[Pages H4643-H4654]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

PROVIDING FOR CONSIDERATION OF H.R. 3097, TAX CODE TERMINATION ACT OF
1998

Mr. HASTINGS of Washington. Mr. Speaker, by the direction of
Committee on Rules, I call up House Resolution 472 and ask for its
immediate consideration.
The Clerk read the resolution, as follows:

H. Res. 472

Resolved, That upon the adoption of this resolution it
shall be in order to consider in the House the bill (H.R.
3097) to terminate the Internal Revenue Code of 1986. The
bill shall be considered as read for amendment. The amendment
in the nature of a substitute printed in the report of the
Committee on Rules accompanying this resolution shall be
considered as adopted. The previous question shall be
considered as ordered on the bill, as amended, to final
passage without intervening motion except: (1) two hours of
debate on the bill, as amended, equally divided and
controlled by the chairman and ranking minority member of the
Committee on Ways

[[Page H4644]]

and Means; and (2) one motion to recommit with or without
instructions.

The SPEAKER pro tempore. The gentleman from Washington (Mr. Hastings)
is recognized for 1 hour.
Mr. HASTINGS of Washington. Mr. Speaker, for purposes of debate only,
I yield the customary 30 minutes to my friend, the gentleman from Texas
(Mr. Frost), pending which I yield myself as much time as I may
consume. During consideration of this resolution, all time yielded is
for purposes of debate only.
Mr. Speaker, this rule is a fair and balanced attempt to bring to the
floor an issue that is front and center in every American's mind. The
rule provides for a closed rule, which is typical on tax issues. The
rule further provides that the amendment in the nature of a substitute
printed in the report of the Committee on Rules accompanying the rule
be considered as adopted. The rule also provides 2 hours of debate
equally divided and controlled by the chairman and ranking member of
the Committee on Ways and Means. The rule provides one motion to
recommit with or without instructions.
Mr. Speaker, anyone who has prepared his or her own tax return
understands why so many Americans spend hundreds of dollars to hire
professional accountants to complete their tax returns. Considering the
Tax Code itself is 3,458 pages long, it is not surprising that the
preparation of tax returns is so difficult. It is also not surprising
that our complex code requires over 110,000 Internal Revenue Service
employees at an annual cost to the taxpayers of $9.8 billion per year.
That is just to police the tax collection system.
Americans want and need a tax system that is both fair and simple.
Today's Tax Code frankly is neither. That is why the gentleman from
Oklahoma (Mr. Largent) and others has introduced legislation to begin
the process of overhauling the current U.S. Tax Code.
The Tax Code Termination Act will set a date certain for the
expiration of Federal tax laws that currently govern the collection of
America's corporate, personal, estate, and excise taxes. Under the Tax
Code Termination Act, the current Tax Code would continue on the books
for 4 more years. At that time, the current system would expire and be
replaced by a new Tax Code that would be thoughtfully and deliberately
determined by Congress, the President, and, most importantly, the
American people.
In addition to terminating the Tax Code, this legislation would
protect Social Security and Medicare, require a supermajority of both
Houses of Congress in order to raise taxes and eliminate the bias
against savings and investment as well as bias against families.
The next 4 years will give Congress and the American people plenty of
time to debate the merits of the many tax reform proposals currently
being discussed, as well as new ideas that will undoubtedly emerge.
Having a date certain for the expiration of the Tax Code will keep the
issue at the top of the national agenda and force Congress and the
President to make the Tax Code fair and simple. The rule sets the stage
for this first critical step on the debate on tax reform. As a result,
Mr. Speaker, I urge Members' support of the rule.
Mr. Speaker, I reserve the balance of my time.

{time} 1100

Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, this bill, of course, takes the cake. My Republican
colleagues want to scrap the Tax Code lock, stock and barrel but are
proposing nothing to take its place. Does this demonstrate a commitment
to the responsibilities of governance? I think not, Mr. Speaker. This
proposal, coming just 5 months before an election, is nothing more than
a gimmick. I know it, you know it, Mr. Speaker, and the American people
know it.
Mr. Speaker, I have spoken with a number of prominent businessmen in
my Congressional District in Texas about the idea of scrapping the Tax
Code. And, quite frankly, Mr. Speaker, many of these individuals are
Republicans themselves and hold no fondness for the current code. But,
Mr. Speaker, to a person they have told me that scrapping the code
without a substantial proposal ready to take its place is folly. Not
just folly, Mr. Speaker, such an idea is dangerous. Certainty and
predictability are absolutely critical to sound business decisions, and
the idea that we are going to do away with our existing tax structure
without holding a single hearing on what might come next will do little
to engender confidence in the business community. What are we saying to
America's businessmen and women?
And it is not just business that worries about this idea. What about
the countless individual taxpayers who make any number of decisions
each year based on what might be the tax implications for them? Who
will want to buy a home not knowing if there is a mortgage deduction?
The National Association of Realtors said, ``Eliminating the current
code without having a workable alternative in place would be disastrous
for America's homeowners.'' We can only guess about the chaos this
legislation will create in the housing market. Not knowing if mortgage
interest and property taxes will be deductible certainly has the
potential to create wild fluctuations in home prices, in response to
rumors and speculation about what might or might not happen to the new
tax system.
Mr. Speaker, 75 percent of the families in this country who claim the
mortgage interest deduction have incomes of less than $75,000. What are
we saying to them? What are we saying to all the industries who depend
upon the housing market for their livelihood?
Without a replacement for the Tax Code on the books, Americans
planning their retirement will not know what to do about investments
for the future. Are KEOGH plans, or IRAs, or Roth IRAs going to be
available, if and when the Congress gets around to implementing a new
system of taxation? What will happen to money in their company pension
plan? And, of course, do we really believe that Congress is going to be
capable of passing a new tax plan when Congress cannot even pass a
budget on time?
Corporations will delay investments in new plants and equipment if
they do not know what will happen to cost recovery rules. Schools and
hospitals that depend upon tax exempt bonds to finance construction and
maintenance will be in limbo. Who in 1998 will want to buy a tax exempt
bond if the exemption is scheduled to end in the year 2002? And who
knows what will happen next? States and localities will have a harder
time coming up with capital, because investors thinking of buying
municipal bonds will not know what will happen to their money.
What then are we saying to everyone in the United States? I will tell
my colleagues what we are saying, Mr. Speaker. We will be saying that
the Republican Congress is willing to play a reckless game of chicken
with the lives of real Americans because they will not otherwise take
up real tax reform. The Republican majority is willing to promise
reform without offering a clue of where they might be heading. This is
bad business, Mr. Speaker.
If the Republican majority really wants to reform the code, then let
us do it and let us do it now. There are plenty of interesting
proposals that have been tossed around for years, so let us bring them
up, debate and vote.
I would like to offer the Republican majority the opportunity to
vote; to vote against ordering the previous question and to allow me to
offer a substitute to the rule. My substitute would allow the House to
consider the flat tax advocated by the gentleman from Texas (Mr.
Armey), my colleague; the value added tax advocated by the gentleman
from Louisiana (Mr. Tauzin); and the tax reform package proposed by the
Democrat leader, the gentleman from Missouri (Mr. Gephardt). Those are
three very interesting proposals that the House should consider if we
want to force the issue of reforming the Tax Code.
Mr. Speaker, I urge my colleagues to vote ``no'' on the previous
question. If we do not prevail there, and a majority of the House
decides instead to bring up this reckless proposal, I would urge my
colleagues to oppose it. The Republican leadership, in an effort to
retain its majority, has brought us a dangerous bit of election year
posturing that does not deserve to pass.
Mr. Speaker, I reserve the balance of my time.

[[Page H4645]]

