October 17, 2017 - Issue: Vol. 163, No. 167 — Daily Edition115th Congress (2017 - 2018) - 1st Session
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS; Congressional Record Vol. 163, No. 167
(Senate - October 17, 2017)
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[Pages S6464-S6465] From the Congressional Record Online through the Government Publishing Office [www.gpo.gov] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Mr. FLAKE: S. 1974. A bill to require transparency in the tax code by requiring federally funded tax credits to be disclosed in the USASpending.gov website; to the Committee on Finance. Mr. FLAKE. Mr. President, I rise to speak on the much needed topic of tax reform. The high rates and complicated nature of the current Tax Code are burdening individual taxpayers and making businesses less competitive in the global market. That simply has to change. It has been more than 30 years since we have passed major tax reform, and we are well past time. Unfortunately, I recently learned of a serious threat to reforming the Tax Code called alpacas. Now, what do these cute, mild-mannered pets have to do with Federal tax policy? Earlier this year, I issued an oversight report entitled ``Tax Rackets: Outlandish Loopholes to Lower Tax Liabilities.'' That report demonstrated how clever accounting allows nearly anything imaginable to become a writeoff, including alpacas. To illustrate the point, the report outlined how local and Federal tax bills can be sheared by claiming exotic pets--these exotic pets--as livestock and turning backyards into barnyards. That is when the fur really started to fly. Alpaca owners associations that once brazenly touted this tax fleece as a key selling point for the animals now feigned outrage at the suggestion. The association tried to pull the wool over the eyes of taxpayers by retaining a professional PR consultant. They launched a media campaign, inundating my office and others with phone calls, social media messages, and letters with photos of alpacas. Through slick reporting and aggressive lobbying, tax-subsidized alpaca ownership was somehow presented as a bulwark of small business and a flourishing middle class. If this mere mention of a tax break costing $10 million annually and enjoyed by relatively few taxpayers elicited such an outmeasured and aggressive response, imagine the backlash we will face when we are attempting to actually eliminate tax preferences benefiting powerful corporations and special interests to the tune of billions of dollars. There are over 200 loopholes buried throughout the Tax Code that collectively cost $123 trillion annually. Again, there are over 200 loopholes buried throughout the Tax Code that collectively cost $1.23 trillion annually. This exceeds the total amount spent annually by the Federal Government for all discretionary programs, which includes defense, education, transportation, foreign aid, and protecting the environment. These exemptions increase the bill for the average taxpayer. They also make the Tax Code so complicated that most individuals have to hire a tax professional or buy software to help complete their tax returns. At more than 74,000 pages in length, no one--not even those in Washington who write the laws or enforce them--truly understands Federal tax law. Special interests are taking advantage of this confusion by hiring armies of accountants and Washington lobbyists to dodge taxes and cash in on the complexity of the code. For example, developers are claiming--these are a lot of homebuilders are claiming $8 billion in tax credits every year supposedly to construct low-income housing, but with fewer homes being built and no basic accountability requirements, it is nearly impossible to track how this money is being spent. The Government Accountability Office, the GAO, which is investigating, said the ``IRS and no one else in the federal government really has an idea of what is going on.'' The same is true with hundreds of other tax loopholes. A luxury yacht can qualify as a second home and can be eligible for a mortgage interest deduction. Alaskan ship captains can expense costs for whaling as charitable contributions, even though no money goes to charity and whaling is typically illegal otherwise. High rollers can itemize the cost of gambling trips, including entertainment. Even the cost of losing lottery tickets can be deducted, a kind of scratch-off writeoff. Only the IRS knows who is taking advantage of these loopholes, and the agency often cannot verify whether those claiming the tax giveaways are eligible. In order to achieve meaningful tax reform that makes the code simpler and fairer, we have to be able to first evaluate who is benefiting from these loopholes, for what purpose, and for what price. That is why I am introducing the Tax Expenditures Accountability Act, which will publicly disclose the names of the corporate and special interests receiving tax credits and the costs of these tax credits. This bill requires the Department of Treasury to disclose the special interest receiving tax credits just as all other Federal expenditures are currently disclosed on the public website USAspending.gov. Sunlight is obviously the best disinfectant, and I look forward to exposing many of these loopholes, eliminating them, and returning the savings to individual taxpayers in the form of lower taxes. As the alpaca lobby demonstrated, riding herd on tax breaks will cause every special interest benefiting from the code's complexity and unfairness to cry foul. Washington's powerful special interests will mobilize and threaten to derail tax reform. Many would rather protect these loopholes than allow taxpayers to keep more of their own paycheck. [[Page S6465]] Coming up short on reform is not an option. We have to do it this year. Individuals and businesses are suffering under a broken, antiquated tax code that is in dire need of fixing. We can't be deterred in efforts to achieve real reform that reduces the tax bill for everyone. ______ By Mr. KAINE (for himself and Mr. Warner): S. 1975. A bill to designate additions to the Rich Hole Wilderness and the Rough Mountain Wilderness of the George Washington National Forest, and for other purposes; to the Committee on Agriculture, Nutrition, and Forestry. Mr. KAINE. Mr. President, this bill authorizes additions to two existing wilderness areas within the George Washington National Forest in Virginia; the Rich Hole and Rough Mountain Wilderness Areas. It's a relatively simple bill, and it provides only a small window into the volume of work done by Virginians to manage a vast swath of Federal land in this region collaboratively and responsibly. America's Federal lands are some of our most precious assets. We may hike or bike them; derive energy, minerals, or goods from them; or sometimes just leave them to nature. There is a long history of conflict among stakeholders who disagree on which Federal lands are best suited to which purposes. Many years ago, forest users with different views and interests formed the George Washington National Forest Stakeholder Collaborative. Through hard work and consensus, the Collaborative agreed upon a number of recommendations for forest management and protection. Everyone got some of what they wanted and gave some ground. Preservation advocates consented to timber harvest and other active forest restoration and management in certain areas. The forest products industry consented to wilderness and lightly-managed areas elsewhere. The U.S. Forest Service's 2014 revised GW Forest Management Plan reflected many of these agreements. Subsequently, the Forest Service convened the Lower Cowpasture Restoration and Management Project, bringing more stakeholders to the table, earlier in the process, to negotiate out how to manage this particular part of the Forest, located in the lower portion of the Cowpasture River watershed, in ways that work for everyone. Within this process, further compromises were made to achieve a mutually satisfactory project that could gather broad support. All members of the Stakeholder Collaborative now support the wilderness additions identified in this bill. I am proud to partner on this with my colleague Senator Mark Warner, and we are following in the path blazed by Senator John Warner and Representative Rick Boucher, who were instrumental in passing the original Virginia Wilderness Act in 1984. Taking care of our Nation's outdoor resources is good for our economy and good for our environment. Land disputes may sometimes be difficult, but the example of the GW Forest Stakeholder Collaborative proves they don't have to be. When everyone comes to the table and invests the necessary time, we can find common ground. I hope this will be a lesson for us in other tough policy challenges, and I encourage the Senate to support this bill. ____________________