are some child credit tax provisions in there, there are some earned income tax credit provisions in there, but know full well the bulk of that document you have before the House today is there for the benefit of the moneyed special interests in this country. How many pages did Ronald Reagan and his 8 years add to the Code? Of the 6,000, I will bet 2,000. How many did President Bush and his administration add to the Code? Probably more than one thousand. But no Republicans are coming up and decrying those enormous and complex additions to the Tax Code. Why? Because all that is good Tax Code. It is good Tax Code because many of those provisions apply to your constituents. While I am talking about your constituents, let me congratulate you on a very successful fund-raiser last night. Mr. Speaker, I am told that you folks raised in excess of $10 million last evening alone. All the wealthy people that showered you with that money were there because they were crying out for tax fairness? Who do you think you are kidding? Those folks who pumped $10 million into the coffers of the Republican Party are part and parcel of that Tax Code. And their presence last night to eat your chicken was a hearty thank-you. But now you stand before us cleansed and pure decrying, ``We don't like the Tax Code because it is too complex and too unfair.'' But what are you going to tell the folks when you go to your parades on July 4 and you see their little Johnny or Jane and you hug them and say, ``Your family will get an extra $400 for each of them because we passed a child tax credit for you.'' They say, ``Yeah, but you also passed this bill that will take the credit away from us. What's going to happen to the child credit in 2002?'' ``I don't know.'' How about the home mortgage deduction? Every constituent of yours that owns a home wants that deduction retained. They may ask the gentleman from Oklahoma, ``What is going to happen in 2002 with that?'' ``I don't know.'' Mr. Speaker, I do not know what you guys are doing here today. But, again, congratulations on the $10 million fundraiser last night. You did a good job. Mr. BUNNING. Mr. Speaker, I yield myself 15 seconds. It is better than taking money from the Chinese government. Mr. Speaker, I yield 2 minutes to the gentleman from Washington (Mr. Metcalf). Mr. METCALF. Mr. Speaker, this legislation defines the Republican commitment to reduction of the tax burden on working Americans and thereby taking a mighty step toward ensuring a brighter future for people of all income levels. I am proud to be an original cosponsor of the Tax Code Termination Act. This legislation will provide for the abolition of the current unfair and burdensome Tax Code by 2001. This legislation does not carelessly abolish our current structure. Instead, the legislation requires the enactment of a replacement code by Independence Day, and that is a fitting day for this, 2001, that will be a fairer, simpler tax and reduce the tax burden on all Americans. Mr. Speaker, the current Tax Code has simply become too big and too complex to correct. You cannot fix it. All Members of the House should join us to replace the current Tax Code with a system that is fairer, less complicated and takes less money from working Americans. Mr. RANGEL. Mr. Speaker, if there is anybody in this body that knows of anyone that has taken money from the government of China, they would be aiding and abetting and involved as an accomplice in a felony unless they reported it to our Attorney General. [[Page H4661]] Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Matsui). Mr. MATSUI. Mr. Speaker, I thank the gentleman from New York for yielding me this time. Mr. Speaker, it is really hard to take this whole issue seriously this afternoon. We all know that it is not going to become law. It is going to pass out of the House but the Senate will not take action on it. That is why we are not seeing lobbyists clamber down on Capitol Hill. That is why we are not seeing letters to the editor. That is why we are seeing no stories in the major newspapers throughout the country. This is really a political opportunity for one of the parties. This is not going to become law. So it is really hard to get particularly pushed out of shape or excited or concerned about this. It is just not going to become law. Because the reality of the situation is that those that are advancing this particular proposal really in 1997 added thousands of pages to the Tax Code. In fact, we have added in 1997 when the Republicans were in control of the Congress 285 new sections to the Tax Code, 824 new amendments to the Tax Code. This is just in 1 year. There are now five ways, five separate ways to do capital gains. In fact, Schedule D, which had 23 lines, now has 54 lines, and it really does take H Block to really figure it out. The average person cannot do their taxes. Most of them do not have capital gains so they do not have to worry about it. In addition to that, there are now two different way to do IRAs, a back-ended way and a front- ended way. In addition, you can convert over, but you better make sure you understand your economic situation before you do. We also have a number of different ways either to take a credit or a deduction if you are a student. Should the student take it? Should the student's parents take it? Should the grandparents take it? We have really added complexity to the Code. The 1997 bill was probably the worst tax bill the United States has ever had, because it added more complexity to the Code than we have had in the last 25 years. And so this is not a real exercise in good government. This is really a show game. I have to say that if it were taken seriously, I think people in this country today would be really concerned. You would have to say, shall I buy a house because I get a deduction on my home, and that is an incentive, that reduces my taxes. But obviously if we changed the Code or the Code is eliminated in 3 years, I may lose that deduction and all of a sudden I might not be able to make my monthly payments on my other expenses. But no one is saying that, because this is not a serious effort. It is really a shame. We are going to be in until midnight tonight and we are not going to take any really substantive action. The irony of it is that we have 13 appropriations bills that are supposed to pass, we have a budget, but we do not have it out of the House yet. Not one appropriations bill has been taken to this body. There has been no budget reconciled between the House and the Senate. It was supposed to be done on April 15. Here we are at June 17, 2 months later. It is amazing. It is absolutely amazing that we are wasting our time engaged in this kind of activity that has no relevance, no value and certainly it is something that is a political exercise that I think the American public will eventually get disgusted with. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Hall). (Mr. HALL of Texas asked and was given permission to revise and extend his remarks.) Mr. HALL of Texas. Mr. Speaker, I want to be logical about this. I have thought a lot about it. I rise today in support of the Tax Code Termination Act. I rise at a time when we are doing better. We are doing better from the standpoint of economics. You can sell a piece of property now. People can find a job. We have got the lowest inflation. We have the lowest unemployment. Knowledgeable economists have told us that we have the best economy we have had since the late 1940s and early 1950s when we had the strongest financial position and strongest geopolitical position in the history of this country. So I guess you have to ask, why? Why are we where we are? I think the President, the present President thinks that he caused it. I think Mr. Dole probably think he did. I think Mr. Bush thinks it is something he put into motion. But really and truly I believe it is because we are just now getting over the lousy 1986 so-called Tax Reform Act. A lot of us have talked enthusiastically over the past few years about the need to replace our current tax with one that is more equitable, one that is more fair. Specific proposals for both a flat tax and a sales tax replacement have been debated throughout this country by proponents of these plans. A lot of us have signed on to both of these bills. The IRS administered Tax Code does not work. It has been the source of endless anguish, unfairness, confusion and the invasion of privacy for a lot of hard-working, well-intentioned Americans. In the interest of fairness, however, I must say it is only accurate to note that many hard-working and honest employees of the U.S. Treasury Department have been embarrassed and appalled by some of the testimony by their fellow employees during congressional hearings on IRS abuses. So I think they know from within that we need to do something about the Tax Code that we have. We have to recognize the fact that our Tax Code has facilitated, and in many cases encouraged outrageous abuses while escaping all attempts at reason and justice. The American people deserve the right to know when it will end. We need to be able to collectively undertake this important goal as opposed to a mere debate. {time} 1330 Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from New York (Mr. Houghton). (Mr. HOUGHTON asked and was given permission to revise and extend his remarks.) Mr. HOUGHTON. Mr. Speaker, I am not going to take long here, but I do think that this is something which I would like to share an idea or two with my colleagues. Let me tell them a story. There was a man called Robert Ruark, and he wrote a story called ``Something of Value'' which talked about the end of colonialism in Africa and the total chaos, and the reason there was chaos is that there was nothing to take the place of the old governments. And I think he said we could say as almost a general statement, ``When you take something away, you must be able to put something in its place.'' Now I do not consider this a political argument at all. I consider this an argument of technique. Some people think that the idea of forcing an issue is the better way to get to an end rather than logically taking a look at what the steps are in order to get where we ultimately want to be. I do not think anybody is happy with this Tax Code. I do not think anybody is happy, as my colleagues know, really since the days of our Lord when the Publicans were running around. I say ``Publicans,'' not ``Republicans,'' were going around and trying to collect taxes. But really the question is: What is out there? I think we must exert an element of judgment here. As my colleagues know, to force something without anything at the end, and let us say at the end of June in the year 2002 we have nothing; what do we do? Where do we go? How does somebody plan? Will there be Social Security? Will there be Medicare? Will there be anything else? No one really knows. Mr. Speaker, this is a very high stakes game, and to use a technique of forcing something without any anything on the other end I think is highly irresponsible, and therefore I think it is a bad measure and something which we should vote against. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentlewoman from Wyoming (Mrs. Cubin). Mrs. CUBIN. Mr. Speaker, I rise in strong support of H.R. 3097, the Tax Code Termination Act. I intend to vote for the passage of this legislation, not just because I am a cosponsor of the bill, but also because it makes sense. I have to just take exception with some statements by the speaker from California who talked about increasing people's taxes because of the possibility of not being able to deduct mortgage interest from their income and [[Page

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TAX CODE TERMINATION ACT
(House of Representatives - June 17, 1998)

Text of this article available as: TXT PDF [Pages H4654-H4677] TAX CODE TERMINATION ACT Mr. BUNNING. Mr. Speaker, pursuant to House Resolution 472, I call up the bill (H.R. 3097) to terminate the Internal Revenue Code of 1986, and ask for its immediate consideration in the House. The Clerk read the title of the bill. The SPEAKER pro tempore. The bill is considered read for amendment. The text of H.R. 3097 is as follows: H.R. 3097 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Tax Code Termination Act''. SEC. 2. TERMINATION OF INTERNAL REVENUE CODE OF 1986. (a) In General.--No tax shall be imposed by the Internal Revenue Code of 1986-- (1) for any taxable year beginning after December 31, 2001, and (2) in the case of any tax not imposed on the basis of a taxable year, on any taxable event or for any period after December 31, 2001. (b) Exception.--Subsection (a) shall not apply to taxes imposed by-- (1) chapter 2 of such Code (relating to tax on self- employment income), (2) chapter 21 of such Code (relating to Federal Insurance Contributions Act), and (3) chapter 22 of such Code (relating to Railroad Retirement Tax Act). SEC. 3. NEW FEDERAL TAX SYSTEM. (a) Structure.--The Congress hereby declares that any new Federal tax system should be a simple and fair system that-- (1) applies a low rate to all Americans, (2) provides tax relief for working Americans, (3) protects the rights of taxpayers and reduces tax collection abuses, (4) eliminates the bias against savings and investment, (5) promotes economic growth and job creation, and (6) does not penalize marriage or families. (b) Timing of Implementation.--In order to ensure an easy transition and effective implementation, the Congress hereby declares that any new Federal tax system should be approved by Congress in its final form no later than July 4, 2001. The SPEAKER pro tempore. Pursuant to House Resolution 472, the amendment in the nature of a substitute printed in House Report 105-580 is adopted. [[Page H4655]] The text of the amendment in the nature of a substitute is as follows: Strike all after the enacting clause and insert the following: SECTION 1. SHORT TITLE. This Act may be cited as the ``Tax Code Termination Act''. SEC. 2. TERMINATION OF INTERNAL REVENUE CODE OF 1986. (a) In General.--No tax shall be imposed by the Internal Revenue Code of 1986-- (1) for any taxable year beginning after December 31, 2002, and (2) in the case of any tax not imposed on the basis of a taxable year, on any taxable event or for any period after December 31, 2002. (b) Exception.--Subsection (a) shall not apply to taxes imposed by-- (1) chapter 2 of such Code (relating to tax on self- employment income), (2) chapter 21 of such Code (relating to Federal Insurance Contributions Act), and (3) chapter 22 of such Code (relating to Railroad Retirement Tax Act). SEC. 3. NEW FEDERAL TAX SYSTEM. (a) Structure.--The Congress hereby declares that any new Federal tax system should be a simple and fair system that-- (1) applies a low rate to all Americans, (2) provides tax relief for working Americans, (3) protects the rights of taxpayers and reduces tax collection abuses, (4) eliminates the bias against savings and investment, (5) promotes economic growth and job creation, and (6) does not penalize marriage or families. (b) Timing of Implementation.--In order to ensure an easy transition and effective implementation, the Congress hereby declares that any new Federal tax system should be approved by Congress in its final form no later than July 4, 2002. The SPEAKER pro tempore. The gentleman from Kentucky (Mr. Bunning) and the gentleman from New York (Mr. Rangel) each will control 1 hour. The Chair recognizes the gentleman from Kentucky (Mr. Bunning). General Leave Mr. BUNNING. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and include extraneous material on H.R. 3097. The SPEAKER pro tempore. Is there objection to the request of the gentleman from Kentucky? There was no objection. Mr. BUNNING. Mr. Speaker, I yield myself such time as I may consume to open the debate on this bill. Mr. Speaker, the Federal income tax system is broken beyond repair. We cannot tinker with it any longer and make it work any better. We need to wholesale reform and totally overhaul the system. There are two basic elements that are absolutely necessary for a Federal tax system. It must be understandable, and it must be fair. As it now stands, our Federal income tax fails badly on both counts. Our Tax Code has become so complex that no one can understand it. When tax experts cannot agree on how much an American taxpayer owes, how can we expect the average taxpayer to understand it? This complexity is expensive. It costs over $300 billion a year for taxpayers to comply with the Tax Code. That is money that is totally wasted. It does not benefit government or increase funding for essential services. It does not benefit the private sector or create investment, develop jobs, or improve the quality of life. It is just money down the drain. It is a crime. Our Tax Code is unfair. We have focused a great deal of attention this year on the marriage penalty, but this is just one of hundreds of inequities in the existing law. Over the years, Congress has created a hodgepodge of loopholes and arcane tax incentives, most of which were well-intentioned. But when you take them altogether and weed them into a 5\1/2\ million word tax code, it creates such a mess that only the very wealthy have the ability to take advantage of them. That creates unfairness. As a result, the American people have lost confidence in their tax system. Incremental change is not enough. We have tried that. It has resulted in failure and more complexity. We need real reform, a total overhaul of the Tax Code. We need to restore that confidence. That is what this bill is all about. It simply says that the sun will set on the Internal Revenue Code as we know it on December 31, 2002. It gives Congress 3 years to debate and develop a new tax system. It would simply force Congress to do in a timely manner what we need, no, what needs to be done, to pull the Federal income tax code out by its roots and replace it with an income tax system that is fair and understandable. This bill will help us do that. I urge my colleagues to support and vote for H.R. 3097. Mr. Speaker, I reserve the balance of my time. Mr. RANGEL. Mr. Speaker, I yield myself as much time as I may consume. (Mr. RANGEL asked and was given permission to revise and extend his remarks.) Mr. RANGEL. Mr. Speaker, this is a historic moment in the history because of our Congress, because I do not think that we will ever live to see a more irresponsible act committed by any Member of Congress. I know that this is an election year and so some leeway has to be given to the majority because, unfortunately, there is no institutional memory of them having passed any legislation this year. Being a politician myself, I can understand how they would like to capture the voters' imagination by doing something dramatic. But just to abolish the Tax Code, just to say that, by the year 2002, no tax shall be imposed by the Internal Revenue code, what a gift to give the American people. You will not have to pay any taxes until the Republicans, and do not laugh, until the Republican majority comes up with an idea as to how they are going to replace it. Let us think this one out. Who has been in charge for the last 3 years? Who had the majority? Who had the opportunity, really, to substitute this complex mess that they talk about? But rather than to come together, as if that is possible, with some type of a meaningful, fair tax code that would increase economic productivity for our great Nation and to continue to propel the prosperity that President Clinton has brought to us, they would rather just pull up the Tax Code by the roots. I assume that, while they are pulling it up by the roots, that this 800 pages of what they call a tax bill last year is mere fertilizer for the Tax Code that they are going to bring to us. Where are these great ideas that you have? Should the American people not have some idea as to where do you meet to come up with a new code? Years ago, Members would go to the Committee on Ways and Means. Now we go to the Committee on Rules. We have people just telling us what they are going to end, but no one is there to tell us what they are going to start. I have served on the Committee on Ways and Means for two decades. Every year, we had a tax bill; some good, some bad. For the last 3 years, we have not had anything that is coming up that is new. I want the Republicans to understand this, if they do not understand anything at all, they are in charge. They have a majority. They have the ability to call their troops together and vote for anything that they want, whether it is good or, in most cases, bad. But for God's sake, just with all due intention I did not bring the Bible, so I did not mean to say that, but for goodness sake, do not end something unless you tell the American people what do you intend to replace it with. We have business people that are planning now for the future. I would want them to call their Congressman, but since this issue is not being dealt with with the Congress, and since we do not know where the Tax Code is going to come from, and since the Committee on Ways and Means has lost jurisdiction, whoever meets with the Speaker should know what he is going to come up with. I would say, if people are planning for the future, whether they are going to have bonds out there, whether the States are going to have municipal bonds, where people want to know how to plan, call the Speaker, because I think he has some good ideas that he will not share with us. Second, if you are a hospital, church, synagogue, charitable organization, there is nothing in this bill that terminates that says you are going to be protected. I know the Republicans are going to protect them, so do not be afraid, but ask them how are they going to be protected. If we own a home and we have mortgage payments and we have been deducting them, we can deduct until the year 2000, and then we do not have to deduct anymore. [[Page H4656]] {time} 1245 Now, I do not know what happens, but we can call the Speaker and he will tell us what plans he has for mortgage deductions. And I tell my colleagues that, as complicated as this bill is, as bad as the Republican passed tax bill is, at least we know what we got. The fear is what are they going to come up with when for 3 years they have not even come up with a good idea. So I do hope that in the course of this debate that someone would come up with some kind of a plan that would give us some idea as to what they are going to fill this vacuum with. But I think killing the IRS, pulling it up by the roots, that the American people deserve better than just a bumper sticker. And if people do not like paying taxes and they think this is the solution, then I beg the Democrats in the minority, if they can just pass a law to keep us from paying taxes, why can we not pass a law to stop people from paying their debts? Why not? And if we do not like that, let us pass a law to terminate cancer. Let us think of something more exciting than our irresponsible brothers and sisters over here, and we will just say that if anyone votes against it, it means they support cancer; if they vote against it, they support paying back debts. I am ashamed that this is happening in the House, but I know the United States Chamber of Commerce and the local Chambers of Commerce around this country will study this termination bill and I hope we hear from them much before the election. Mr. Speaker, I reserve the balance of my time. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Oklahoma (Mr. Largent), one of the authors of the bill, to respond. Mr. LARGENT. Mr. Speaker, the previous speaker got one thing right, this is an historic moment. Understand, no one likes to be forced to do anything. My children do not like to be forced to make their bed and Congress certainly does not like to be forced to do anything. This bill simply does that, it forces Congress to quit talking about comprehensive tax reform and actually do something about it. And I would suggest to the previous speaker that maybe the reason he is in the minority and not in control is because it was his side that gave us this, the 6,200 pages that we currently know as the tax forms and instructions about how to file our tax returns today. And the gentleman is also right about another thing. The way it has always been done before is to go to the Committee on Ways and Means, in a small room in the back, and a few people decide about what the Tax Code should look like for the American people. What we are trying to do is to include all of the American people in the debate and in the discussion and in coming up with a comprehensive tax reform that is written not by a few people on the Committee on Ways and Means but is a consensus opinion of the American people and the business people in the communities around the country, the people that are suffering through 5.4 billion hours filing their tax return every year at a cost of somewhere over $200 billion just simply to comply with the current Tax Code. So the gentleman is right, we are trying to do it differently, we are trying to make sure it does not happen in the Speaker's room or in the Committee on Ways and Means but in the living rooms of the American people in this country, where they have a voice in the way their government writes a new comprehensive tax law. Mr. RANGEL. Mr. Speaker, I yield myself 1 minute to say to the distinguished gentleman that he keeps referring to that pile there as being something that has been put together by the Democrats. When we had a debate on the rule, I thought he said that this 800 pound tax document was passed by the Republican majority and he voted for it. So I would be glad to go over there and just put this on that pile. The second thing is that, we do not have to be another tax expert to know that the Congress should not be having to be forced to do anything. The majority should not have to force themselves to be responsible. All they have to do is take their consensus from the people and pass a decent, respectable, fair and equitable progressive tax bill. They should not force themselves to do it; just do the right thing. Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Stark). Mr. STARK. Mr. Speaker, I thank the gentleman for yielding me this time. We have talked today about the asininity of this bill, the sheer folly, the sophomoric sort of approach. I guess I would remind the people that it is the Republicans that shut down the government several times because they were unable to come up with a budget. I would challenge any Republican who has an idea, much less an idea of what they would do just in the oft chance they fail to come up with a bill. And even if they were to come up with a bill, they are not telling us what happens, say, in health care, an issue which they postulate a good bit about and posture about. The Armey flat tax bill, which they might choose, imposes tax penalties on employers that provide health care benefits to their employees. The Tauzin retail sales tax bill imposes a sales tax on people when they pay for health insurance and health care. I wonder if that is what they intend to do. The Republicans voted to increase the rate at which self-employed people could deduct their health care. This will end that. I presume that they really do not care, as they have not in the past, about providing health care to the 45 million uninsured. I am sure that they do not want to help employers pay for it, because I think they are indifferent. I am not sure that anyplace in the King James version of the Bible it suggests that employers should pay for health care benefits or that we should insure people. Therefore, some Republicans will tend to ignore the suffering that people have for lack of health care. The basic fact is that this is sheer irresponsibility, obviously drafted by people with no understanding of business or the Tax Code or economics, some things that are important to having the country's economy function. One of the things that many of my colleagues on the Republican side have been very assertive of is States rights. But what they do not understand is that this would also destroy many States' ability to raise any revenue. Many States that have an income tax parallel or mirror the Internal Revenue Code. And if in fact, as their bill suggests, we would stop collecting funds in the year 2002, we would, therefore, put these States out of business. And we would not have, obviously, any Federal money to support them. So they are impacting many States. The unintended consequences of this bill are legion. So that I want to remind my friends and colleagues that no one suggests that we should not reform the Tax Code. The last major reform was led by Ronald Reagan, at his insistence. Much of what is stacked over on that table was Ronald Reagan's suggestion, which we passed. And it was not a bad bill, I might add. Now, we have no bill and we have a nonsensical campaign bumper sticker, and I hope we vote it down and do not see this kind of embarrassing legislation brought again. Mr. BUNNING. Mr. Speaker, I yield 3 minutes to the gentlewoman from Washington (Ms. Dunn). Ms. DUNN. Mr. Speaker, after serving on the House Committee on Ways and Means for the past 3\1/2\ years, I am continuing to be amazed by the outrageous provisions that are involved in our current income Tax Code. In no small part, many of these provisions that are a function of the Tax Code have spiraled out of control. The irony is that while our Tax Code has just about 7 million words, it lacks two regular words, and those words, Mr. Speaker, are common sense. The current income tax system is far too complex and it is a source of utter frustration for millions of hardworking Americans and for their families. Over the past few years I have heard from thousands of constituents in my district alone and they have talked to me about hundreds of problems they have experienced with the system of taxation. A common theme, as we all know, has been the intrusive nature of the Internal Revenue Service. I believe it is time for this issue to be brought out of America's kitchen and on to the committee calendars of the Congress. [[Page H4657]] Money magazine last year reported that not one of 45 professional tax preparers could accurately compute a hypothetical family's tax return. Fewer than one in four came within even $1,000 of the correct figure. How can we expect average citizens to comply with a code when licensed professionals, who have spent years studying the system, cannot even get it right. Not only this, but the cost of compliance for the average family is horrendous. Each year Americans devote 8 to 10 billion hours complying with our Tax Code. This amounts to over 5 million Americans working all year long, the equivalent of the entire work force of my State, Washington State, of Iowa and Maine. The cost of complying totals about $200 billion annually, or $700 for each, man, woman and child in America. These are just the numbers associated with following the law. The income tax system involves a number of other costs, including those associated with enforcement and collection, as well as the cost of tax litigation. Sunsetting the code will work. President Clinton described this plan as reckless or irresponsible. Actually, as the President should know, it is common practice. Major Federal Government programs, such as spending on highways, education and agriculture, regularly expire and are rewritten in 5-year increments. This is a strategy also used by the States, who understand that change will not occur unless they break through the gridlock. This is exactly how this legislation to sunset the Tax Code will work. There is a national debate going on outside the Congress, Mr. Speaker, on the direction of the Tax Code. We have a terrific opportunity here today to improve the Federal system of corporate and personal income taxation in a manner that will both significantly improve the economic performance of our Nation and substantially reduce the compliance and administrative burden on American families. By scrapping this code, we will bring this debate into focus and force ourselves to discuss this issue. I urge its support. Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from Washington (Mr. McDermott). (Mr. McDERMOTT asked and was given permission to revise and extend his remarks.) Mr. McDERMOTT. Mr. Speaker, it is really hard to come down here and be serious about this kind of thing. No one likes to pay taxes, no one likes to have to sit down once a year and send money to the government to run it, but what we have today, in an effort to tap voter discontent by the Republicans, is a cheap campaign prop. This is a bumper strip we are doing today, that is why it is only about two sentences long. In order to take this seriously, we have to go back to a satirist who used to write for the Baltimore Sun by the name of H. L. Mencken. H. L. Mencken called the American public ``Boobis Americanus''. That is, they are all stupid. Now, in order for my colleagues to come with a bill like this, they have to think the American people are stupid; that they simply do not know what is going on. If we say to the American people that right now we spend $1,200,000,000 and we are going to wipe all that out and we are going to get it from somewhere else; now, where are they going to get it from? The moon? Or from somebody else? This sounds like a bill based on the Senator Long theory of, ``Don't tax you, don't tax me, tax that guy behind a tree.'' The American public knows there has to be a Tax Code if we are going to have the kinds of goods and services that we want in this country: Social Security, Medicare, highways, national defense. My colleagues are not going to get rid of the money. They simply are creating the illusion for people that they will come up with a Tax Code that will not tax them, it will tax somebody else. Well, how stupid do my colleagues think the American people really are? They know that their deduction for their interest on their house they get now. My colleagues are not guaranteeing them anything on their house. My colleagues are not guaranteeing that their employer can deduct paying for health care for them. The average employer today, if he spends $100 on health insurance, actually costs him $65. If we repeal the code, it costs $120. Now, I know my colleagues will say, oh, we are going to take care of that. Well, if my colleagues are going to take care of it, why do they not put a proposal out here to simply say that they are going to wipe out the code and come back some day, some uncertain time? The gentleman from California (Mr. Stark) raised another issue which my colleagues really are not thinking about. The Republicans are creating chaos in this country, in the business community planning. No businessman can plan 3 years out. {time} 1300 The problem with us is we plan 2 years out. Business plans 5, 10, 20. They want chaos. This is a bad piece of legislation. Seeking to tap into voter discontent about the complexity of the tax code, the Republican leadership today is disregarding the major issues confronting our nation in order to turn the House Floor into a cheap campaign prop. So while this bunch wastes your tax dollars by ranting, raving and campaigning about how they want to ``rip the tax code up by its roots''--without having any idea what tax system they want to replace it with--I am going to talk about what impact this rhetoric will have on real people. In particular, what this extremist legislation will mean to the ability of Americans to purchase affordable health care. Before I begin, it is important to note that the same people in the Republican majority currently peddling this ``scrap the code'' rhetoric, just last fall voted to add hundreds of new pages to the tax code and a myriad of new complex tax computations. Because of last year's tax law, this bunch added 35 new lines alone to taxpayers capital gains tax forms. So, keep that in mind that when you hear this bunch talk about tax simplicity--they are the ones who 6 months ago made the tax system a whole lot more complex. Most disturbing in their ``scrap the code'' rhetoric is the proposal to establish a rhetorically pleasing, yet critically flawed ``flat tax.'' This plan is often criticized because of its substantial revenue losses, its unfair redistribution of the tax burden, and its elimination of subsidies for home ownership. This push for the flat tax may help Republicans at the polls, but for the millions of American workers who need affordable health insurance, the flat tax is disastrous. While not necessarily ``news'' to the 42 million uninsured and the 29 million more who are underinsured in this country, there is no question that the group of workers and early retirees who will get hurt by the flat tax are the same ones who are currently being threatened by rising health costs in this country. A recent study by the National Coalition for Health Care found that between 1985 and 1997, the cost of health care doubled and it is expected to double again in the next decade. Next year alone, health premiums are estimated to rise between 5 and 10 percent--a rate at least twice that of the increase in benefits and wages. The number of uninsured in this country will exceed 42 million next year and by 2005, it is estimated that one in five Americans under the age of 65 will be without health insurance. The impact passage of the flat tax will have on worker's health insurance would be devastating. Under current law, there are substantial income tax incentives for employer-provided health benefits, with additional tax-benefits available to the self-employed who purchase health insurance. Employer-provided health benefits are exempt from income tax, Social Security, and Medicare employment taxes. For example, under the current system, the after-tax cost to an employer that provides $100 in health benefits to their employees is $65. Yet, the flat-tax plan destroys this health insurance incentive by increasing the employer's after-tax cost to $120. Under the flat tax's domestic business tax, amounts paid for non-cash fringe benefits, such as health care, are not deductible. As a result, the plan would impose an onerous tax penalty on employers providing health benefits. This legislation goes a step further by including a new tax on tax-exempt charitable organizations and Federal, State, and local governments equal to 20 percent of the amount paid for health benefits for their workers. Health benefits to retired workers will also decline. Many companies have large and burdensome liabilities for retiree health benefits and in recent years, those same companies have tried to limit benefits. The likely response from employers to the flat tax's tax penalties will be a significant reduction in health care benefits available to its current, future, and retired workers. Just last year, MIT economist James Poterba warned that ending the tax preference for employers who provide health insurance would cause the number of American families without health insurance to increase by 20 percent! In fact, such a decline in employer-provided health benefits should not surprise anyone familiar with the history of the flat tax. [[Page H4658]] When the Kemp Commission first proposed adoption of the flat tax, even the Health Insurance Association of America--the same group that spent millions of dollars to kill expansion of health care coverage in 1994 and is on the verge of spending millions more to kill managed care safeguards--warned ``one of the unintended consequences of eliminating the exclusion for health insurance premiums is likely to be a rapid increase in the number of people without private health insurance coverage.'' If you want to terminate the tax code, it is vital that you understand the ramifications of each remedy. There's no question that ripping away crucial tax incentives will increase the cost of health care in this country. I find it amazing that instead of finding ways to improve the quality, affordability, and availably of health insurance, the Majority is using its control of Congress to make America's health care problems worse. Before you jump on the ``scrap the code'' bandwagon, think, for a second, abut what this legislation will mean to the affordability of health car for America's workers, their families, and their employers. Unfortunately, it's clear form this debate that all this bunch is interested in doing is devaluing the legislative process of our democracy in order to create a simplistic bumper-sticker slogan in time for November's elections. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Pennsylvania (Mr. English). Mr. ENGLISH of Pennsylvania. Mr. Speaker, I thank the gentleman for yielding me the time. Mr. Speaker, our tax system hangs like an albatross around the neck of the American taxpayer, stifling savings and productive investment, and arbitrarily punishing or subsidizing activity and making the process of paying taxes nightmarishly complex even for those of modest means. In my view, the time has come to replace our current tax system. But we will never do it unless we overcome the inertia of the legislative process, unless we override the influence of the entrenched special interests who have a stake in the complexity of the Tax Code and who savor gridlock on this issue, and unless and until we force the issue and put everyone's feet to the fire. We propose to do that today. I rise in strong support of the Tax Code Termination Act, legislation that will finally give American taxpayers a solid time line for fundamental tax reform. Mr. Speaker, I have been a strong advocate of replacing our current Tax Code with a system that is fairer, radically simpler, eliminates the bias against savings, and will allow the U.S. to be more competitive internationally. I am prepared to accept the challenge of the gentleman from California to put forward my proposal this year. But replacing the Tax Code will be an enormous undertaking, and the time line for consideration should not be put off one more day. I challenge my colleagues, if they do not believe we can replace the current Tax Code with something simpler and fairer that will meet the needs of the American public, then vote against this bill. If they feel that any tax reform inevitably is going to be an improvement, as I do, vote for this legislation and put our feet to the fire. Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from Maryland (Mr. Cardin). Mr. CARDIN. Mr. Speaker, I rise in opposition to the current Tax Code and in support of comprehensive reform of our Federal tax system. I, too, agree that our Federal tax system is too complex, it is not efficient, it costs our taxpayers too much to comply with it, it is not sensitive for savings, we rely too much on income taxes. But the legislation before us is one of the strangest notions I have encountered in the 12 years I have served in this body. The bill is a result of frustration in our current tax structure, and it tells a Congress in the future to do something about it. We have had 4 years under Republican leadership to try to do something about our Tax Code. In this term, I thought we were going to do something. Last year, in a bipartisan way, we joined Democrats and Republicans to reform the Internal Revenue Service. We thought that bill would pass last year. It is still lingering within a conference committee. If we want to do something, why are we not using the time today to at least reform the IRS and deal with the tax collecting agency? But instead, no, we are debating some myth about what we are going to do in the future. It is outrageous. It is not even a fig leaf. We have not had a hearing on this proposal. We do not know what it is all about. Why are we not debating specific proposals on this floor? Mr. Speaker, yesterday in the Baltimore Sun, my local paper, I authored an article about why I thought a VAT tax is better than a flat tax and why we do not need a corporate income tax and we should be encouraging more savings. Why are we not having that proposal on the floor today and debating? Why is the Republican leadership not giving the American public real reform rather than bringing up a hope of what is going to happen 4 years from now, causing all types of panic about people trying to plan for their futures. People are trying to figure out how to save for their retirement. They want to know what the tax rules are going to be. And we are going to tell them, we are going to change them, but we are not going to tell them what it is going to be? How irresponsible. How wrong. Use the time we have. This schedule this year has been embarrassing. We have not been here most of the time. Why are we not using the time this year to have a serious debate on tax reform rather than bringing up this sham? It is wrong. They know it is wrong. This is not the right way to go. I urge my colleagues to defeat the bill. Mr. Speaker, I rise in opposition to the current tax code, and in support of a real debate on comprehensive reform of the federal tax system. The legislation before us is one of the strangest notions I have encountered in the twelve years I have served in this House. The bill is the result of frustration with the current tax system. Normally, when members of Congress seek to change existing law, they introduce legislation to make the changes they support. But this bill doesn't do that. We are here, in the 105th Congress, debating a bill that says that the tax code is such a mess that the 107th Congress should do something about it. That's not a serious proposal for simplifying the tax code. Instead of real tax reform, it is just an empty promise. Yesterday, the op-ed page of the Baltimore Sun, my home town newspaper, printed my article titled ``Why a VAT tax is better than a flat tax.'' The article presented my view that we should replace the existing tax code with a broad-based consumption tax, and relieve 75 million Americans of the burden of the individual income tax. I support repeal of the corporate income tax. Some members of the House will agree with my position; others will disagree. We should begin this debate now, rather than putting it off until the year 2002. We need to reform the tax code, and when we have done our jobs, and written a tax code that does not punish the American people, I will be proud to join in voting to sunset the existing code. Until then, Mr. Speaker, this process is nothing but talk. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Sam Johnson). (Mr. SAM JOHNSON of Texas asked and was given permission to revise and extend his remarks.) Mr. SAM JOHNSON of Texas. Mr. Speaker, we have had hearings, and 2\1/ 2\ years ought to be long enough for the people of the United States to speak and determine what tax they want. The current Tax Code is complex, confusing, corrupt, costly, coercive, and a lot of other Cs that I cannot think of. But so far there is a lot of talk and no action. When it comes to tax reform, a sunset date will force us to take action and relieve the American taxpayer. We ought to also repeal the 16th Amendment of the Constitution, and I have introduced a bill to do such a thing, the Tax Freedom Act. It outlaws Congress' ability to collect taxes on income except in time of war. Both these bills accomplish one common goal. No matter whether you support a flat tax, consumption tax, value-added tax, national sales tax, blue, black, brown, whatever, the common goal is replacing the current complicated Tax Code. Fundamental and comprehensive tax reform will be one of the most profound changes this Nation experiences this century. The Tax Code Termination Act brings us one step closer to achieving that change and restoring freedom to the American taxpayer. Americans want, need, and deserve to get rid of IRS oppression. We have been [[Page H4659]] talking about tax reform for years. Mr. Speaker, it is time to quit talking and start action, and this bill does just that. Mr. RANGEL. Mr. Speaker, I am reminded that when Dr. Frankenstein created his monster, he went immediately to trying to get rid of it. And, so, as the Republicans pass this tax bill, this is the same bill they want to pull up and pull up by the roots. Gentlemen, it is your bill. Do with it what you want. Mr. Speaker, I yield 3\1/2\ minutes to the gentlewoman from Connecticut (Mrs. Kennelly). Mrs. KENNELLY of Connecticut. Mr. Speaker, I rise in strong opposition to this legislation to terminate the Internal Revenue Code without replacing it with a system that is fairer, that is simpler, and encourages economic growth. I come from a State, a small State, Connecticut. But in that State, we have 18 of the Fortune 500 companies. Now, I can just imagine a conversation between a CEO and a board of directors when they hear that this bill is passed, because he or she would have to explain to the respective boards of directors how millions, and in some cases billions, in assets will disappear from their corporate balance sheets because of this legislation. The chief financial officer will have to explain there is nothing that can be done to prevent this because the Congress passed a bill to eliminate the Code and did not replace it with anything. And as a result of this bill, excess foreign tax credits would disappear, reducing the company's net worth. As we all know, foreign tax credits are carried as assets in today's corporate balance sheets. As a result of this bill, the corporate alternative minimum tax credit carried forward would disappear, reducing the company's net worth. Of course, as we know, the corporate alternative minimum tax credits are carried as assets on today's balance sheets. And as a result of this bill, research and experimentation credits would disappear, because as we know, R credits are carried as assets and those would just go away. As a result of this bill, deferred tax assets representing