Mr. HASTINGS of Washington. Mr. Speaker, I yield 3 minutes to the
gentleman from Illinois (Mr. Weller).
Mr. WELLER. Mr. Speaker, I want to thank my friend from Washington
State for yielding me this time. I rise in support of the rule as well
as this legislation. Really what this vote is all about, when we cast
the vote later today on setting a date certain when we will replace the
Tax Code, is really a simple choice for all of us in Congress, and that
is are we happy with the status quo.
In town meetings that I have, whether I am at the union hall, the
VFW, the business or professional women's club meeting, the local
chamber of commerce, or at a coffee shop on Main Street, there is a
pretty clear message that I hear as I listen, and that is people are
very frustrated. Over half of Americans hire someone else to do their
taxes. They are afraid of getting audited by the IRS. They believe the
Tax Code is much too complicated, it is clearly unfair, and the tax
burden is too high. In fact, today the tax burden is at its highest
level since World War II.
One example I want to use of why we need to replace the Tax Code is
what is really probably the most unfair provision in the Tax Code
today, and that is the marriage tax penalty, which is suffered by 21
million married working couples. It really is an issue of fairness, if
we think about it. Do Americans feel it is really fair that 21 million
average working married couples pay on the average of $1400 more just
because they are married under other Tax Code? Of course not. That is
unfair. And $1400 in the south suburbs of Chicago, that is real money.
That is one year's tuition at Joliet Junior College; that is 3 months
of day care at a local day care center in Joliet, Illinois. Clearly, we
need to work to make the Tax Code fair.
We have begun a lot of work in reforming and replacing the Tax Code
already. Our efforts to restructure the IRS, to make the IRS, the tax
collector, accountable to the folks that live by the rules and pay the
bills back home. Restructuring the IRS is going to be a major
achievement for this Congress when it is sent to the President and
signed into law later this summer. That is a big step forward in tax
reform.
In bringing fairness to the Tax Code, we need to begin with
eliminating the marriage penalty. I believe it should be the
centerpiece of this year's budget and, hopefully, we will get that done
this year. But we need to set a date certain.
Politicians in Washington talked a long time about balancing the
budget. Politicians in Washington said it is something we should do,
but politicians in Washington took 28 years, over a generation, in
order to balance the budget. Let us set a date certain. It took 28
years before Washington balanced the budget and does something that our
families do back home every day, and that is live within our means. We
need to set a date certain that we are going to replace the Tax Code.
If I ask for a show of hands, I very rarely ever find taxpayers back
home who feel our Tax Code is simple, that our Tax Code is fair, that
the tax burden is not enough. We need to reform our Tax Code. We need
to make our Tax Code simpler, fairer, and we need to lower the rates
for average, working, middle class Americans. That is the goal of tax
reform.
We need to set a deadline. We need to make a commitment to getting
the job done. And of course there will be those who do not want to make
that kind of commitment. We know how Washington can take a long time.
We need a date certain. I support this rule and this legislation. Let
us get the job done, let us reform the Tax Code, let us make the Tax
Code fairer, simpler, and also let us lower taxes for average, middle
class, working Americans.
Mr. FROST. 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.
Mr. Speaker, the distinguished gentleman from Illinois makes
excellent points. I would agree with him that the Tax Code could be
more fair and should be more fair; that the burden should be
redistributed; that the marriage penalty is something that should be
adjusted, taking into account the new structure in families. And that
may well get done, if the Republican leadership decides to let it get
done and bring it to the floor. I have serious doubts about their
ability to do that. But if they do, they would receive a lot of support
from this side.
Now, having said that, the bill under discussion, if we did reform
the marriage tax penalty, would completely negate that. If we made the
Tax Code more fair, this silly bill that is under discussion would
completely eliminate that. My colleagues may say, yes, we must set a
time. Look at the experience under the Republican leadership, Mr.
Speaker. In 1994, the Republicans shut down the government, not once
but twice, because the Republicans could not even agree on a budget.
Now, imagine rewriting the entire Tax Code at a time when the
government is shut down. No money.
Do we have any faith that the Republican leadership that has brought
government to a standstill twice in their tenure, that has waited 28
years for a balanced budget, could get the Tax Code revised? They
cannot solve the marriage penalty, they cannot get anything done, they
cannot protect people in managed care from the greedy insurance
companies, they cannot punish the tobacco companies. The Republicans
have shown no ability to get their act together. Why would anyone in
their right mind think that they could put together a tax bill in its
entirety when they cannot bring one to the floor now?
So their way is to destroy the government. Shut it down, again and
again. This time, if we shut down the government for the lack of a Tax
Code, it will be gone for a long time. I urge my colleagues to think
through the seriousness of this, the capriciousness, the
irresponsibility, the childishness of bringing forth a bill which could
destroy the government.
And it certainly destroys what little, if any, credibility the
Republican leadership of this House might have with the American
public. They are inept and unable to run this Congress or bring forth
bills that will help the country and, in so doing, they show their
ineptness, their impotence to pass legislation by saying if we cannot
do anything, let us set a time limit.
My children, Mr. Speaker, when they were unhappy, used to say, ``I'm
going to hold my breath and die if I don't get an extra bit of
desert.'' Well, let us let the leadership hold their breath and see
what happens. I urge a ``no'' vote.
Mr. HASTINGS of Washington. Mr. Speaker, I yield 2 minutes to the
gentleman from Tennessee (Mr. Duncan).
Mr. DUNCAN. Mr. Speaker, I thank the gentleman from Washington for
yielding me this time, and I rise in strong support of this legislation
and the rule that brings it to the floor.
A few months ago Newsweek magazine had on its cover, ``The IRS:
Lawless, Abusive, Out of Control.'' Now, when any Federal agency, but
especially one that affects so many Americans and is so intrusive as
the Internal Revenue Service, is described by a major national
magazine, a mainstream magazine like Newsweek, as being lawless,
abusive and out of control, things have gotten to a pretty sad state.
We can do much better, Mr. Speaker. We should do much better, if we
are going to do the job that the American people want us to do. Almost
every poll shows that 85 to 90 percent of the people want us to
drastically reform, drastically simplify the Tax Code. There is no good
reason why we should have a Tax Code nearly as complicated, convoluted
and confusing as the one we have.
Mr. Speaker, we have a Tax Code that is something like 91,000 pages
of rules and regulations on top of the code itself, involving five or
six million words. Almost no one understands it. All of us have seen
articles showing that about 40-something percent, or almost half of the
advice that the IRS itself gives out is wrong. And almost everyone in
this country has violated some tax law at some point in his or her
life, unintentionally, unknowingly, and all it would take would be for
an overzealous prosecutor or some power crazed IRS agent to come after
them to cause them to go through all sorts of misery and heartache and
go to tremendous expense.

[[Page H4646]]

So we need to do what the American people want us to do. We need to
drastically simplify this Tax Code. We need to throw out the code that
we have got and simply start over and come up with a code that is
simple and fair to the American people and do the job that they sent us
here to do and give this government of this country back to the
citizens once again.
I am proud to be a cosponsor of this legislation and I urge its
passage.
Mr. FROST. Mr. Speaker, I yield 3 minutes to the gentleman from Ohio
(Mr. Traficant).
(Mr. TRAFICANT asked and was given permission to revise and extend
his remarks.)

{time} 1115

Mr. TRAFICANT. Mr. Speaker, I support the rule and I support the
bill. And I am trying to figure out a strategy for Democrats coming
back to the majority here today.
With a Tax Code that is so heavy, it would give Hulk Hogan a hernia.
We need 5 Philadelphia attorneys to try to interpret it; and after
their session, they will all argue and not come to an agreement. The
Tax Code rewards dependency, penalizes achievement, subsidizes
illegitimacy, kills investment, kills jobs, and takes our hard-earned
tax dollars and in many cases gives them outright to countries overseas
that literally have threatened us.
Most recent, North Korea. They said, stay out of it, Uncle Sam. We
will sell ballistic missiles to your enemies. And if you want us to
stop it, pay us.
What do we expect? We reward China through our Tax Code. And they
once threatened, some say passively, to nuke Los Angeles after they
made a passive statement about Taiwan.
Look, the American people are taxed off, they are tired of the taxes,
and they know the Tax Code is not fair. They want Congress to change
it. And there is only one way to change it. We have to scrap this Tax
Code.
I would hope the Democrats would take another tack by the year 2002
and submit a substitute. I do not think either of the two major
substitutes that the Republicans are talking about is the right answer.
I think we should cut income taxes drastically but leave some of them
on and add to it a value-added or a sales tax more specifically for the
balance and see how the system works. And if it is possible in the
future to scrap the entire income Tax Code, fine. But make it a
limited, small, flat tax. Give the American people more of their
income. Let them make the choices.
I believe the Republicans are on the right track here. I cannot
believe the Democrats are fighting this proposal. I want to say today,
it is time to sunset the Tax Code because the Tax Code has lived out
its days in the sun. The American people know it and they are tired.
In addition, as one last thing, look at the whole tax structure. If
we fix up our homes, we pay more taxes; let our homes go to hell, we
get a tax break; work hard, we pay a lot of taxes; do not work, the
government sends us a check. I think we have it all screwed up, folks.
One last thing. If we find ourselves in the tax court against the
IRS, the burden of proof is even on the taxpayer. It took 14 years to
get us to look at that. We ought to be ashamed of ourselves.
I support the bill. I support this rule. And I ask everybody to
support the rule and the bill.
Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, one of our previous speakers, the gentleman from
California (Mr. Stark) characterized this legislation as silly. It
would be one thing if this were just silly.
What the Republicans are proposing is dangerous. What they want to do
is they want to end the code and have nothing in its place. If that
were to pass and become law, and I do not believe it will become law,
but if it were to pass and become law to eliminate the code, with
nothing in its place, there will not be a person in this country who
will be able to purchase a home and rely on any type of mortgage
deduction, there will not be a city or a county that will be able to
issue a bond to build a school or build a highway.
This is not just silly, this is dangerous. What the Republicans are
suggesting is an enormous dice roll that could lead us to become a
third-world banana republic with no Tax Code, with no structure in
place, simply because they want to make a rhetorical point.
What we do here on this floor is serious business. We are not here
playing games. With this bill, the Republicans, who do not have the
courage to bring a proposal to the floor, a reform proposal, are saying
to the American public they do not care if this economy crashes and
burns. If they cared about the economy of the United States, they would
do the right thing, they would bring forward a reform proposal and say,
here is what we stand for. Here is what we want. Vote it up or down.
But they lack the courage to do that.
What they want to do is say, let us risk no one being able to get a
home mortgage, let us risk not a single municipality in this country
being able to issue a municipal bond, so that they could say, oh, we
did something; we abolished the Tax Code.
There are a lot of changes that need to be made in our Tax Code.
Everybody understands that. And we have a proposal that we are prepared
to offer.
I would advise my colleague on the other side that the speaker that
we had been anticipating has come on the floor, so that I will need to
yield some time to him. And then I will have to reclaim my time because
I have one point I have to make before I close.
Mr. Speaker, I yield 5 minutes to the gentleman from New York (Mr.
Rangel), the ranking Democrat on the Committee on Ways and Means.
(Mr. RANGEL asked and was given permission to revise and extend his
remarks.)
Mr. RANGEL. Mr. Speaker, one of the great things about being a Member
of Congress is that we follow a real tradition, that our Founding
Fathers set up a Constitution which allowed the people to express their
concern through us.
They did not say that they wanted chairmen of committees to find out
what is best for America. They did not say it should be the President
or the Supreme Court. They said that in this House of Representatives,
the people of the United States of America should speak.
And that is why we have only a 2-year term so that, if we misspeak,
the voters may not be able to get to the Senate, they may not be able
to express their disagreement with the President, they darn sure cannot
reach the Supreme Court, but we are here to be held accountable.
To protect us, we have a committee system, because it is common
knowledge that we were not elected based on our IQ rates. We were
elected to find out and to search for the truth. And in most every
piece of legislation, we have more than two sides of the issue; and,
so, we have hearings and we have experts and we are able to get staff,
Republican and Democrat, who are experts to review this so that when
the committees report to the House, most of the work is done, the
arguments are crystallized, and the Members have an opportunity to
vote.
For 200 years, the Committee on Ways and Means has had the
constitutional responsibility to raise the revenues and to provide the
ways and the means for this great Nation to move forward. But under
recent majority leadership, it was decided in some back room that we do
not need any committees, we do not need any subcommittees, we do not
need any committee chairmen, all we need is a Speaker and one good
press relations person.
And, so, instead of legislation, we get press releases, we get one
press release that the whole IRS, the whole code, is going to be
abolished not because the Ways and Means Republicans said it, but
because the Speaker said it.
If he can eliminate our ability to pay taxes with legislation, maybe
he can eliminate our ability to have to pay our indebtedness, maybe we
can eliminate cancer, maybe we can do a variety of things just by one-
shot legislation not going through any responsible committee.
Where is the chairman of the Committee on Ways and Means? How are we
letting the institutions of this House just fall apart? Whether we are
for term limits or not, we have an obligation to leave this House in as
good a shape as we found it.
And now we find that we have an education tax bill coming out of the
Committee on Rules because there was an amendment on the Senate floor.
I am

[[Page H4647]]

not here to say anything about the Senate. If they wake up and want to
pass an amendment, they can do it. They do not need hearings over
there.
But it is assumed that when they amend a bill that this House will be
responsible and that we would have hearings and we will have experts
and when people discuss and our staff discuss what does the bill mean,
that we will be in the position to say that it is not a rip-off, it is
sound, good tax policy that makes some sense.
Ask any American that knows the serious nature of our education
problem in this country whether giving them a $2,000 savings account
interest free is going to better the education of their kids. If the
kid goes to private school, they save 37 bucks. If they are poor enough
to have their kid go to public school, they save 7 bucks. And if they
do not have $2,000 to save at all, they save nothing.
So it just seems to me that far more important than the legislation
is the process in which this bill comes to the floor, without hearings,
without witnesses, without any of the members of the Committee on Ways
and Means, without a liberal point of view, without a conservative
point of view. Where are the educators to say, what are we doing to
help education?
Mr. Speaker, this is a wrong way for the House of Representatives to
proceed.
Mr. HASTINGS of Washington. Mr. Speaker, how much time is remaining
on either side?
The SPEAKER pro tempore (Mr. Oxley). The gentleman from Washington
(Mr. Hastings) has 22 minutes remaining, and the gentleman from Texas
(Mr. Frost) has 12 minutes remaining.
Mr. FROST. Mr. Speaker, I reserve the balance of my time.
Mr. HASTINGS of Washington. Mr. Speaker, I yield 6 minutes to the
gentleman from Oklahoma (Mr. Largent) the author of this legislation.
Mr. LARGENT. Mr. Speaker, I thank my colleague, the gentleman from
Washington for yielding me the time.
I am one of those people that believe that God created the heavens
and the Earth and that he created man in his own image. That used to be
indisputable. Unfortunately, we live in a time that some people now
dispute that. I do not. And I think that it is informative to
understand that when God created man in his own image, he gave us some
instructions, some very simple instructions.
I make no apologies to the ACLU. These are the Ten Commandments that
God gave us as his instructions of how to live and conduct our lives in
a productive and healthy way. Those are the Ten Commandments.
Now, God expanded on the Ten Commandments through using the divine
inspiration of man and he expanded on those and we now have the Bible,
which again is God's expanded version on how we are to conduct our
lives. The Creator, the wisdom of the universe, has given us the Bible
as an instruction manual about how to conduct our lives. Here is the
Bible. Here are the Ten Commandments.
When Jesus came, in fact, he basically boiled down all of this into
one simple paragraph when he said that we are to love the Lord, our
God, with all our hearts, souls, and minds and our neighbors as
ourselves. That sums up all of the instructions that God has given us
of how to conduct our entire life.
Now, let me contrast that with this. The IRS, telling us how to file
our tax returns, this is what they do. First of all, here is the
Internal Revenue tax code right here, this stack of books. That is the
tax code that has been passed by Congress since 1913.
This tax code has grown 100 pages every year since it was created in
1913 by Congress, 100 pages. In fact, the 105th Congress just last year
passed 400 changes in one bill, passed 400 changes to the tax code,
added 325 pages to the tax code.

{time} 1130

Here is the Tax Code. That is the commandments the Internal Revenue
Service gives to the taxpayers about how to file your tax return.
These are the instructions God gives us to live our lives. Here is
the Tax Code about how to file your tax return.
The IRS was kind enough to expand the rules on how to file your tax
return. Here are the instructions and the forms that the IRS has given
to us, in giving us direction about how to file our tax returns in this
country, 6,200 pages of instructions and forms about how to file your
tax returns in this country, right here. That is what this represents,
from the Internal Revenue Service.
Do I need to go on any further about what the problem is with the
current Tax Code? I do not think so. It is too complex, it is too
onerous, it needs to go. We need to pull it out by its roots.
Mr. Speaker, let me quote a very distinguished colleague of mine from
the House of Representatives. This is what he said in 1996:
``Let me be very clear about this: nobody likes today's Tax Code.''
And again in 1997:
``But let's also understand that the complexity of our Tax Code
undermines the confidence of the American people in their government
and, in part, leads to the problems we're addressing today. Today's
action is just a partial solution. The real solution is abolishing the
IRS Code and starting over building a tax system that's fair and makes
sense. A Tax Code that allows people to make decisions based on what's
in their family's best interest, not because of some tax gimmick or
loophole.''
``Today we're striking a blow for reform. Let's not delay the next
step, the need to abolish the Tax Code and start over with real
reform.''
``Decades of toying and tinkering at the margins have only made the
problem worse. And I've concluded that the only way to fix anything is
to replace everything, to overhaul the entire system, from top to
bottom.''
``Tax reform is the path to achieving real progress towards
simplicity and fairness.''
``The Tax Code is riddled with preferences.''
Again finally in 1998:
``Our Tax Code has become a dense fog of incentives, inducements, and
penalties that distort the most basic economic decisions, constrain the
free market, and make it hard for Americans to run their own lives.''
My distinguished colleague, the minority leader, Dick Gephardt, has
been saying that what we are about to vote on, the Tax Code Termination
Act, is needed, it restrains the economy, it keeps people from
experiencing the freedom in this country, what we are all about. The
Tax Code and pulling the Tax Code out by the roots and abolishing it
and starting over and having a real comprehensive debate on tax reform
is desperately needed.
The Tax Code Termination Act that sunsets the Tax Code 2 years after
the next presidential election year does several things. One is it
assures us that we will in fact do it and quit just talking about it.
The second thing it does, and probably most importantly, is that it
includes all Americans in the discussion, because we will have a quasi-
national referendum through the next presidential election year that
says, what do you want for comprehensive tax reform. This will be a
bill that will be written not by special interests in Washington, D.C.,
but by the American people, and the genius and the creativity of the
American people.
I would urge my colleagues this morning to vote yes on the rule and
yes on the Tax Code Termination Act. Let us pull the Tax Code out, have
a comprehensive, full debate and dialogue over a 4\1/2\ year period of
time. I believe that we can come up with a system that is more fair,
certainly more simple than the one that we currently have.
Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would like to ask the gentleman who was in the well a
question. I did not want to intrude on his time but I would like to ask
him a question if I may. The gentleman in the well pursued a very
distinguished career as a professional athlete prior to being elected
to Congress. Many professional athletes as a part of their salary
negotiations come up with deferred compensation. I would ask the
gentleman if in, during his career, if part of his compensation was
deferred compensation that will be paid out in a future year.
Mr. LARGENT. Mr. Speaker, will the gentleman yield?
Mr. FROST. I yield to the gentleman from Oklahoma.