retiree health obligations would disappear, reducing the company's net worth. Not to mention providing retiree health benefits would then disappear because they could not write them off. The Financial Standards Accounting Board happens to require companies to charge retiree health obligations against current earnings. Retiree health obligations are deductible when actually paid. These deductions carried on today's corporate balance sheets are deferred tax assets. They would disappear. And as a result of this bill, operating loss carried forward would disappear, reducing the company's net worth. Net operating loss carried forward are carried as assets on today's corporate balance sheets. Unfortunately, many of these CEOs are going to find themselves explaining more than one of these things. In a few cases, the loss of the impact on these changes on the balance sheets could result in a profitable company losing all their positive net worth. Because this is the fact of the Code as it exists today, and if we do not replace it with something, all these things happen. I thought the majority in this Congress was opposed to takings. But, as I read this list, I guess not. But it gets worse. While the CEO needs to explain to the board that the business plan is no longer operative, the small businessman finds he is facing the same problem. A businessman or businesswoman would have to realize the rate of return on capital can no longer be projected. She has no idea how the company should calculate labor costs. She has no idea how to determine the most efficient financing mechanism for the new building that they will have purchased. They have no idea of the period over which the new equipment could be depreciated. I wonder how many CEOs would lose their jobs or how many small businesses would go out of business. It is because of these concerns, very real concerns, and I have been on the Committee on Ways and Means for now 13 years, that the National Association of Manufacturers are opposed to this bill. The Internal Revenue Code is far from perfect. We all know it. But if we are going to eliminate it, replace it with something that is simpler, fairer, and encourages economic growth. That is all we ask today. Do the whole job, not just half of it. Mr. BUNNING. Mr. Speaker, I yield 3 minutes to the gentleman from Colorado (Mr. Dan Schaefer). (Mr. DAN SCHAEFER of Colorado asked and was given permission to revise and extend his remarks.) Mr. THOMAS. Mr. Speaker, will the gentleman yield? Mr. DAN SCHAEFER of Colorado. I yield to the gentleman from California. Mr. THOMAS. Mr. Speaker, if we would listen to the gentlewoman from Connecticut (Mrs. Kennelly), who just spoke, what we would have to believe is that the business world did not exist prior to the invention of the Internal Revenue Tax Code; that corporations offer health care only because they get a tax deduction; without the tax deduction, there would be no compassion on the part of the owner to the worker; and that all of the complications that a CEO would have to deal with, in fact jeopardizing their job, are essential to running a business. What in the world did business do before there was an Internal Revenue Service? Mr. DAN SCHAEFER of Colorado. Mr. Speaker, during my 15 years here in the House, literally thousands of taxpayers have contacted me to express their frustration with the current code that we have. The Tax Code is so complicated that even those who call themselves tax experts cannot figure it out. Let me give my colleagues a good example. Last November, Money Magazine gave 45 accountants nationwide a financial profile of a fictional family and asked them to prepare a hypothetical tax return. Not only did all 45 come up with different answers, but the computed tax liability ranged from $36,000 to $94,000. No one knows whether they are illegal or not illegal anymore when they file their returns. Today, the average family pays more in taxes than it spends on food, clothing, and shelter combined. As a whole, Americans will spend at least $200 billion and over $5 billion complying with the income tax this year alone. This is more time than it takes to produce every car, truck, and van in the United States each year. Tracking all this paperwork requires the Internal Revenue Service, five times larger than the Federal Bureau of Investigation. And unlike the FBI, the IRS's power is nearly absolute. It may search our property and records without a court order. And although both the House and Senate have overwhelmingly passed substantial IRS reform bills, I do not believe that that alone will prove successful. Over the past several years, I have talked to audiences nationwide about the case of replacing the Federal income tax with a national sales tax. Two years ago we introduced the National Retail Tax Act of 1996, and just last year reintroduced it again in H.R. 2001. This legislation is going to abolish the IRS completely, eliminate corporate taxes, gift taxes, capital gains tax, inheritance taxes, gift taxes, and all excise taxes unless they are tied to a trust fund. I think this is the way to do it. Let us for once take the power of taxation away from Congress, give it to the American people, and let then decide. And once and for all, let us eliminate 8,000-plus pages in the Tax Code and replace it with a Tax Code that is going to say April 15 is another bright, spring day. Mr. RANGEL. Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman from Michigan (Ms. Stabenow). Ms. STABENOW. Mr. Speaker, I rise today to urge a no vote on the bill, but to first indicate that I have voted for IRS reform that we are still waiting to pass this Congress. I support real tax reform. And I would even support a deadline if there were alternatives proposed by the other side, by the majority, that were good for hard-working men and women in my district. {time} 1315 Mr. Speaker, before coming to Congress, I served for 16 years on the tax and finance committees in the Michigan legislature. I supported and sponsored numerous tax cut bills. But in [[Page H4660]] each case, they were making things better for the middle-class families, family farmers and small business people that I represented. Unfortunately in this case, the alternatives proposed by the majority are even worse, even more unfair than the current system. For instance, a national retail sales tax, which is also a use tax on professionals and entrepreneurs, would, according to the tax analysts, raise the cost of buying goods and services something close to 30 percent when all is figured. Houses, cars, food, prescription drugs for our senior citizens, on and on. Insurance premiums. It goes on and on. In addition to that, it would tax doctor's visits. It would tax accountant's visits. It would create a situation where every small business person and entrepreneur in my district, every professional, would have to become a tax collector. I do not call that better than what we have right now. Let us really fix it and really do something that is better by proposing a real alternative. In addition, the flat taxes that have been proposed by the other side just shift from wealthy individuals to the middle-class families in my district. Mr. Speaker, I want to see something simpler. I want to see reform. But let us do it in a way that does not involve the proposals coming from the other side which are not good certainly for the people that I represent in Michigan. I would urge a ``no'' vote on the bill. I would urge my colleagues instead to do what we did last year. Let us join together in a bipartisan way. We passed a balanced budget amendment. We passed tax cuts last year. Let us join together and create real reform for the real hard-working families, middle-class Americans that deserve the relief in this country. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Minnesota (Mr. Peterson). Mr. PETERSON of Minnesota. Mr. Speaker, I rise today in support of the Tax Code Termination Act. I have been in favor of scrapping this code and starting over for a long time. I am one of the few Members of this body that is a certified public accountant that has actually done tax returns for a living and have lived with this code for a long time. This Congress, under both parties, has contributed to this problem. The people on my side of the aisle might have a good point. I say to them that if they do not like this method of trying to get at this problem, then put something else forward. I think it makes sense for us to come up with a date certain. We did that when we balanced the budget and it helped us focus our attention. We have a date certain on when we are going to overhaul this Tax Code. I think it helps us. But, as I have said, I have been for reforming this system ever since 1986 when, under the guise of tax simplification, we passed a bill which I think was arguably the worst piece of legislation that has ever been passed in this Congress. We made it worse in 1990, and we made it worse last year when they passed the 1997 tax act to the point where my partner, who is still doing tax returns, told me this weekend that this is so complicated that he does not think he can any longer do a tax return by hand. The only way he can do a tax return is if he has a computer to be able to make all these computations and go back and forth. Mr. Speaker, this code has gotten completely out of hand. It needs to be simplified. It is not happening under the current process. I am not sure this is the best process in the world but it is the only thing we have in front of us today. I am in favor of overhauling the code. I think the way we do that is we start from scratch, with a clean slate, and then try to build up something that is simpler and makes more sense. I support this bill and encourage everybody's support. Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from Wisconsin (Mr. Kleczka). Mr. KLECZKA. Mr. Speaker, I rise in strong opposition to the proposal today; however, I do support simplifying the Tax Code. Mr. Speaker, what we are involved in this afternoon is a new form of roulette. This afternoon we are playing Gingrich roulette. I say to all Members, it is a most dangerous game. Mr. Speaker, I happen to serve on the Committee on Ways and Means. This bill comes before us with no hearings, no committee deliberations, no contingency plans should we not have a new Tax Code ready by July 4, 2002. So what we are doing is we are just shooting in the wind, hoping that Congress can develop a whole new Tax Code that is better than the current system. Let us talk about the current system for a moment. The gentleman from Oklahoma brings forth the 6,000 pages that he claims to be the Tax Code. Where does he think that came from? How many pages of that Tax Code give tax relief to my constituents? Oh, some do. There are some child credit tax provisions in there, there are some earned income tax credit provisions in there, but know full well the bulk of that document you have before the House today is there for the benefit of the moneyed special interests in this country. How many pages did Ronald Reagan and his 8 years add to the Code? Of the 6,000, I will bet 2,000. How many did President Bush and his administration add to the Code? Probably more than one thousand. But no Republicans are coming up and decrying those enormous and complex additions to the Tax Code. Why? Because all that is good Tax Code. It is good Tax Code because many of those provisions apply to your constituents. While I am talking about your constituents, let me congratulate you on a very successful fund-raiser last night. Mr. Speaker, I am told that you folks raised in excess of $10 million last evening alone. All the wealthy people that showered you with that money were there because they were crying out for tax fairness? Who do you think you are kidding? Those folks who pumped $10 million into the coffers of the Republican Party are part and parcel of that Tax Code. And their presence last night to eat your chicken was a hearty thank-you. But now you stand before us cleansed and pure decrying, ``We don't like the Tax Code because it is too complex and too unfair.'' But what are you going to tell the folks when you go to your parades on July 4 and you see their little Johnny or Jane and you hug them and say, ``Your family will get an extra $400 for each of them because we passed a child tax credit for you.'' They say, ``Yeah, but you also passed this bill that will take the credit away from us. What's going to happen to the child credit in 2002?'' ``I don't know.'' How about the home mortgage deduction? Every constituent of yours that owns a home wants that deduction retained. They may ask the gentleman from Oklahoma, ``What is going to happen in 2002 with that?'' ``I don't know.'' Mr. Speaker, I do not know what you guys are doing here today. But, again, congratulations on the $10 million fundraiser last night. You did a good job. Mr. BUNNING. Mr. Speaker, I yield myself 15 seconds. It is better than taking money from the Chinese government. Mr. Speaker, I yield 2 minutes to the gentleman from Washington (Mr. Metcalf). Mr. METCALF. Mr. Speaker, this legislation defines the Republican commitment to reduction of the tax burden on working Americans and thereby taking a mighty step toward ensuring a brighter future for people of all income levels. I am proud to be an original cosponsor of the Tax Code Termination Act. This legislation will provide for the abolition of the current unfair and burdensome Tax Code by 2001. This legislation does not carelessly abolish our current structure. Instead, the legislation requires the enactment of a replacement code by Independence Day, and that is a fitting day for this, 2001, that will be a fairer, simpler tax and reduce the tax burden on all Americans. Mr. Speaker, the current Tax Code has simply become too big and too complex to correct. You cannot fix it. All Members of the House should join us to replace the current Tax Code with a system that is fairer, less complicated and takes less money from working Americans. Mr. RANGEL. Mr. Speaker, if there is anybody in this body that knows of anyone that has taken money from the government of China, they would be aiding and abetting and involved as an accomplice in a felony unless they reported it to our Attorney General. [[Page H4661]] Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Matsui). Mr. MATSUI. Mr. Speaker, I thank the gentleman from New York for yielding me this time. Mr. Speaker, it is really hard to take this whole issue seriously this afternoon. We all know that it is not going to become law. It is going to pass out of the House but the Senate will not take action on it. That is why we are not seeing lobbyists clamber down on Capitol Hill. That is why we are not seeing letters to the editor. That is why we are seeing no stories in the major newspapers throughout the country. This is really a political opportunity for one of the parties. This is not going to become law. So it is really hard to get particularly pushed out of shape or excited or concerned about this. It is just not going to become law. Because the reality of the situation is that those that are advancing this particular proposal really in 1997 added thousands of pages to the Tax Code. In fact, we have added in 1997 when the Republicans were in control of the Congress 285 new sections to the Tax Code, 824 new amendments to the Tax Code. This is just in 1 year. There are now five ways, five separate ways to do capital gains. In fact, Schedule D, which had 23 lines, now has 54 lines, and it really does take H Block to really figure it out. The average person cannot do their taxes. Most of them do not have capital gains so they do not have to worry about it. In addition to that, there are now two different way to do IRAs, a back-ended way and a front- ended way. In addition, you can convert over, but you better make sure you understand your economic situation before you do. We also have a number of different ways either to take a credit or a deduction if you are a student. Should the student take it? Should the student's parents take it? Should the grandparents take it? We have really added complexity to the Code. The 1997 bill was probably the worst tax bill the United States has ever had, because it added more complexity to the Code than we have had in the last 25 years. And so this is not a real exercise in good government. This is really a show game. I have to say that if it were taken seriously, I think people in this country today would be really concerned. You would have to say, shall I buy a house because I get a deduction on my home, and that is an incentive, that reduces my taxes. But obviously if we changed the Code or the Code is eliminated in 3 years, I may lose that deduction and all of a sudden I might not be able to make my monthly payments on my other expenses. But no one is saying that, because this is not a serious effort. It is really a shame. We are going to be in until midnight tonight and we are not going to take any really substantive action. The irony of it is that we have 13 appropriations bills that are supposed to pass, we have a budget, but we do not have it out of the House yet. Not one appropriations bill has been taken to this body. There has been no budget reconciled between the House and the Senate. It was supposed to be done on April 15. Here we are at June 17, 2 months later. It is amazing. It is absolutely amazing that we are wasting our time engaged in this kind of activity that has no relevance, no value and certainly it is something that is a political exercise that I think the American public will eventually get disgusted with. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Hall). (Mr. HALL of Texas asked and was given permission to revise and extend his remarks.) Mr. HALL of Texas. Mr. Speaker, I want to be logical about this. I have thought a lot about it. I rise today in support of the Tax Code Termination Act. I rise at a time when we are doing better. We are doing better from the standpoint of economics. You can sell a piece of property now. People can find a job. We have got the lowest inflation. We have the lowest unemployment. Knowledgeable economists have told us that we have the best economy we have had since the late 1940s and early 1950s when we had the strongest financial position and strongest geopolitical position in the history of this country. So I guess you have to ask, why? Why are we where we are? I think the President, the present President thinks that he caused it. I think Mr. Dole probably think he did. I think Mr. Bush thinks it is something he put into motion. But really and truly I believe it is because we are just now getting over the lousy 1986 so-called Tax Reform Act. A lot of us have talked enthusiastically over the past few years about the need to replace our current tax with one that is more equitable, one that is more fair. Specific proposals for both a flat tax and a sales tax replacement have been debated throughout this country by proponents of these plans. A lot of us have signed on to both of these bills. The IRS administered Tax Code does not work. It has been the source of endless anguish, unfairness, confusion and the invasion of privacy for a lot of hard-working, well-intentioned Americans. In the interest of fairness, however, I must say it is only accurate to note that many hard-working and honest employees of the U.S. Treasury Department have been embarrassed and appalled by some of the testimony by their fellow employees during congressional hearings on IRS abuses. So I think they know from within that we need to do something about the Tax Code that we have. We have to recognize the fact that our Tax Code has facilitated, and in many cases encouraged outrageous abuses while escaping all attempts at reason and justice. The American people deserve the right to know when it will end. We need to be able to collectively undertake this important goal as opposed to a mere debate. {time} 1330 Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from New York (Mr. Houghton). (Mr. HOUGHTON asked and was given permission to revise and extend his remarks.) Mr. HOUGHTON. Mr. Speaker, I am not going to take long here, but I do think that this is something which I would like to share an idea or two with my colleagues. Let me tell them a story. There was a man called Robert Ruark, and he wrote a story called ``Something of Value'' which talked about the end of colonialism in Africa and the total chaos, and the reason there was chaos is that there was nothing to take the place of the old governments. And I think he said we could say as almost a general statement, ``When you take something away, you must be able to put something in its place.'' Now I do not consider this a political argument at all. I consider this an argument of technique. Some people think that the idea of forcing an issue is the better way to get to an end rather than logically taking a look at what the steps are in order to get where we ultimately want to be. I do not think anybody is happy with this Tax Code. I do not think anybody is happy, as my colleagues know, really since the days of our Lord when the Publicans were running around. I say ``Publicans,'' not ``Republicans,'' were going around and trying to collect taxes. But really the question is: What is out there? I think we must exert an element of judgment here. As my colleagues know, to force something without anything at the end, and let us say at the end of June in the year 2002 we have nothing; what do we do? Where do we go? How does somebody plan? Will there be Social Security? Will there be Medicare? Will there be anything else? No one really knows. Mr. Speaker, this is a very high stakes game, and to use a technique of forcing something without any anything on the other end I think is highly irresponsible, and therefore I think it is a bad measure and something which we should vote against. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentlewoman from Wyoming (Mrs. Cubin). Mrs. CUBIN. Mr. Speaker, I rise in strong support of H.R. 3097, the Tax Code Termination Act. I intend to vote for the passage of this legislation, not just because I am a cosponsor of the bill, but also because it makes sense. I have to just take exception with some statements by the speaker from California who talked about increasing people's taxes because of the possibility of not being able to deduct mortgage interest from their income and [[Page

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TAX CODE TERMINATION ACT
(House of Representatives - June 17, 1998)

Text of this article available as: TXT PDF [Pages H4654-H4677] TAX CODE TERMINATION ACT Mr. BUNNING. Mr. Speaker, pursuant to House Resolution 472, I call up the bill (H.R. 3097) to terminate the Internal Revenue Code of 1986, and ask for its immediate consideration in the House. The Clerk read the title of the bill. The SPEAKER pro tempore. The bill is considered read for amendment. The text of H.R. 3097 is as follows: H.R. 3097 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Tax Code Termination Act''. SEC. 2. TERMINATION OF INTERNAL REVENUE CODE OF 1986. (a) In General.--No tax shall be imposed by the Internal Revenue Code of 1986-- (1) for any taxable year beginning after December 31, 2001, and (2) in the case of any tax not imposed on the basis of a taxable year, on any taxable event or for any period after December 31, 2001. (b) Exception.--Subsection (a) shall not apply to taxes imposed by-- (1) chapter 2 of such Code (relating to tax on self- employment income), (2) chapter 21 of such Code (relating to Federal Insurance Contributions Act), and (3) chapter 22 of such Code (relating to Railroad Retirement Tax Act). SEC. 3. NEW FEDERAL TAX SYSTEM. (a) Structure.--The Congress hereby declares that any new Federal tax system should be a simple and fair system that-- (1) applies a low rate to all Americans, (2) provides tax relief for working Americans, (3) protects the rights of taxpayers and reduces tax collection abuses, (4) eliminates the bias against savings and investment, (5) promotes economic growth and job creation, and (6) does not penalize marriage or families. (b) Timing of Implementation.--In order to ensure an easy transition and effective implementation, the Congress hereby declares that any new Federal tax system should be approved by Congress in its final form no later than July 4, 2001. The SPEAKER pro tempore. Pursuant to House Resolution 472, the amendment in the nature of a substitute printed in House Report 105-580 is adopted. [[Page H4655]] The text of the amendment in the nature of a substitute is as follows: Strike all after the enacting clause and insert the following: SECTION 1. SHORT TITLE. This Act may be cited as the ``Tax Code Termination Act''. SEC. 2. TERMINATION OF INTERNAL REVENUE CODE OF 1986. (a) In General.--No tax shall be imposed by the Internal Revenue Code of 1986-- (1) for any taxable year beginning after December 31, 2002, and (2) in the case of any tax not imposed on the basis of a taxable year, on any taxable event or for any period after December 31, 2002. (b) Exception.--Subsection (a) shall not apply to taxes imposed by-- (1) chapter 2 of such Code (relating to tax on self- employment income), (2) chapter 21 of such Code (relating to Federal Insurance Contributions Act), and (3) chapter 22 of such Code (relating to Railroad Retirement Tax Act). SEC. 3. NEW FEDERAL TAX SYSTEM. (a) Structure.--The Congress hereby declares that any new Federal tax system should be a simple and fair system that-- (1) applies a low rate to all Americans, (2) provides tax relief for working Americans, (3) protects the rights of taxpayers and reduces tax collection abuses, (4) eliminates the bias against savings and investment, (5) promotes economic growth and job creation, and (6) does not penalize marriage or families. (b) Timing of Implementation.--In order to ensure an easy transition and effective implementation, the Congress hereby declares that any new Federal tax system should be approved by Congress in its final form no later than July 4, 2002. The SPEAKER pro tempore. The gentleman from Kentucky (Mr. Bunning) and the gentleman from New York (Mr. Rangel) each will control 1 hour. The Chair recognizes the gentleman from Kentucky (Mr. Bunning). General Leave Mr. BUNNING. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and include extraneous material on H.R. 3097. The SPEAKER pro tempore. Is there objection to the request of the gentleman from Kentucky? There was no objection. Mr. BUNNING. Mr. Speaker, I yield myself such time as I may consume to open the debate on this bill. Mr. Speaker, the Federal income tax system is broken beyond repair. We cannot tinker with it any longer and make it work any better. We need to wholesale reform and totally overhaul the system. There are two basic elements that are absolutely necessary for a Federal tax system. It must be understandable, and it must be fair. As it now stands, our Federal income tax fails badly on both counts. Our Tax Code has become so complex that no one can understand it. When tax experts cannot agree on how much an American taxpayer owes, how can we expect the average taxpayer to understand it? This complexity is expensive. It costs over $300 billion a year for taxpayers to comply with the Tax Code. That is money that is totally wasted. It does not benefit government or increase funding for essential services. It does not benefit the private sector or create investment, develop jobs, or improve the quality of life. It is just money down the drain. It is a crime. Our Tax Code is unfair. We have focused a great deal of attention this year on the marriage penalty, but this is just one of hundreds of inequities in the existing law. Over the years, Congress has created a hodgepodge of loopholes and arcane tax incentives, most of which were well-intentioned. But when you take them altogether and weed them into a 5\1/2\ million word tax code, it creates such a mess that only the very wealthy have the ability to take advantage of them. That creates unfairness. As a result, the American people have lost confidence in their tax system. Incremental change is not enough. We have tried that. It has resulted in failure and more complexity. We need real reform, a total overhaul of the Tax Code. We need to restore that confidence. That is what this bill is all about. It simply says that the sun will set on the Internal Revenue Code as we know it on December 31, 2002. It gives Congress 3 years to debate and develop a new tax system. It would simply force Congress to do in a timely manner what we need, no, what needs to be done, to pull the Federal income tax code out by its roots and replace it with an income tax system that is fair and understandable. This bill will help us do that. I urge my colleagues to support and vote for H.R. 3097. Mr. Speaker, I reserve the balance of my time. Mr. RANGEL. Mr. Speaker, I yield myself as much time as I may consume. (Mr. RANGEL asked and was given permission to revise and extend his remarks.) Mr. RANGEL. Mr. Speaker, this is a historic moment in the history because of our Congress, because I do not think that we will ever live to see a more irresponsible act committed by any Member of Congress. I know that this is an election year and so some leeway has to be given to the majority because, unfortunately, there is no institutional memory of them having passed any legislation this year. Being a politician myself, I can understand how they would like to capture the voters' imagination by doing something dramatic. But just to abolish the Tax Code, just to say that, by the year 2002, no tax shall be imposed by the Internal Revenue code, what a gift to give the American people. You will not have to pay any taxes until the Republicans, and do not laugh, until the Republican majority comes up with an idea as to how they are going to replace it. Let us think this one out. Who has been in charge for the last 3 years? Who had the majority? Who had the opportunity, really, to substitute this complex mess that they talk about? But rather than to come together, as if that is possible, with some type of a meaningful, fair tax code that would increase economic productivity for our great Nation and to continue to propel the prosperity that President Clinton has brought to us, they would rather just pull up the Tax Code by the roots. I assume that, while they are pulling it up by the roots, that this 800 pages of what they call a tax bill last year is mere fertilizer for the Tax Code that they are going to bring to us. Where are these great ideas that you have? Should the American people not have some idea as to where do you meet to come up with a new code? Years ago, Members would go to the Committee on Ways and Means. Now we go to the Committee on Rules. We have people just telling us what they are going to end, but no one is there to tell us what they are going to start. I have served on the Committee on Ways and Means for two decades. Every year, we had a tax bill; some good, some bad. For the last 3 years, we have not had anything that is coming up that is new. I want the Republicans to understand this, if they do not understand anything at all, they are in charge. They have a majority. They have the ability to call their troops together and vote for anything that they want, whether it is good or, in most cases, bad. But for God's sake, just with all due intention I did not bring the Bible, so I did not mean to say that, but for goodness sake, do not end something unless you tell the American people what do you intend to replace it with. We have business people that are planning now for the future. I would want them to call their Congressman, but since this issue is not being dealt with with the Congress, and since we do not know where the Tax Code is going to come from, and since the Committee on Ways and Means has lost jurisdiction, whoever meets with the Speaker should know what he is going to come up with. I would say, if people are planning for the future, whether they are going to have bonds out there, whether the States are going to have municipal bonds, where people want to know how to plan, call the Speaker, because I think he has some good ideas that he will not share with us. Second, if you are a hospital, church, synagogue, charitable organization, there is nothing in this bill that terminates that says you are going to be protected. I know the Republicans are going to protect them, so do not be afraid, but ask them how are they going to be protected. If we own a home and we have mortgage payments and we have been deducting them, we can deduct until the year 2000, and then we do not have to deduct anymore. [[Page H4656]] {time} 1245 Now, I do not know what happens, but we can call the Speaker and he will tell us what plans he has for mortgage deductions. And I tell my colleagues that, as complicated as this bill is, as bad as the Republican passed tax bill is, at least we know what we got. The fear is what are they going to come up with when for 3 years they have not even come up with a good idea. So I do hope that in the course of this debate that someone would come up with some kind of a plan that would give us some idea as to what they are going to fill this vacuum with. But I think killing the IRS, pulling it up by the roots, that the American people deserve better than just a bumper sticker. And if people do not like paying taxes and they think this is the solution, then I beg the Democrats in the minority, if they can just pass a law to keep us from paying taxes, why can we not pass a law to stop people from paying their debts? Why not? And if we do not like that, let us pass a law to terminate cancer. Let us think of something more exciting than our irresponsible brothers and sisters over here, and we will just say that if anyone votes against it, it means they support cancer; if they vote against it, they support paying back debts. I am ashamed that this is happening in the House, but I know the United States Chamber of Commerce and the local Chambers of Commerce around this country will study this termination bill and I hope we hear from them much before the election. Mr. Speaker, I reserve the balance of my time. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Oklahoma (Mr. Largent), one of the authors of the bill, to respond. Mr. LARGENT. Mr. Speaker, the previous speaker got one thing right, this is an historic moment. Understand, no one likes to be forced to do anything. My children do not like to be forced to make their bed and Congress certainly does not like to be forced to do anything. This bill simply does that, it forces Congress to quit talking about comprehensive tax reform and actually do something about it. And I would suggest to the previous speaker that maybe the reason he is in the minority and not in control is because it was his side that gave us this, the 6,200 pages that we currently know as the tax forms and instructions about how to file our tax returns today. And the gentleman is also right about another thing. The way it has always been done before is to go to the Committee on Ways and Means, in a small room in the back, and a few people decide about what the Tax Code should look like for the American people. What we are trying to do is to include all of the American people in the debate and in the discussion and in coming up with a comprehensive tax reform that is written not by a few people on the Committee on Ways and Means but is a consensus opinion of the American people and the business people in the communities around the country, the people that are suffering through 5.4 billion hours filing their tax return every year at a cost of somewhere over $200 billion just simply to comply with the current Tax Code. So the gentleman is right, we are trying to do it differently, we are trying to make sure it does not happen in the Speaker's room or in the Committee on Ways and Means but in the living rooms of the American people in this country, where they have a voice in the way their government writes a new comprehensive tax law. Mr. RANGEL. Mr. Speaker, I yield myself 1 minute to say to the distinguished gentleman that he keeps referring to that pile there as being something that has been put together by the Democrats. When we had a debate on the rule, I thought he said that this 800 pound tax document was passed by the Republican majority and he voted for it. So I would be glad to go over there and just put this on that pile. The second thing is that, we do not have to be another tax expert to know that the Congress should not be having to be forced to do anything. The majority should not have to force themselves to be responsible. All they have to do is take their consensus from the people and pass a decent, respectable, fair and equitable progressive tax bill. They should not force themselves to do it; just do the right thing. Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Stark). Mr. STARK. Mr. Speaker, I thank the gentleman for yielding me this time. We have talked today about the asininity of this bill, the sheer folly, the sophomoric sort of approach. I guess I would remind the people that it is the Republicans that shut down the government several times because they were unable to come up with a budget. I would challenge any Republican who has an idea, much less an idea of what they would do just in the oft chance they fail to come up with a bill. And even if they were to come up with a bill, they are not telling us what happens, say, in health care, an issue which they postulate a good bit about and posture about. The Armey flat tax bill, which they might choose, imposes tax penalties on employers that provide health care benefits to their employees. The Tauzin retail sales tax bill imposes a sales tax on people when they pay for health insurance and health care. I wonder if that is what they intend to do. The Republicans voted to increase the rate at which self-employed people could deduct their health care. This will end that. I presume that they really do not care, as they have not in the past, about providing health care to the 45 million uninsured. I am sure that they do not want to help employers pay for it, because I think they are indifferent. I am not sure that anyplace in the King James version of the Bible it suggests that employers should pay for health care benefits or that we should insure people. Therefore, some Republicans will tend to ignore the suffering that people have for lack of health care. The basic fact is that this is sheer irresponsibility, obviously drafted by people with no understanding of business or the Tax Code or economics, some things that are important to having the country's economy function. One of the things that many of my colleagues on the Republican side have been very assertive of is States rights. But what they do not understand is that this would also destroy many States' ability to raise any revenue. Many States that have an income tax parallel or mirror the Internal Revenue Code. And if in fact, as their bill suggests, we would stop collecting funds in the year 2002, we would, therefore, put these States out of business. And we would not have, obviously, any Federal money to support them. So they are impacting many States. The unintended consequences of this bill are legion. So that I want to remind my friends and colleagues that no one suggests that we should not reform the Tax Code. The last major reform was led by Ronald Reagan, at his insistence. Much of what is stacked over on that table was Ronald Reagan's suggestion, which we passed. And it was not a bad bill, I might add. Now, we have no bill and we have a nonsensical campaign bumper sticker, and I hope we vote it down and do not see this kind of embarrassing legislation brought again. Mr. BUNNING. Mr. Speaker, I yield 3 minutes to the gentlewoman from Washington (Ms. Dunn). Ms. DUNN. Mr. Speaker, after serving on the House Committee on Ways and Means for the past 3\1/2\ years, I am continuing to be amazed by the outrageous provisions that are involved in our current income Tax Code. In no small part, many of these provisions that are a function of the Tax Code have spiraled out of control. The irony is that while our Tax Code has just about 7 million words, it lacks two regular words, and those words, Mr. Speaker, are common sense. The current income tax system is far too complex and it is a source of utter frustration for millions of hardworking Americans and for their families. Over the past few years I have heard from thousands of constituents in my district alone and they have talked to me about hundreds of problems they have experienced with the system of taxation. A common theme, as we all know, has been the intrusive nature of the Internal Revenue Service. I believe it is time for this issue to be brought out of America's kitchen and on to the committee calendars of the Congress. [[Page H4657]] Money magazine last year reported that not one of 45 professional tax preparers could accurately compute a hypothetical family's tax return. Fewer than one in four came within even $1,000 of the correct figure. How can we expect average citizens to comply with a code when licensed professionals, who have spent years studying the system, cannot even get it right. Not only this, but the cost of compliance for the average family is horrendous. Each year Americans devote 8 to 10 billion hours complying with our Tax Code. This amounts to over 5 million Americans working all year long, the equivalent of the entire work force of my State, Washington State, of Iowa and Maine. The cost of complying totals about $200 billion annually, or $700 for each, man, woman and child in America. These are just the numbers associated with following the law. The income tax system involves a number of other costs, including those associated with enforcement and collection, as well as the cost of tax litigation. Sunsetting the code will work. President Clinton described this plan as reckless or irresponsible. Actually, as the President should know, it is common practice. Major Federal Government programs, such as spending on highways, education and agriculture, regularly expire and are rewritten in 5-year increments. This is a strategy also used by the States, who understand that change will not occur unless they break through the gridlock. This is exactly how this legislation to sunset the Tax Code will work. There is a national debate going on outside the Congress, Mr. Speaker, on the direction of the Tax Code. We have a terrific opportunity here today to improve the Federal system of corporate and personal income taxation in a manner that will both significantly improve the economic performance of our Nation and substantially reduce the compliance and administrative burden on American families. By scrapping this code, we will bring this debate into focus and force ourselves to discuss this issue. I urge its support. Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from Washington (Mr. McDermott). (Mr. McDERMOTT asked and was given permission to revise and extend his remarks.) Mr. McDERMOTT. Mr. Speaker, it is really hard to come down here and be serious about this kind of thing. No one likes to pay taxes, no one likes to have to sit down once a year and send money to the government to run it, but what we have today, in an effort to tap voter discontent by the Republicans, is a cheap campaign prop. This is a bumper strip we are doing today, that is why it is only about two sentences long. In order to take this seriously, we have to go back to a satirist who used to write for the Baltimore Sun by the name of H. L. Mencken. H. L. Mencken called the American public ``Boobis Americanus''. That is, they are all stupid. Now, in order for my colleagues to come with a bill like this, they have to think the American people are stupid; that they simply do not know what is going on. If we say to the American people that right now we spend $1,200,000,000 and we are going to wipe all that out and we are going to get it from somewhere else; now, where are they going to get it from? The moon? Or from somebody else? This sounds like a bill based on the Senator Long theory of, ``Don't tax you, don't tax me, tax that guy behind a tree.'' The American public knows there has to be a Tax Code if we are going to have the kinds of goods and services that we want in this country: Social Security, Medicare, highways, national defense. My colleagues are not going to get rid of the money. They simply are creating the illusion for people that they will come up with a Tax Code that will not tax them, it will tax somebody else. Well, how stupid do my colleagues think the American people really are? They know that their deduction for their interest on their house they get now. My colleagues are not guaranteeing them anything on their house. My colleagues are not guaranteeing that their employer can deduct paying for health care for them. The average employer today, if he spends $100 on health insurance, actually costs him $65. If we repeal the code, it costs $120. Now, I know my colleagues will say, oh, we are going to take care of that. Well, if my colleagues are going to take care of it, why do they not put a proposal out here to simply say that they are going to wipe out the code and come back some day, some uncertain time? The gentleman from California (Mr. Stark) raised another issue which my colleagues really are not thinking about. The Republicans are creating chaos in this country, in the business community planning. No businessman can plan 3 years out. {time} 1300 The problem with us is we plan 2 years out. Business plans 5, 10, 20. They want chaos. This is a bad piece of legislation. Seeking to tap into voter discontent about the complexity of the tax code, the Republican leadership today is disregarding the major issues confronting our nation in order to turn the House Floor into a cheap campaign prop. So while this bunch wastes your tax dollars by ranting, raving and campaigning about how they want to ``rip the tax code up by its roots''--without having any idea what tax system they want to replace it with--I am going to talk about what impact this rhetoric will have on real people. In particular, what this extremist legislation will mean to the ability of Americans to purchase affordable health care. Before I begin, it is important to note that the same people in the Republican majority currently peddling this ``scrap the code'' rhetoric, just last fall voted to add hundreds of new pages to the tax code and a myriad of new complex tax computations. Because of last year's tax law, this bunch added 35 new lines alone to taxpayers capital gains tax forms. So, keep that in mind that when you hear this bunch talk about tax simplicity--they are the ones who 6 months ago made the tax system a whole lot more complex. Most disturbing in their ``scrap the code'' rhetoric is the proposal to establish a rhetorically pleasing, yet critically flawed ``flat tax.'' This plan is often criticized because of its substantial revenue losses, its unfair redistribution of the tax burden, and its elimination of subsidies for home ownership. This push for the flat tax may help Republicans at the polls, but for the millions of American workers who need affordable health insurance, the flat tax is disastrous. While not necessarily ``news'' to the 42 million uninsured and the 29 million more who are underinsured in this country, there is no question that the group of workers and early retirees who will get hurt by the flat tax are the same ones who are currently being threatened by rising health costs in this country. A recent study by the National Coalition for Health Care found that between 1985 and 1997, the cost of health care doubled and it is expected to double again in the next decade. Next year alone, health premiums are estimated to rise between 5 and 10 percent--a rate at least twice that of the increase in benefits and wages. The number of uninsured in this country will exceed 42 million next year and by 2005, it is estimated that one in five Americans under the age of 65 will be without health insurance. The impact passage of the flat tax will have on worker's health insurance would be devastating. Under current law, there are substantial income tax incentives for employer-provided health benefits, with additional tax-benefits available to the self-employed who purchase health insurance. Employer-provided health benefits are exempt from income tax, Social Security, and Medicare employment taxes. For example, under the current system, the after-tax cost to an employer that provides $100 in health benefits to their employees is $65. Yet, the flat-tax plan destroys this health insurance incentive by increasing the employer's after-tax cost to $120. Under the flat tax's domestic business tax, amounts paid for non-cash fringe benefits, such as health care, are not deductible. As a result, the plan would impose an onerous tax penalty on employers providing health benefits. This legislation goes a step further by including a new tax on tax-exempt charitable organizations and Federal, State, and local governments equal to 20 percent of the amount paid for health benefits for their workers. Health benefits to retired workers will also decline. Many companies have large and burdensome liabilities for retiree health benefits and in recent years, those same companies have tried to limit benefits. The likely response from employers to the flat tax's tax penalties will be a significant reduction in health care benefits available to its current, future, and retired workers. Just last year, MIT economist James Poterba warned that ending the tax preference for employers who provide health insurance would cause the number of American families without health insurance to increase by 20 percent! In fact, such a decline in employer-provided health benefits should not surprise anyone familiar with the history of the flat tax. [[Page H4658]] When the Kemp Commission first proposed adoption of the flat tax, even the Health Insurance Association of America--the same group that spent millions of dollars to kill expansion of health care coverage in 1994 and is on the verge of spending millions more to kill managed care safeguards--warned ``one of the unintended consequences of eliminating the exclusion for health insurance premiums is likely to be a rapid increase in the number of people without private health insurance coverage.'' If you want to terminate the tax code, it is vital that you understand the ramifications of each remedy. There's no question that ripping away crucial tax incentives will increase the cost of health care in this country. I find it amazing that instead of finding ways to improve the quality, affordability, and availably of health insurance, the Majority is using its control of Congress to make America's health care problems worse. Before you jump on the ``scrap the code'' bandwagon, think, for a second, abut what this legislation will mean to the affordability of health car for America's workers, their families, and their employers. Unfortunately, it's clear form this debate that all this bunch is interested in doing is devaluing the legislative process of our democracy in order to create a simplistic bumper-sticker slogan in time for November's elections. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Pennsylvania (Mr. English). Mr. ENGLISH of Pennsylvania. Mr. Speaker, I thank the gentleman for yielding me the time. Mr. Speaker, our tax system hangs like an albatross around the neck of the American taxpayer, stifling savings and productive investment, and arbitrarily punishing or subsidizing activity and making the process of paying taxes nightmarishly complex even for those of modest means. In my view, the time has come to replace our current tax system. But we will never do it unless we overcome the inertia of the legislative process, unless we override the influence of the entrenched special interests who have a stake in the complexity of the Tax Code and who savor gridlock on this issue, and unless and until we force the issue and put everyone's feet to the fire. We propose to do that today. I rise in strong support of the Tax Code Termination Act, legislation that will finally give American taxpayers a solid time line for fundamental tax reform. Mr. Speaker, I have been a strong advocate of replacing our current Tax Code with a system that is fairer, radically simpler, eliminates the bias against savings, and will allow the U.S. to be more competitive internationally. I am prepared to accept the challenge of the gentleman from California to put forward my proposal this year. But replacing the Tax Code will be an enormous undertaking, and the time line for consideration should not be put off one more day. I challenge my colleagues, if they do not believe we can replace the current Tax Code with something simpler and fairer that will meet the needs of the American public, then vote against this bill. If they feel that any tax reform inevitably is going to be an improvement, as I do, vote for this legislation and put our feet to the fire. Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from Maryland (Mr. Cardin). Mr. CARDIN. Mr. Speaker, I rise in opposition to the current Tax Code and in support of comprehensive reform of our Federal tax system. I, too, agree that our Federal tax system is too complex, it is not efficient, it costs our taxpayers too much to comply with it, it is not sensitive for savings, we rely too much on income taxes. But the legislation before us is one of the strangest notions I have encountered in the 12 years I have served in this body. The bill is a result of frustration in our current tax structure, and it tells a Congress in the future to do something about it. We have had 4 years under Republican leadership to try to do something about our Tax Code. In this term, I thought we were going to do something. Last year, in a bipartisan way, we joined Democrats and Republicans to reform the Internal Revenue Service. We thought that bill would pass last year. It is still lingering within a conference committee. If we want to do something, why are we not using the time today to at least reform the IRS and deal with the tax collecting agency? But instead, no, we are debating some myth about what we are going to do in the future. It is outrageous. It is not even a fig leaf. We have not had a hearing on this proposal. We do not know what it is all about. Why are we not debating specific proposals on this floor? Mr. Speaker, yesterday in the Baltimore Sun, my local paper, I authored an article about why I thought a VAT tax is better than a flat tax and why we do not need a corporate income tax and we should be encouraging more savings. Why are we not having that proposal on the floor today and debating? Why is the Republican leadership not giving the American public real reform rather than bringing up a hope of what is going to happen 4 years from now, causing all types of panic about people trying to plan for their futures. People are trying to figure out how to save for their retirement. They want to know what the tax rules are going to be. And we are going to tell them, we are going to change them, but we are not going to tell them what it is going to be? How irresponsible. How wrong. Use the time we have. This schedule this year has been embarrassing. We have not been here most of the time. Why are we not using the time this year to have a serious debate on tax reform rather than bringing up this sham? It is wrong. They know it is wrong. This is not the right way to go. I urge my colleagues to defeat the bill. Mr. Speaker, I rise in opposition to the current tax code, and in support of a real debate on comprehensive reform of the federal tax system. The legislation before us is one of the strangest notions I have encountered in the twelve years I have served in this House. The bill is the result of frustration with the current tax system. Normally, when members of Congress seek to change existing law, they introduce legislation to make the changes they support. But this bill doesn't do that. We are here, in the 105th Congress, debating a bill that says that the tax code is such a mess that the 107th Congress should do something about it. That's not a serious proposal for simplifying the tax code. Instead of real tax reform, it is just an empty promise. Yesterday, the op-ed page of the Baltimore Sun, my home town newspaper, printed my article titled ``Why a VAT tax is better than a flat tax.'' The article presented my view that we should replace the existing tax code with a broad-based consumption tax, and relieve 75 million Americans of the burden of the individual income tax. I support repeal of the corporate income tax. Some members of the House will agree with my position; others will disagree. We should begin this debate now, rather than putting it off until the year 2002. We need to reform the tax code, and when we have done our jobs, and written a tax code that does not punish the American people, I will be proud to join in voting to sunset the existing code. Until then, Mr. Speaker, this process is nothing but talk. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Sam Johnson). (Mr. SAM JOHNSON of Texas asked and was given permission to revise and extend his remarks.) Mr. SAM JOHNSON of Texas. Mr. Speaker, we have had hearings, and 2\1/ 2\ years ought to be long enough for the people of the United States to speak and determine what tax they want. The current Tax Code is complex, confusing, corrupt, costly, coercive, and a lot of other Cs that I cannot think of. But so far there is a lot of talk and no action. When it comes to tax reform, a sunset date will force us to take action and relieve the American taxpayer. We ought to also repeal the 16th Amendment of the Constitution, and I have introduced a bill to do such a thing, the Tax Freedom Act. It outlaws Congress' ability to collect taxes on income except in time of war. Both these bills accomplish one common goal. No matter whether you support a flat tax, consumption tax, value-added tax, national sales tax, blue, black, brown, whatever, the common goal is replacing the current complicated Tax Code. Fundamental and comprehensive tax reform will be one of the most profound changes this Nation experiences this century. The Tax Code Termination Act brings us one step closer to achieving that change and restoring freedom to the American taxpayer. Americans want, need, and deserve to get rid of IRS oppression. We have been [[Page H4659]] talking about tax reform for years. Mr. Speaker, it is time to quit talking and start action, and this bill does just that. Mr. RANGEL. Mr. Speaker, I am reminded that when Dr. Frankenstein created his monster, he went immediately to trying to get rid of it. And, so, as the Republicans pass this tax bill, this is the same bill they want to pull up and pull up by the roots. Gentlemen, it is your bill. Do with it what you want. Mr. Speaker, I yield 3\1/2\ minutes to the gentlewoman from Connecticut (Mrs. Kennelly). Mrs. KENNELLY of Connecticut. Mr. Speaker, I rise in strong opposition to this legislation to terminate the Internal Revenue Code without replacing it with a system that is fairer, that is simpler, and encourages economic growth. I come from a State, a small State, Connecticut. But in that State, we have 18 of the Fortune 500 companies. Now, I can just imagine a conversation between a CEO and a board of directors when they hear that this bill is passed, because he or she would have to explain to the respective boards of directors how millions, and in some cases billions, in assets will disappear from their corporate balance sheets because of this legislation. The chief financial officer will have to explain there is nothing that can be done to prevent this because the Congress passed a bill to eliminate the Code and did not replace it with anything. And as a result of this bill, excess foreign tax credits would disappear, reducing the company's net worth. As we all know, foreign tax credits are carried as assets in today's corporate balance sheets. As a result of this bill, the corporate alternative minimum tax credit carried forward would disappear, reducing the company's net worth. Of course, as we know, the corporate alternative minimum tax credits are carried as assets on today's balance sheets. And as a result of this bill, research and experimentation credits would disappear, because as we know, R credits are carried as assets and those would just go away. As a result of this bill, deferred tax assets representing retiree health obligations would disappear, reducing the company's net worth. Not to mention providing retiree health benefits would then disappear because they could not write them off. The Financial Standards Accounting Board happens to require companies to charge retiree health obligations against current earnings. Retiree health obligations are deductible when actually paid. These deductions carried on today's corporate balance sheets are deferred tax assets. They would disappear. And as a result of this bill, operating loss carried forward would disappear, reducing the company's net worth. Net operating loss carried forward are carried as assets on today's corporate balance sheets. Unfortunately, many of these CEOs are going to find themselves explaining more than one of these things. In a few cases, the loss of the impact on these changes on the balance sheets could result in a profitable company losing all their positive net worth. Because this is the fact of the Code as it exists today, and if we do not replace it with something, all these things happen. I thought the majority in this Congress was opposed to takings. But, as I read this list, I guess not. But it gets worse. While the CEO needs to explain to the board that the business plan is no longer operative, the small businessman finds he is facing the same problem. A businessman or businesswoman would have to realize the rate of return on capital can no longer be projected. She has no idea how the company should calculate labor costs. She has no idea how to determine the most efficient financing mechanism for the new building that they will have purchased. They have no idea of the period over which the new equipment could be depreciated. I wonder how many CEOs would lose their jobs or how many small businesses would go out of business. It is because of these concerns, very real concerns, and I have been on the Committee on Ways and Means for now 13 years, that the National Association of Manufacturers are opposed to this bill. The Internal Revenue Code is far from perfect. We all know it. But if we are going to eliminate it, replace it with something that is simpler, fairer, and encourages economic growth. That is all we ask today. Do the whole job, not just half of it. Mr. BUNNING. Mr. Speaker, I yield 3 minutes to the gentleman from Colorado (Mr. Dan Schaefer). (Mr. DAN SCHAEFER of Colorado asked and was given permission to revise and extend his remarks.) Mr. THOMAS. Mr. Speaker, will the gentleman yield? Mr. DAN SCHAEFER of Colorado. I yield to the gentleman from California. Mr. THOMAS. Mr. Speaker, if we would listen to the gentlewoman from Connecticut (Mrs. Kennelly), who just spoke, what we would have to believe is that the business world did not exist prior to the invention of the Internal Revenue Tax Code; that corporations offer health care only because they get a tax deduction; without the tax deduction, there would be no compassion on the part of the owner to the worker; and that all of the complications that a CEO would have to deal with, in fact jeopardizing their job, are essential to running a business. What in the world did business do before there was an Internal Revenue Service? Mr. DAN SCHAEFER of Colorado. Mr. Speaker, during my 15 years here in the House, literally thousands of taxpayers have contacted me to express their frustration with the current code that we have. The Tax Code is so complicated that even those who call themselves tax experts cannot figure it out. Let me give my colleagues a good example. Last November, Money Magazine gave 45 accountants nationwide a financial profile of a fictional family and asked them to prepare a hypothetical tax return. Not only did all 45 come up with different answers, but the computed tax liability ranged from $36,000 to $94,000. No one knows whether they are illegal or not illegal anymore when they file their returns. Today, the average family pays more in taxes than it spends on food, clothing, and shelter combined. As a whole, Americans will spend at least $200 billion and over $5 billion complying with the income tax this year alone. This is more time than it takes to produce every car, truck, and van in the United States each year. Tracking all this paperwork requires the Internal Revenue Service, five times larger than the Federal Bureau of Investigation. And unlike the FBI, the IRS's power is nearly absolute. It may search our property and records without a court order. And although both the House and Senate have overwhelmingly passed substantial IRS reform bills, I do not believe that that alone will prove successful. Over the past several years, I have talked to audiences nationwide about the case of replacing the Federal income tax with a national sales tax. Two years ago we introduced the National Retail Tax Act of 1996, and just last year reintroduced it again in H.R. 2001. This legislation is going to abolish the IRS completely, eliminate corporate taxes, gift taxes, capital gains tax, inheritance taxes, gift taxes, and all excise taxes unless they are tied to a trust fund. I think this is the way to do it. Let us for once take the power of taxation away from Congress, give it to the American people, and let then decide. And once and for all, let us eliminate 8,000-plus pages in the Tax Code and replace it with a Tax Code that is going to say April 15 is another bright, spring day. Mr. RANGEL. Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman from Michigan (Ms. Stabenow). Ms. STABENOW. Mr. Speaker, I rise today to urge a no vote on the bill, but to first indicate that I have voted for IRS reform that we are still waiting to pass this Congress. I support real tax reform. And I would even support a deadline if there were alternatives proposed by the other side, by the majority, that were good for hard-working men and women in my district. {time} 1315 Mr. Speaker, before coming to Congress, I served for 16 years on the tax and finance committees in the Michigan legislature. I supported and sponsored numerous tax cut bills. But in [[Page H4660]] each case, they were making things better for the middle-class families, family farmers and small business people that I represented. Unfortunately in this case, the alternatives proposed by the majority are even worse, even more unfair than the current system. For instance, a national retail sales tax, which is also a use tax on professionals and entrepreneurs, would, according to the tax analysts, raise the cost of buying goods and services something close to 30 percent when all is figured. Houses, cars, food, prescription drugs for our senior citizens, on and on. Insurance premiums. It goes on and on. In addition to that, it would tax doctor's visits. It would tax accountant's visits. It would create a situation where every small business person and entrepreneur in my district, every professional, would have to become a tax collector. I do not call that better than what we have right now. Let us really fix it and really do something that is better by proposing a real alternative. In addition, the flat taxes that have been proposed by the other side just shift from wealthy individuals to the middle-class families in my district. Mr. Speaker, I want to see something simpler. I want to see reform. But let us do it in a way that does not involve the proposals coming from the other side which are not good certainly for the people that I represent in Michigan. I would urge a ``no'' vote on the bill. I would urge my colleagues instead to do what we did last year. Let us join together in a bipartisan way. We passed a balanced budget amendment. We passed tax cuts last year. Let us join together and create real reform for the real hard-working families, middle-class Americans that deserve the relief in this country. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Minnesota (Mr. Peterson). Mr. PETERSON of Minnesota. Mr. Speaker, I rise today in support of the Tax Code Termination Act. I have been in favor of scrapping this code and starting over for a long time. I am one of the few Members of this body that is a certified public accountant that has actually done tax returns for a living and have lived with this code for a long time. This Congress, under both parties, has contributed to this problem. The people on my side of the aisle might have a good point. I say to them that if they do not like this method of trying to get at this problem, then put something else forward. I think it makes sense for us to come up with a date certain. We did that when we balanced the budget and it helped us focus our attention. We have a date certain on when we are going to overhaul this Tax Code. I think it helps us. But, as I have said, I have been for reforming this system ever since 1986 when, under the guise of tax simplification, we passed a bill which I think was arguably the worst piece of legislation that has ever been passed in this Congress. We made it worse in 1990, and we made it worse last year when they passed the 1997 tax act to the point where my partner, who is still doing tax returns, told me this weekend that this is so complicated that he does not think he can any longer do a tax return by hand. The only way he can do a tax return is if he has a computer to be able to make all these computations and go back and forth. Mr. Speaker, this code has gotten completely out of hand. It needs to be simplified. It is not happening under the current process. I am not sure this is the best process in the world but it is the only thing we have in front of us today. I am in favor of overhauling the code. I think the way we do that is we start from scratch, with a clean slate, and then try to build up something that is simpler and makes more sense. I support this bill and encourage everybody's support. Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from Wisconsin (Mr. Kleczka). Mr. KLECZKA. Mr. Speaker, I rise in strong opposition to the proposal today; however, I do support simplifying the Tax Code. Mr. Speaker, what we are involved in this afternoon is a new form of roulette. This afternoon we are playing Gingrich roulette. I say to all Members, it is a most dangerous game. Mr. Speaker, I happen to serve on the Committee on Ways and Means. This bill comes before us with no hearings, no committee deliberations, no contingency plans should we not have a new Tax Code ready by July 4, 2002. So what we are doing is we are just shooting in the wind, hoping that Congress can develop a whole new Tax Code that is better than the current system. Let us talk about the current system for a moment. The gentleman from Oklahoma brings forth the 6,000 pages that he claims to be the Tax Code. Where does he think that came from? How many pages of that Tax Code give tax relief to my constituents? Oh, some do. There are some child credit tax provisions in there, there are some earned income tax credit provisions in there, but know full well the bulk of that document you have before the House today is there for the benefit of the moneyed special interests in this country. How many pages did Ronald Reagan and his 8 years add to the Code? Of the 6,000, I will bet 2,000. How many did President Bush and his administration add to the Code? Probably more than one thousand. But no Republicans are coming up and decrying those enormous and complex additions to the Tax Code. Why? Because all that is good Tax Code. It is good Tax Code because many of those provisions apply to your constituents. While I am talking about your constituents, let me congratulate you on a very successful fund-raiser last night. Mr. Speaker, I am told that you folks raised in excess of $10 million last evening alone. All the wealthy people that showered you with that money were there because they were crying out for tax fairness? Who do you think you are kidding? Those folks who pumped $10 million into the coffers of the Republican Party are part and parcel of that Tax Code. And their presence last night to eat your chicken was a hearty thank-you. But now you stand before us cleansed and pure decrying, ``We don't like the Tax Code because it is too complex and too unfair.'' But what are you going to tell the folks when you go to your parades on July 4 and you see their little Johnny or Jane and you hug them and say, ``Your family will get an extra $400 for each of them because we passed a child tax credit for you.'' They say, ``Yeah, but you also passed this bill that will take the credit away from us. What's going to happen to the child credit in 2002?'' ``I don't know.'' How about the home mortgage deduction? Every constituent of yours that owns a home wants that deduction retained. They may ask the gentleman from Oklahoma, ``What is going to happen in 2002 with that?'' ``I don't know.'' Mr. Speaker, I do not know what you guys are doing here today. But, again, congratulations on the $10 million fundraiser last night. You did a good job. Mr. BUNNING. Mr. Speaker, I yield myself 15 seconds. It is better than taking money from the Chinese government. Mr. Speaker, I yield 2 minutes to the gentleman from Washington (Mr. Metcalf). Mr. METCALF. Mr. Speaker, this legislation defines the Republican commitment to reduction of the tax burden on working Americans and thereby taking a mighty step toward ensuring a brighter future for people of all income levels. I am proud to be an original cosponsor of the Tax Code Termination Act. This legislation will provide for the abolition of the current unfair and burdensome Tax Code by 2001. This legislation does not carelessly abolish our current structure. Instead, the legislation requires the enactment of a replacement code by Independence Day, and that is a fitting day for this, 2001, that will be a fairer, simpler tax and reduce the tax burden on all Americans. Mr. Speaker, the current Tax Code has simply become too big and too complex to correct. You cannot fix it. All Members of the House should join us to replace the current Tax Code with a system that is fairer, less complicated and takes less money from working Americans. Mr. RANGEL. Mr. Speaker, if there is anybody in this body that knows of anyone that has taken money from the government of China, they would be aiding and abetting and involved as an accomplice in a felony unless they reported it to our Attorney General. [[Page H4661]] Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Matsui). Mr. MATSUI. Mr. Speaker, I thank the gentleman from New York for yielding me this time. Mr. Speaker, it is really hard to take this whole issue seriously this afternoon. We all know that it is not going to become law. It is going to pass out of the House but the Senate will not take action on it. That is why we are not seeing lobbyists clamber down on Capitol Hill. That is why we are not seeing letters to the editor. That is why we are seeing no stories in the major newspapers throughout the country. This is really a political opportunity for one of the parties. This is not going to become law. So it is really hard to get particularly pushed out of shape or excited or concerned about this. It is just not going to become law. Because the reality of the situation is that those that are advancing this particular proposal really in 1997 added thousands of pages to the Tax Code. In fact, we have added in 1997 when the Republicans were in control of the Congress 285 new sections to the Tax Code, 824 new amendments to the Tax Code. This is just in 1 year. There are now five ways, five separate ways to do capital gains. In fact, Schedule D, which had 23 lines, now has 54 lines, and it really does take H Block to really figure it out. The average person cannot do their taxes. Most of them do not have capital gains so they do not have to worry about it. In addition to that, there are now two different way to do IRAs, a back-ended way and a front- ended way. In addition, you can convert over, but you better make sure you understand your economic situation before you do. We also have a number of different ways either to take a credit or a deduction if you are a student. Should the student take it? Should the student's parents take it? Should the grandparents take it? We have really added complexity to the Code. The 1997 bill was probably the worst tax bill the United States has ever had, because it added more complexity to the Code than we have had in the last 25 years. And so this is not a real exercise in good government. This is really a show game. I have to say that if it were taken seriously, I think people in this country today would be really concerned. You would have to say, shall I buy a house because I get a deduction on my home, and that is an incentive, that reduces my taxes. But obviously if we changed the Code or the Code is eliminated in 3 years, I may lose that deduction and all of a sudden I might not be able to make my monthly payments on my other expenses. But no one is saying that, because this is not a serious effort. It is really a shame. We are going to be in until midnight tonight and we are not going to take any really substantive action. The irony of it is that we have 13 appropriations bills that are supposed to pass, we have a budget, but we do not have it out of the House yet. Not one appropriations bill has been taken to this body. There has been no budget reconciled between the House and the Senate. It was supposed to be done on April 15. Here we are at June 17, 2 months later. It is amazing. It is absolutely amazing that we are wasting our time engaged in this kind of activity that has no relevance, no value and certainly it is something that is a political exercise that I think the American public will eventually get disgusted with. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Hall). (Mr. HALL of Texas asked and was given permission to revise and extend his remarks.) Mr. HALL of Texas. Mr. Speaker, I want to be logical about this. I have thought a lot about it. I rise today in support of the Tax Code Termination Act. I rise at a time when we are doing better. We are doing better from the standpoint of economics. You can sell a piece of property now. People can find a job. We have got the lowest inflation. We have the lowest unemployment. Knowledgeable economists have told us that we have the best economy we have had since the late 1940s and early 1950s when we had the strongest financial position and strongest geopolitical position in the history of this country. So I guess you have to ask, why? Why are we where we are? I think the President, the present President thinks that he caused it. I think Mr. Dole probably think he did. I think Mr. Bush thinks it is something he put into motion. But really and truly I believe it is because we are just now getting over the lousy 1986 so-called Tax Reform Act. A lot of us have talked enthusiastically over the past few years about the need to replace our current tax with one that is more equitable, one that is more fair. Specific proposals for both a flat tax and a sales tax replacement have been debated throughout this country by proponents of these plans. A lot of us have signed on to both of these bills. The IRS administered Tax Code does not work. It has been the source of endless anguish, unfairness, confusion and the invasion of privacy for a lot of hard-working, well-intentioned Americans. In the interest of fairness, however, I must say it is only accurate to note that many hard-working and honest employees of the U.S. Treasury Department have been embarrassed and appalled by some of the testimony by their fellow employees during congressional hearings on IRS abuses. So I think they know from within that we need to do something about the Tax Code that we have. We have to recognize the fact that our Tax Code has facilitated, and in many cases encouraged outrageous abuses while escaping all attempts at reason and justice. The American people deserve the right to know when it will end. We need to be able to collectively undertake this important goal as opposed to a mere debate. {time} 1330 Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from New York (Mr. Houghton). (Mr. HOUGHTON asked and was given permission to revise and extend his remarks.) Mr. HOUGHTON. Mr. Speaker, I am not going to take long here, but I do think that this is something which I would like to share an idea or two with my colleagues. Let me tell them a story. There was a man called Robert Ruark, and he wrote a story called ``Something of Value'' which talked about the end of colonialism in Africa and the total chaos, and the reason there was chaos is that there was nothing to take the place of the old governments. And I think he said we could say as almost a general statement, ``When you take something away, you must be able to put something in its place.'' Now I do not consider this a political argument at all. I consider this an argument of technique. Some people think that the idea of forcing an issue is the better way to get to an end rather than logically taking a look at what the steps are in order to get where we ultimately want to be. I do not think anybody is happy with this Tax Code. I do not think anybody is happy, as my colleagues know, really since the days of our Lord when the Publicans were running around. I say ``Publicans,'' not ``Republicans,'' were going around and trying to collect taxes. But really the question is: What is out there? I think we must exert an element of judgment here. As my colleagues know, to force something without anything at the end, and let us say at the end of June in the year 2002 we have nothing; what do we do? Where do we go? How does somebody plan? Will there be Social Security? Will there be Medicare? Will there be anything else? No one really knows. Mr. Speaker, this is a very high stakes game, and to use a technique of forcing something without any anything on the other end I think is highly irresponsible, and therefore I think it is a bad measure and something which we should vote against. Mr. BUNNING. Mr. Speaker, I yield 2 minutes to the gentlewoman from Wyoming (Mrs. Cubin). Mrs. CUBIN. Mr. Speaker, I rise in strong support of H.R. 3097, the Tax Code Termination Act. I intend to vote for the passage of this legislation, not just because I am a cosponsor of the bill, but also because it makes sense. I have to just take exception with some statements by the speaker from California who talked about increasing people's taxes because of the possibility of not being able to deduct mortgage interest from their income and [[Page