[[Page H4648]]

Mr. LARGENT. Yes, it was.
Mr. FROST. Is the gentleman prepared to forgo the tax advantages that
he negotiated as a part of his contract when he was a professional
athlete if we wind up having no code? If we are sunsetted and we have
no code, then he would lose all the advantages that he negotiated
during his playing career and presumably would have to realize that as
current income in one year.
Mr. LARGENT. I guess the question that I would ask in reverse to the
gentleman is are you prepared to defend the current Tax Code in its
current form or do you really want tax reform in a comprehensive
nature?
Mr. FROST. I just asked my distinguished colleague who apparently
received a considerable tax advantage in his contract negotiations
during his professional career, which he certainly was entitled to do,
whether he is prepared when we have the absence of a code to forgo all
the tax advantages that he secured during his playing years.
Mr. LARGENT. I would tell the gentleman in all sincerity that I am
prepared to do that and would do it willingly, that I participated in a
number of the tax shelters that the Congresses in the past created that
were a total disaster, and I would have been far better off just to pay
the taxes and not been allowed to do the things that were allowed by
past Congresses.
Mr. FROST. I would ask the gentleman why he participated in all those
tax shelters. Was this on the advice of counsel? Was this on the advice
of his agent? He is a grown man and could make those kind of decisions
of course in terms of how he conducted his own affairs.
Mr. LARGENT. Absolutely it was on the advice of counsel, to take
advantage of the tax loopholes and shelters and everything else that
have been created in Congresses past.
Mr. FROST. I would only ask the gentleman one other question. He
talked about 100 pages being added to the code last year.
Mr. LARGENT. 400 pages.
Mr. FROST. 400. Did the gentleman vote for the legislation that added
those pages?
Mr. LARGENT. I did.
Mr. FROST. Was he concerned at the time that he voted for the
legislation about the amount of pages that were being added to the
code?
Mr. LARGENT. Very much so.
Mr. FROST. But he voted for it anyway.
Mr. LARGENT. Yes, sir.
Mr. FROST. I thank the gentleman.
Mr. Speaker, I yield 3 minutes to the gentleman from Washington (Mr.
McDermott), a distinguished member of the Committee on Ways and Means.
(Mr. McDERMOTT asked and was given permission to revise and extend
his remarks.)
Mr. McDERMOTT. Mr. Speaker, I sat and listened to the gentleman from
Oklahoma talk about his desire to rip the Tax Code out by its roots. By
the analogy he used, he stood up here and told us what God did, and I
suppose that if he did not like something in the world, he would also
say that we should go back to the beginning when it was form and void
and God created all the world again. He wants this country to go to a
position where there is no Tax Code whatsoever. Now, when he points to
all those books of rules and he admits that he himself participated in
taking advantage of the Tax Code, he wants us to throw all that away.
Well, first of all, in this country, three-quarters of the people in
this country do not itemize their deductions. They do not use hardly a
single page in that book of rules and regulations that he himself was a
real advantage taker. The gentleman from Texas (Mr. Frost) asked him a
question about whether or not he added these pages to the law last
year. Now, if I had his Bible up here, it would be smaller than the
number of pages which he voted to put into the Tax Code. Now, the
people in his district and the people in this country ought to ask, are
these people really serious? Are they serious? Last year they came out
here and very proudly passed 800 pages of additions to the Tax Code and
beat their breasts and said they made it better for every American. And
this year they come in and say, last year what we did was stupid. We
want to tear it all out and throw it away and start again.
Now, you have to ask yourself, which person should you believe? The
one that last year passed all 800 pages and was proud of every single
thing that is in here? Or are they proud of they are now going to tear
it out?
Let me tell my colleagues what it means to ordinary Americans. If
they take this bill and pass it and say in 3 years we are not going to
have a Tax Code, how is an American going to buy a house or sell a
house in this country when you do not know where the interest deduction
that we all take advantage of when we buy a House, where will that be?
Will that be included in this next Tax Code? Or will it not? I mean,
the whole real estate industry in this country is based on the fact
that we can take a deduction for the interest that we pay on our
mortgages. What will that mean as to the value of our house? If you
cannot take the deduction, does the value go up or does the value go
down? How do you make a decision as Americans? This is the stupidest
idea I have seen in 10 years.
Mr. HASTINGS of Washington. Mr. Speaker, I yield 2 minutes to the
gentleman from New York (Mr. Paxon).
Mr. PAXON. Mr. Speaker, this is clearly an historic day in the
history of this great legislative body. It is an historic day because
it offers such a clear choice between two competing visions of how this
institution should work. On one hand, we are hearing it today across
the aisle, the defenders of the status quo in Washington. They like the
5.5 million word Tax Code. They think it is just fine because they
spent their careers building it up, for one reason: They like high
taxes. They think government should take money from the American
people, send it here to Washington so the bureaucracy can spend it.
They like the uncertainty that comes with the current Tax Code because
it confuses people and they do not know what their tax situation is
because over half of Americans because of this code are forced to seek
professional assistance in rendering their taxes, and that does not
even count the folks who have to seek professional psychiatric
assistance once they are done trying to figure all this out. They like
the fact that the special interests drive the debate because it is done
behind closed doors and the American people never get a chance to have
at these reforms, so-called reforms, of the current Tax Code.
Mr. Speaker, on the other hand, it is all the rest of the country and
an awful lot of us here in the Congress who think this is historic
because we are going to change it. This legislation, the legislation
that we have put forward today, reverses the trend. We are going to let
the American people decide. We are going to say 4 years from now, the
Tax Code is gone, you know it, we are going to end the skepticism, the
American people can come forward and get their representatives and tell
them what they want in the Tax Code, not just the folks in Washington
in the K street community. The American people will have a choice for a
change.
I believe it will result in a clearer Tax Code, a more understandable
Tax Code, a Tax Code that most importantly takes less money out of the
pockets of the American people. And would that not be a great change
for the better in this country?
Mr. Speaker, this is truly a moment of great history in this
legislative body. The gentleman from Oklahoma (Mr. Largent) and I
believe very strongly that the Tax Code Termination Act will help move
this country forward in the global economy. It will help this Congress
reestablish our credibility with the American people that for 40 years
looked at Congress and saw it in the hip pocket not of the American
people but of the special interests.
Mr. HASTINGS of Washington. Mr. Speaker, I yield 3 minutes to the
gentleman from Florida (Mr. Weldon).
Mr. WELDON of Florida. Mr. Speaker, I thank the gentleman for
yielding me this time, and I rise in support of this bill and encourage
all my colleagues to vote in support of it. The current Tax Code is
complex, confusing, corrupt, costly and coercive. Even experts do not
agree on the Tax Code. Some studies actually show that the IRS itself
gives the wrong answers to questions from taxpayers up to as often as
40 percent of the time. Money magazine gave a hypothetical tax return
to 45 different tax preparers nationwide.

[[Page H4649]]

The result? Forty-five different responses, ranging from paying 123
percent too much in taxes to 14 percent too little. Thirty-three of the
45 preparers exceeded the acceptable range of error by $1,000. And for
these erroneous tax returns, the tax preparers charged from $300 to
$4,950.
The current Tax Code is costly to our economy. It costs Americans
between $157 to $22 billion per year just to prepare the taxes. This
$157 for each person could be invested in schools, businesses or in
savings. Enforcement for the Federal Government itself costs $13.7
billion per year. Businesses spend between $4 and $7 in keeping up with
the taxes they owe for each $1 in taxes they pay. It costs taxpayers
5.3 billion hours to comply with the code. This is more than it takes
to produce all the cars and trucks in America and is equal to 2 weeks
of American productivity nationwide.

{time} 1245

H.R. 3097, the Tax Code Termination Act, is simple. It directs
Congress to enact a new Tax Code by July 4, 2002.
What is so bad about that?
It ends the existing Tax Code on December 31 of that year, six months
after the initial enactment of the new code. Calls for a fairer and
flatter Tax Code are made in this bill. It will enable the American
people to have a national debate about how they want the Tax Code to
change and become fairer and more simple. It will ensure that the Tax
Code is replaced with one that has been vetted out by the American
people and not decided by special interests in Washington.
Mr. Speaker, this bill is a good piece of legislation. The American
people are fed up with the complicated Tax Code laws that they now have
to live under. They want more, they demand more, they deserve more.
They deserve a better system, and what is more important, we are
heading into a new millennium, a new century, a new age, and we need to
have a Tax Code that will enable America to continue to be competitive
and lead the world.
Mr. Speaker, I encourage all my colleagues to vote in support of this
legislation.
Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I hate to engage in elementary civics lessons, but I
think it is important that we understand, and particularly people
outside this Chamber understand, how the Congress of the United States
works.
The Republicans are in the majority. They control what bills come to
the floor through the Committee on Rules that I serve on, and they also
control what bills are reported out of the Committee on Ways and Means
on which the gentleman from New York (Mr. Rangel) serves.
They are in the majority. If they want to change the Tax Code as the
majority party, they have the ability to report a bill out of the
Committee on Ways and Means changing the code.
Whether it is the flat tax, whether it is the value-added tax really
does not make any difference. They are in control. They can bring a
bill to the floor.
Mr. Speaker, they lack the courage of their own convictions. They
will not bring a bill to the floor. Why will they not bring a bill to
the floor? I do not know. Maybe they have a disagreement inside their
own caucus, maybe some of these ideas are a little bit crazy, maybe
they do not have enough votes to pass anything. I do not know why they
do not bring a bill to the floor. They are in charge; they have the
votes. If they want to reform the Tax Code, bring a bill for this House
to vote on.
What do they do? They risk financial chaos in this country by tearing
down the current code which admittedly has a lot of problems and needs
to be fixed and not offer a single alternative to the current code.
If they really want tax reform, bring a bill to this floor and have
us vote on it.
Mr. Speaker, I urge Members to vote no on the previous question. If
the previous question is defeated, I will offer a substitute to the
rule that will allow for a responsible debate on real tax reform for
the Tax Code, not simply election year grandstanding. The rule I will
offer will make in order the Armey flat tax proposal as base text. It
will also make in order 2 substitutes to that bill, the Gephardt
simplified tax bill and the Tauzin sales tax legislation. Members will
have the opportunity to vote up or down on all of these proposals. The
substitute that passes and receives the most votes will be the one that
is considered as adopted.
Mr. Speaker, if we are serious about reforming or replacing the
current Tax Code, let us not fool around with meaningless and
irresponsible legislation that could jeopardize our economy and our
government. Let us take action on real legislation that addresses the
issue, not frivolous legislation that does nothing except provide a
handy campaign slogan.
Mr. Speaker, I ask unanimous consent to insert the text of my
substitute rule and extraneous materials at this point in the Record.
The SPEAKER pro tempore (Mr. Oxley). Is there objection to the
request of the gentleman from Texas?
There was no objection.
The text of the substitute rule and extraneous materials are as
follows:

Previous Question for H. Res. 472--Tax Code Termination Act

Strike all after the resolving clause and insert in lieu
thereof the following:
Resolved, That at any time after the adoption of this
resolution the Speaker may, pursuant to clause 1(b) of rule
XXIII, declare the House resolved into the Committee of the
Whole House on the state of the Union for consideration of
the bill (H.R. 1040) to promote freedom, fairness, and
economic opportunity for families by reducing the power and
reach of the Federal establishment. The first reading of the
bill shall be dispensed with. General debate shall be
confined to the bill and shall not exceed one hour equally
divided and controlled by the chairman and ranking minority
member of the Committee on Ways and Means. After general
debate the bill shall be considered for amendment under the
five-minute rule and shall be considered as read. No
amendment shall be in order except the amendments in the
nature of a substitute specified in section 2 of this
resolution. Each amendment may be offered only in the order
designated, may be offered only by the Member designated or
his designee, shall be considered as read, shall be debatable
for one hour equally divided and controlled by the proponent
and an opponent, and shall not be subject to amendment. All
points of order against the amendments specified in section 2
are waived. If more than one amendment in the nature of a
substitute is adopted, then only the one receiving the
greater number of affirmative votes shall be considered as
finally adopted and reported to the House. In the case of a
tie for the greater number of affirmative votes, then only
the last amendment to receive that number of affirmative
votes shall be considered as finally adopted and reported to
the House. The chairman of the Committee of the Whole may:
(1) postpone until a time during further consideration in the
Committee of the Whole a request for a recorded vote on any
amendment; and (2) reduce to five minutes the minimum time
for electronic voting on any postponed question that follows
another electronic vote without intervening business,
provided that the minimum time for electronic voting on the
first in any series of questions shall be 15 minutes. At the
conclusion of consideration of the bill for amendment the
Committee shall rise and report the bill to the House with
such amendments as may have been adopted. The previous
question shall be considered as ordered on the bill and
amendments thereto to final passage without intervening
motion except one motion to recommit with or without
restrictions.
Sec. 2. The amendments described in the first section of
this resolution are as follows:
(1) An amendment in the nature of a substitute consisting
of the text of H.R. 2001 if offered by Representative Dan
Schaefer of Colorado;
(2) An amendment in the nature of a substitute consisting
of the text of H.R. 3620 if offered by Representative
Gephardt of Missouri; and
(3) An amendment in the nature of a substitute consisting
of the text of H.R. 1040 if offered by Representative Armey
of Texas.
Amend the title to read: Providing for consideration of the
bill (H.R. 1040) to promote freedom, fairness, and economic
opportunity for families by reducing the power and reach of
the Federal establishment.

The majority argues that our attempt to defeat the previous question
is futile because our proposed amendment is not germane. The fact of
the matter is that the chair has not made a ruling nor heard our
arguments as to the germaneness of our amendment. The only way to make
that determination is to allow us to offer the amendment by defeating
the previous question.
This vote, the vote on whether to order the previous question on a
special rule, is not merely a procedural vote.
A vote against ordering the previous question is a vote against the
Republican majority agenda and a vote to allow the opposition, at least
for the moment, to offer an alternative plan.
It is a vote about what the House should be debating.
The vote on the previous question on a rule does have substantive
policy implications. It is

[[Page H4650]]

one of the only available tools for those who oppose the Republican
majority's agenda to offer an alternative plan.
I ask unanimous consent to insert material in the Record at this
point.

The Vote on the Previous Question: What it Really Means

This vote, the vote on whether to order the previous
question on a special rule, is not merely a procedural vote.
A vote against ordering the previous question is a vote
against the Republican majority agenda and a vote to allow
the opposition, at least for the moment, to offer an
alternative plan. It is a vote about what the House should be
debating.
Mr. Clarence Cannon's ``Precedents of the House of
Representatives,'' (VI, 308-311) describes the vote on the
previous question on the rule as ``a motion to direct or
control the consideration of the subject before the House
being made by the Member in charge.'' To defeat the previous
question is to give the opposition a chance to decide the
subject before the House. Cannon cites the Speaker's ruling
of January 13, 1920, to the effect that ``the refusal of the
House to sustain the demand for the previous question passes
the control of the resolution to the opposition'' in order to
offer an amendment. On March 15, 1909, a member of the
majority party offered a rule resolution. The House defeated
the previous question and a member of the opposition rose to
a parliamentary inquiry, asking who was entitled to
recognition. Speaker Joseph G. Cannon (R-Illinois) said:
``The previous question having been refused, the gentleman
from New York, Mr. Fitzgerald, who had asked the gentleman to
yield to him for an amendment, is entitled to the first
recognition.''
Because the vote today may look bad for the Republican
majority they will say ``the vote on the previous question is
simply a vote on whether to proceed to an immediate vote on
adopting the resolution . . . [and] has no substantive
legislative or policy implications whatsoever.'' But that is
not what they have always said. Listen to the Republican
Leadership ``Manual on the Legislative Process in the United
States House of Representatives,'' (6th edition, page 135).
Here's how the Republicans describe the previous question
vote in their own manual: ``Although it is generally not
possible to amend the rule because the majority Member
controlling the time will not yield for the purpose of
offering an amendment, the same result may be achieved by
voting down the previous question on the rule. . . . When the
motion for the previous question is defeated, control of the
time passes to the Member who led the opposition to ordering
the previous question. That Member, because he then controls
the time, may offer an amendment to the rule, or yield for
the purpose of amendment.''
Deschler's ``Procedure in the U.S. House of
Representatives,'' the subchapter titled ``Amending Special
Rules'' states: ``a refusal to order the previous question on
such a rule [a special rule reported from the Committee on
Rules] opens the resolution to amendment and further
debate.'' (Chapter 21, section 21.2) Section 21.3 continues:
``Upon rejection of the motion for the previous question on a
resolution reported from the Committee on Rules, control
shifts to the Member leading the opposition to the previous
question, who may offer a proper amendment or motion and who
controls the time for debate thereon.''
The vote on the previous question on a rule does have
substantive policy implications. It is one of the only
available tools for those who oppose the Republican
majority's agenda to offer an alternative plan.
____

Department of the Treasury,

Secretary of the Treasury,

Washington, DC, June 16, 1998.
Hon. Newt Gingrich,
Speaker, House of Representatives,
Washington, DC.
Dear Mr. Speaker: I am writing to express my grave concern
over H.R. 3097, the ``sunsetting'' bill that would
effectively repeal the Internal Revenue Code without
providing for its replacement. If presented to him, I would
recommend that the President veto the bill.
The President stands ready to consider carefully all
proposals to reform the tax system. He will evaluate these
proposals by using four criteria: fairness, fiscal
responsibility, impact on economic growth, and
simplification. In contrast, it would be irresponsible for
the Congress to enact legislation to terminate the tax code
without having already provided a reform plan to replace it.
Moreover, none of the proposals currently under discussion by
Members of Congress meet the President's four criteria. At a
time when the country is experiencing the strongest economy
in a decade, we simply cannot allow that economy, the
nation's fiscal discipline, and the well-being of its
families to be put at risk.
Proposing to sunset the tax code is a deeply flawed idea
that, if enacted, would harm our strong economy. Many
families, for example, would refrain from buying homes
because of the uncertain tax treatment of mortgage interest
and property taxes (as well as other State and local taxes),
that would harm current homeowners. Many businesses would
hire fewer workers and make fewer capital investments because
of uncertainties in how taxes would affect the return on
productive assets. Furthermore, the uncertainty of the size
of future receipts would raise the specter of increased
Federal deficits which in turn would raise interest rates and
weaken or destroy economic growth.
Adoption of this legislation would have many other harmful
effects on the well-being of families. A family's health
insurance would be threatened because the tax status of
employer-provided health benefits would be uncertain. Hope
Scholarships that make higher education more affordable for
students would be in jeopardy as would child tax credits that
help families with the costs of child-rearing. The structure
of employer-provided pensions and tax incentives for
retirement saving could be altered in ways that could harm
retirement income security. In short, enactment of this
legislation would create substantial risks to our economy and
the American people.
The right way, the responsible way, to reform is to work to
reduce unwarranted complexity in our tax laws, to increase
their fairness and efficiency, to enact responsible
legislation restructuring the Internal Revenue Service, and
to continue to refocus it on customer service. Last year, for
example, President Clinton proposed and signed into law 40
tax simplification measures as part of the balanced budget
agreement. As a result of that simplification 99 percent of
homeowners will not have to pay capital gains tax when they
sell their home, 9 out of 10 corporations will not have to
worry about complex alternative minimum tax calculations, and
many dependent children will be able to earn a greater income
without being subject to tax. Furthermore, the President
wants to see a responsible IRS restructuring bill on his desk
as soon as possible.
In conclusion, I urge you and all members of the House of
Representatives to vote against H.R. 3097 when it is
considered later this week.
Sincerely,
Robert E. Rubin.
____

National Association

of Manufacturers,

Washington, DC, June 16, 1998.
Hon. Newt Gingrich,
Speaker of the House,
Capitol Building, Washington, DC.
Dear Mr. Speaker: On behalf of the NAM's 14,000 members,
and of the 18 million people employed in manufacturing, I
urge you to oppose H.R. 3097, the ``Tax Code Termination
Act.''
Let me make it clear, however, that this is in no way a
defense of the current federal tax code. The attached
resolution, adopted by our board of directors more than two
years ago, makes it quite clear that we believe ``the federal
tax system as now configured is beyond repair and should be
scrapped and replaced with a new model,'' [emphasis added]
But, while we defer to no one in our enthusiasm for
scrapping the tax code, we do not support doing so until such
time as a replacement code has been agreed upon and the
numerous problems involved in transitioning from the old law
to the new law have been satisfactorily resolved.
In our view, the numerous real problems associated with so-
called ``expiring provisions'' already in the code--such as
the research and experimentation tax credit--should be enough
to dissuade anyone from taking the approach of H.R. 3097.
These provisions frequently do expire, vastly complicating
business and investment planning because taxpayers are
uncertain as to whether the provision will be reinstated and,
if so, whether such reinstatement will be retroactive.
Thank you for considering our views in opposition to H.R.
3097.
Sincerely,
Paul R. Huard.
Enclosure.
____

National Association of Manufacturers Board of Directors Meeting--
February 10, 1996

resolution on growth and taxes

The single biggest obstacles to increased economic growth
is our impossibily complex and ever-changing tax code. And as
1996 unfolds, signs of a weakening economy make it more
important than ever to focus the nation's policy priorities
on the critical need for increased economic growth. The NAM
continues to believe that technological advances, worldwide
competitive pressures, productivity improvements and other
factors have substantially raised the economy's potential for
non-inflationary growth. Those arguing growth must be held at
or below 2.5 percent to avoid a resurgence in inflation are
ignoring the enormous transformations that have occurred in
manufacturing. In our view, a target growth rate of three
percent or more is not only attainable but also essential. We
can see no other way to improve incomes and living standards
for American wage-earners while at the same time maintaining
U.S. global competitiveness.
But we can't get there with our existing tax structure.
There is a growing consensus among policymakers that the
federal tax system as now configured is beyond repair and
should be scrapped and replaced with a new model. We agree,
and believe our present anti-employee, anti-growth tax system
should be replaced with a pro-employee, pro-growth model
having these characteristics:
Simplicity. This should be paramount. The new system should
be one that average wage-earners can both understand and
believe to be fair. The current code is not only
incomprehensible to most taxpayers but also gives rise to the
suspicion that it can be manipulated by high-income
taxpayers. What's needed is a simple low-rate system with
relatively few deductions or other adjustments.

[[Page H4651]]

The billions of dollars currently wasted on compliance costs
of the current system could then be applied to more
productive uses.
Elimination of Multiple Taxation. Income once taxed should
not be subjected to multiple taxation just because it is
saved or invested rather than consumed. The highly regressive
situation whereby wage income is subjected to both income and
payroll taxes must also be corrected. Similarly, business
income should be taxed only once so that, among other things,
corporate profits paid out as dividends are not taxed to both
the corporation and the shareholder. And, business taxes
under any new system should be compatible with those of our
trading partners so that, for example, American exports are
not double-taxed by the U.S. and the destination country.
Stability. Present tax laws are both disliked and hard to
understand in large part because they are in a constant state
of flux. Once a new, simple tax system is in place,
procedures--such as supermajority voting requirements--should
be adopted to ensure that future revision is both difficult
and infrequent.
Recent analysis concludes that excessive levels of taxation
have been a significant drag on economic growth. Reversing
this trend by adopting a tax system that is not biased
against work, savings and investment should be one of our
highest national priorities. The resulting dynamic growth
will benefit businesses and their employees alike.
____

American Federation of Labor and Congress of Industrial
Organizations,
Washington, DC, June 16, 1998.
Dear Representative: The AFL-CIO strongly urges you to help
protect America's working families from serious economic
hardship by voting against H.R. 3097, the Tax Code
Termination Act.
The AFL-CIO is very disappointed that the leadership of the
105th U.S. Congress has, once again, decided to waste its
time on an extreme measure like H.R. 3097--legislation which
would eliminate the Internal Revenue Code by December 31,
2001, without specifying which alternative tax system would
replace it.
Needless to say, H.R. 3097 would hurt our nation's working
men and women in several different ways. It would make buying
a home more expensive for working families by eliminating the
mortgage interest tax deduction. It would reduce employer-
provided health and pension benefits for America's workers by
abolishing all of the tax incentives which currently help
make these important benefits more affordable and more
available. In fact, this deeply flawed legislation would also
harm those who need help the most by repealing the $500 child
tax credits and the $1,500 Hope Scholarships which currently
help millions of working families raise and educate their
children.
H.R. 3097 would also create economic uncertainty for all
American businesses. By not specifying which alternative tax
system would replace the current one, H.R. 3097 would
discourage businesses from making any new capital investments
until Congress decided how the new tax system would affect
them. In turn, this reduction in private investment could
substantially increase interest rates and the federal deficit
by dramatically decreasing productivity and federal revenues.
Finally, H.R. 3097 would devastate thousands of America's
religious institutions, social service organizations,
cultural institutes, colleges, and universities by
eliminating the tax deduction for charitable contributions.
For all of these reasons, the AFL-CIO strongly urges you to
vote against H.R. 3097.
Sincerely,

Peggy Taylor,

Director,
Department of Legislation.
____

Tax Executives Institute, Inc.,

Washington, DC, June 16, 1998.
Re proposal to sunset the Internal Revenue Code.

Hon. Newt Gingrich,
Speaker of the House, House of Representatives, Rayburn House
Office Building, Washington, DC.

Hon. Richard Gephardt,
Minority Leader, House of Representatives, Longworth House
Office Building, Washington, DC.
Dear Speaker Gingrich and Minority Leader Gephardt: On
behalf of Tax Executives Institute, I am writing to express
the Institute's serious concern about proposals to sunset the
Internal Revenue Code on a designated date without specifying
a replacement tax system. In our view, these proposals
reflect either a misapprehension of the importance of
certainty and predictability to business enterprises and
individuals or a disregard for the consequences of
``terminating'' the tax system. They illustrate the folly of
making tax policy by sound bite and should be rejected.

background

Tax Executives Institute is the principal association of
corporate tax executives in North America. TEI is a
nonpartisan not-for-profit membership association that
represents approximately 5,000 in-house tax professionals
employed by 2,800 of the leading companies in the United
States and Canada. TEI is dedicated to the development and
effective implementation of sound tax policy, to promoting
the uniform and equitable enforcement of the tax laws, and to
reducing the cost and burden of administration and compliance
to the benefit of taxpayers and government alike. TEI members
deal with, and are frustrated by, the complexities of the tax
laws on a daily basis, and know that abrupt or ill-conceived
shifts in the law--changes without due consideration of
transitional issues--exact a heavy toll.

Sunsetting the Code: A Beguiling but Unwise Move

Later this week, the House of Representatives is scheduled
to vote on H.R. 3097, which is styled ``The Tax Code
Termination Act.'' The legislation would sunset the Internal
Revenue Code on December 31, 2001. Although the legislation
includes a hortative declaration that any new federal tax
system should be approved by Congress in its final form no
later than July 4, 2001 (to permit a six-month transition to
the new system), there is no assurance that the principles
underlying a replacement system could be agreed upon, that
the new system's contours could be defined, and that
meaningful and comprehensive transition rules could be
developed in time to meet that ambitious deadline. What is
more, there is substantial doubt whether, even if the Fourth
of July 2001 target were met, the six-month transition period
contemplated by the legislation would be sufficient to avoid
major disruptions in particular industries or the economy as
a whole.
Given our members' ongoing experiences with the tax laws,
it should come as no surprise that TEI supports efforts to
improve and simplify the Internal Revenue Code. Moreover,
while the Institute itself has not taken a position on which
of the competing tax reform proposals should be adopted (in
large measure because of the diversity of our membership and
the divergence of their views). We fully understand the
desire of many members of Congress ``to scrap the Code'' and
replace it with a different system. And we appreciate the
popular appeal of striving to make the tax law simpler and
fairer.
The legislation before the House, however, is nothing more
than a Siren's song--alluring but ultimately dangerous--
because it is far from clear how the legitimate objectives of
tax reform can best be achieved. The ongoing debate in
Congress and the country at large, while spirited,
demonstrates that finding consensus will not be easy or
quick. Even assuming that agreement can be expeditiously
achieved on ``where'' tax reform should take us, determining
the ``how'' of getting there will pose additional challenges.
Whether or not you agree with the estimates of the U.S.
General Accounting Office and the Treasury Department that
the implementation of a new tax system would require between
18 and 24 months, it is clear that the change cannot be made
overnight. It is also clear that individuals and businesses--
the U.S. economy as a whole--cannot convert to the new system
with the ease of flicking a light switch. Transition rules
cannot be handled as an afterthought. Indeed, given the
intricacies of the American economy, how it interacts and is
integrated with the global marketplace, and the overriding
importance of the tax law in providing incentives to salutary
behavior (such as investments in plants and equipment,
retirement savings, home ownership, municipal bonds, and
charitable giving), the ``pain'' of the transition from the
current regime to a new one could well overwhelm the promised
benefits of reform.
Supporters of H.R. 3097 argue that the legislation is
necessary to force action on tax reform. Even if that were
true--and Congress's recurring inability to renew expiring
tax provisions in time to forestall gaps in the law suggests
that future Congresses may not feel so obliged--TEI questions
whether the uncertainty and potential chaos is worth the
risk. For example, a company that otherwise would invest
millions of dollars in a multi-year expansion of its
manufacturing facilities might well demur if the pending
legislation were enacted because of uncertainty over whether
or how, after December 31, 2001, it would be able to recover
its costs. (There are an estimated $3 trillion in unrecovered
costs of existing property, and of course the current
economic expansion is dependent on sustained future
investments.) Similarly, individuals who would otherwise
invest and save toward retirement might pause because of
uncertainty over how their retirement earnings would be
taxed. To repeal the Internal Revenue Code without
specifying a replacement system--to exalt the exhilaration
of ``doing it now'' over the necessity of ``doing it
right''--is to threaten major disruptions of the economy
and the lives of the American people. The proposal might
score well in public opinion polls, but that does not make
it any less imprudent.
Once again, TEI appreciates the surface appeal of calls to
terminate the Internal Revenue Code. H.R. 3097 and similar
bills, however, would create a sense of urgency for tax
reform much like plunging the detonator on a time bomb and
then scrambling to disarm it before it explodes. The action
might cause the adrenaline to flow, but we question whether
the Nation would be the better for it. Because the bill fails
to meet the standards of reasoned and responsible
legislation, Tax Executives Institute urges you to work
toward its rejection.

conclusion

Tax Executives Institute appreciates this opportunity to
present its views on the proposal to sunset the Internal
Revenue Code.

[[Page H4652]]

Any questions about the Institute's views should be directed
to either Michael J. Murphy, TEI's Executive Director, or
Timothy J. McConnally, the Institute's General Counsel and
Director of Tax Affairs. Both individuals can be reached at
(202) 638-5601.
Respectfully submitted,
Paul Cherecwich, Jr.,
International President.

Mr. FROST. Mr. Speaker, I ask that my colleagues vote no on the
previous question so that we can take up actual tax reform.
Mr. Speaker, I yield back the balance of my time.
Mr. HASTINGS of Washington. Mr. Speaker, I yield myself such time as
I may consume.
Mr. Speaker, I want to speak just a minute on the underlying bill
that this rule will make in order, and I want to couch that, my
remarks, in terms of what I experienced back home in the last year, 9
months to a year. I had several town hall meetings that dealt
specifically with the Tax Code, and I can say from those people, and by
the way, we had a huge turnout at both those meetings that we had, and
I can say without any qualification that those that attended the town
hall meetings that spoke regarding a Tax Code, nobody was defending the
current tax system, nobody was defending the current tax system. It is
also fair to say, however, that there was no unanimity as to what
should replace this tax system, but there certainly was a broad
consensus and probably near unanimity that we need to do so. The
question that faces us today then is how do we get from here to there.
Now we heard all of the adjectives about how, and I do not know if
the word draconian was used, but it is certainly implied, but let us
put things into perspective. What this bill would do would simply say 4
years from now the Tax Code will end. What will happen between now and
the end of year 2002? Well, we will go through an election, if this
bill were to pass, and obviously it will be the top of everybody's
agenda, this Congress will have passed the bill to end the Tax Code.
That means that Members in this body would have the opportunity to go
to the polls, or to go to election this year, and voters would have an
opportunity to go to the polls, ask us what we think would be the best
method or best system to replace our Tax Code. We would do that this
year, one election cycle. And probably more important, in the year
2000, because of what this bill would allow, we would have a
presidential election whose probably primary debate would be centered
on the Tax Code. Now at that time I think the American people would be
very, very well engaged, and the next Congress after that would be the
Congress that would come up with a brand-new Tax Code.
My friend from Texas (Mr. Frost) said that he wanted to talk about
elementary civics lessons. Let me offer one other addendum to that. An
elementary civics lesson as it relates to this body is this: We deal in
deadlines. This Tax Code is some 86 years old. It is badly in need of
an overhaul and, frankly, scrapping. This sets a time certain for that
to happen. It sets a deadline for this body and the President, the next
President of the United States, to come together, come up with a Tax
Code that the American people will feel comfortable with.
So I feel very strongly that this bill needs to be debated, which it
will if we pass this rule, and, furthermore, that it needs to be passed
so that the Congress can act on this legislation.
Now as to this rule, let me make a point.
At this time, Mr. Speaker, I ask unanimous consent to insert into the
Record what the previous question vote means.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Washington?
There was no objection.
The document referred to is as follows:

the previous question vote: what it means

The previous question is a motion made in order under House
Rule XVII and is the only parliamentary device in the House
used for closing debate and preventing amendment. The effect
of adopting the previous question is to bring the resolution
to an immediate, final vote. The motion is most often made at
the conclusion of debate on a rule or any motion or piece of
legislation considered in the House prior to final passage. A
Member might think about ordering the previous question in
terms of answering the question: Is the House ready to vote
on the bill or amendment before it?
In order to amend a rule (other than by using those
procedures previously mentioned), the House must vote against
ordering the previous question. If the previous question is
defeated, the House is in effect, turning control of the
Floor over to the Minority party.
If the previous question is defeated, the Speaker then
recognizes the Member who led the opposition to the previous
question (usually a Member of the Minority party) to control
an additional hour of debate during which a germane amendment
may be offered to the rule. The Member controlling the Floor
then moves the previous question on the amendment and the
rule. If the previous question is ordered, the next vote
occurs on the amendment followed by a vote on the rule as
amended.

Mr. HASTINGS of Washington. Mr. Speaker, the previous question
procedure is simply one to end debate, and, if the previous question is
defeated, then those that oppose it, which in this case would be my
friend from Texas who had an opportunity to change, and actually we
would lose control, to put it in perspective, of the floor and turn it
over to a bill that frankly, ironically, none of the three provisions
in that bill have been debated in the Committee on Ways and Means or on
the floor. I find that rather ironic. But what it would do, it would
turn over to the minority the floor, and I think that would be not
advantageous for us.
So, Mr. Speaker, then what I would like to do and to urge my
colleagues is to vote for the previous question so that we can get on
with this debate, and I would also say that I believe the debate that
is going to ensue after this rule is passed will indeed be historic.
Mr. Speaker, I yield back the balance of my time, and I move the
previous question on the resolution.
The SPEAKER pro tempore. The question is on ordering the previous
question.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. FROST. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
Pursuant to clause 5 of rule XV, the Chair will reduce to 5 minutes
the minimum time for electronic voting on adoption of this resolution,
and, without objection, the proceedings will resume on House Resolution
471 immediately thereafter.
The Chair also will reduce to 5 minutes the minimum time for
electronic voting on adoption of that resolution.
There was no objection.
The vote was taken by electronic device, and there were--yeas 229,
nays 194, not voting 10, as follows:

[Roll No. 234]

YEAS--229

[[Page H4653]]

Packard
Pappas
Parker
Paul
Paxon
Pease
Peterson (MN)
Petri
Pickering
Pitts
Pombo
Porter
Portman
Pryce (OH)
Quinn
Radanovich
Ramstad
Redmond
Regula
Riggs
Riley
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryun
Salmon
Sanford
Saxton
Scarborough
Schaefer, Dan
Schaffer, Bob
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Shimkus
Shuster
Skeen
Smith (MI)
Smith (NJ)
Smith (OR)
Smith (TX)
Smith, Linda
Snowbarger
Solomon
Souder
Spence
Stearns
Stump
Sununu
Talent
Tauzin
Taylor (NC)
Thomas
Thornberry
Thune
Tiahrt
Traficant
Upton
Walsh
Wamp
Watkins
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
White
Whitfield
Wicker
Wolf
Young (AK)
Young (FL)

NAYS--194

Abercrombie
Ackerman
Allen
Andrews
Baesler
Baldacci
Barcia
Barrett (WI)
Becerra
Bentsen
Berman
Berry
Blagojevich
Blumenauer
Bonior
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (CA)
Brown (FL)
Brown (OH)
Capps
Cardin
Carson
Clay
Clayton
Clement
Clyburn
Conyers
Costello
Coyne
Cramer
Cummings
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Dixon
Doggett
Dooley
Doyle
Edwards
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Fazio
Filner
Frank (MA)
Frost
Furse
Gejdenson
Gephardt
Gordon
Green
Gutierrez
Hall (OH)
Hamilton
Harman
Hefner
Hinchey
Hinojosa
Holden
Hooley
Hoyer
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson (WI)
Johnson, E. B.
Kanjorski
Kaptur
Kennedy (MA)
Kennedy (RI)
Kennelly
Kildee
Kilpatrick
Kind (WI)
Kleczka
Klink
Kucinich
LaFalce
Lampson
Lantos
Lee
Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Luther
Maloney (CT)
Maloney (NY)
Manton
Markey
Martinez
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McDermott
McGovern
McHale
McKinney
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller (CA)
Minge
Mink
Moakley
Mollohan
Moran (VA)
Murtha
Nadler
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Pickett
Pomeroy
Poshard
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Roemer
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schumer
Scott
Serrano
Sherman
Sisisky
Skaggs
Skelton
Slaughter
Smith, Adam
Snyder
Spratt
Stabenow
Stark
Stenholm
Stokes
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson
Thurman
Tierney
Torres
Towns
Turner
Velazquez
Vento
Visclosky
Waters
Watt (NC)
Waxman
Wexler
Weygand
Wise
Woolsey
Wynn
Yates

NOT VOTING--10

Ford
Gonzalez
Hastings (FL)
Hilleary
Hilliard
Johnson, Sam
Lewis (CA)
McNulty
Ney
Peterson (PA)

{time} 1213

Mr. JACKSON of Illinois, Mr. MILLER of California, Ms. HOOLEY of
Oregon, and Ms. KAPTUR changed their vote from ``yea'' to ``nay.''
Mr. HOBSON changed his vote from ``nay'' to ``yea.''
So the previous question was ordered.
The result of the vote was announced as above recorded.

{time} 1215

The SPEAKER pro tempore (Mr. Oxley). The question is on the
resolution.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.

Recorded Vote

Mr. HASTINGS of Washington. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. This will be a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 232,
noes 188, not voting 13, as follows:

[Roll No. 235]

AYES--232

Aderholt
Archer
Armey
Bachus
Baker
Ballenger
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bateman
Bereuter
Bilbray
Bilirakis
Bishop
Bliley
Blunt
Boehlert
Boehner
Bonilla
Bono
Brady (TX)
Bryant
Bunning
Burr
Burton
Buyer
Callahan
Calvert
Camp
Campbell
Canady
Cannon
Castle
Chabot
Chambliss
Chenoweth
Christensen
Coble
Coburn
Collins
Combest
Condit
Cook
Cooksey
Cox
Cramer
Crane
Crapo
Cubin
Cunningham
Danner
Davis (VA)
Deal
DeLay
Diaz-Balart
Dickey
Doolittle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
English
Ensign
Everett
Ewing
Fawell
Foley
Forbes
Fossella
Fowler
Fox
Franks (NJ)
Frelinghuysen
Gallegly
Ganske
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Goode
Goodlatte
Goodling
Goss
Graham
Granger
Greenwood
Gutknecht
Hall (TX)
Hansen
Hastert
Hastings (WA)
Hayworth
Hefley
Herger
Hill
Hobson
Hoekstra
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Inglis
Istook
Jenkins
Johnson (CT)
Jones
Kasich
Kelly
Kim
King (NY)
Kingston
Klug
Knollenberg
Kolbe
LaHood
Largent
Latham
LaTourette
Lazio
Leach
Lewis (KY)
Linder
Livingston
LoBiondo
Lucas
Manzullo
McCarthy (NY)
McCollum
McCrery
McHugh
McInnis
McIntosh
McIntyre
McKeon
Metcalf
Mica
Miller (FL)
Moran (KS)
Morella
Myrick
Nethercutt
Neumann
Northup
Norwood
Nussle
Oxley
Packard
Pappas
Parker
Paul
Paxon
Pease
Peterson (MN)
Petri
Pickering
Pitts
Pombo
Porter
Portman
Pryce (OH)
Quinn
Radanovich
Ramstad
Redmond
Regula
Riggs
Riley
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryun
Salmon
Sandlin
Sanford
Saxton
Scarborough
Schaefer, Dan
Schaffer, Bob
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Shimkus
Shuster
Skeen
Smith (MI)
Smith (NJ)
Smith (OR)
Smith (TX)
Smith, Linda
Snowbarger
Solomon
Souder
Spence
Stearns
Stump
Stupak
Sununu
Talent
Tauzin
Taylor (NC)
Thomas
Thornberry
Thune
Tiahrt
Traficant
Upton
Walsh
Wamp
Watkins
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
White
Whitfield
Wicker
Wolf
Young (AK)
Young (FL)

NOES--188

Ackerman
Allen
Andrews
Baesler
Baldacci
Barcia
Barrett (WI)
Becerra
Bentsen
Berman
Berry
Blagojevich
Blumenauer
Bonior
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (CA)
Brown (FL)
Brown (OH)
Capps
Cardin
Carson
Clay
Clayton
Clement
Clyburn
Conyers
Costello
Coyne
Cummings
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Dixon
Doggett
Dooley
Doyle
Edwards
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Fazio
Filner
Ford
Frank (MA)
Frost
Furse
Gejdenson
Gephardt
Gordon
Green
Gutierrez
Hall (OH)
Hamilton
Harman
Hefner
Hilliard
Hinchey
Hinojosa
Holden
Hooley
Hoyer
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson (WI)
Johnson, E. B.
Kanjorski
Kaptur
Kennedy (MA)
Kennedy (RI)
Kennelly
Kildee
Kilpatrick
Kind (WI)
Kleczka
Klink
Kucinich
LaFalce
Lampson
Lantos
Lee
Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Luther
Maloney (CT)
Maloney (NY)
Manton
Markey
Martinez
Mascara
McCarthy (MO)
McDermott
McGovern
McHale
McKinney
Meehan
Meeks (NY)
Menendez
Millender-McDonald
Miller (CA)
Minge
Mink
Moakley
Mollohan
Moran (VA)
Murtha
Nadler
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Pickett
Pomeroy
Poshard
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Roemer
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sawyer
Schumer
Scott
Serrano
Sherman
Sisisky
Skaggs
Skelton
Slaughter
Smith, Adam
Snyder
Spratt
Stabenow
Stark
Stenholm
Stokes
Strickland
Tanner
Tauscher
Taylor (MS)
Thompson
Thurman
Tierney
Torres
Towns
Turner
Velazquez
Vento
Visclosky
Watt (NC)
Waxman
Wexler
Weygand
Wise
Woolsey
Wynn
Yates

NOT VOTING--13

Abercrombie
Gonzalez
Hastings (FL)
Hilleary
Johnson, Sam
Lewis (CA)
Matsui
McDade
McNulty
Meek (FL)
Ney
Peterson (PA)
Waters

[[Page H4654]]

{time} 1224

So the resolution was agreed to.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.

____________________