Lloyd Doggett

Mr. DOGGETT

Mr. DOGGETT. Mr. Speaker, having authored the Texas Sunset Act during my service as a Texas State Senator, I believe there is merit in the sunset process. That Texas law limits the life of every State agency, and I am working with a bipartisan coalition here in Congress to apply the same concept to limit the life and require sunsetting of each of our Federal agencies. Certainly our Tax Code could have a similar concept applied to it if done in the appropriate way. This Tax Code is overflowing with loopholes, it is permissive toward abusive corporate tax shelters, it is not fair to middle class taxpayers. Under this Republican congressional leadership, it has only gotten worse. The Tax Code has gotten bigger, it has gotten more inequitable, it has been filled with more special interest provisions. We can all certainly remember the effort of the Republican House leadership to sneak through here a $50 billion tax credit for the tobacco industry hidden in a small business tax bill. But the sunset process has to be applied in a systematic way, not as a political polemic. If we look at related provisions of the Tax Code together, we do not abolish the entire code without anything to replace it. We all know how skilled our Republican colleagues are at railing against taxes. We have heard from them over and over all the taxes they do not like and all the reasons they do not like those taxes. But they seem to lose their ability to speak when it is time to talk about what tax system they would substitute. They are so very skilled about complaining about the tax system, but they lack skill in being able to offer a more fair and equitable system. After 5\1/2\ years, they have given us hearings and they have given us speeches, but they have given us no real alternative. This week, however, we learned what they have in mind if this country has the misfortune of having to endure another 2 years of a Republican Congress. The gentleman from Ohio (Mr. Kasich) told us he did not want to saddle our new economy with an old tax system, but this week we learned they have a new tax for the new economy, a 60 percent tax on every online purchase. They claim that they are still revolutionaries. If they want a real tax rebellion in this country, tell Americans that they are going to have to pay 60 percent on every online purchase and there will be an uproar. That is the wrong system. That is what this is all about: enabling the Republicans to put in place a new tax on e-commerce. It is wrong and it ought to be rejected.

Mr. DOGGETT. Mr. Speaker, I suppose, unlike some of the debates we have here in this House, that the amazing thing about this debate is that the comments that our colleagues on the Republican side have made confirm all of our concerns about this measure. Indeed, they defend the principal sponsor of one of these measures to tax e-commerce. The gentleman from Georgia (Mr. Linder) defends the taxation of e-commerce as a new Federal revenue source. One of his principal supporters testifying in the committee indicated it would be a major source of future Federal revenue. No one, until this radical proposal was presented here in Congress, has proposed that the Federal Government should rely on e-commerce to finance the operations of the entire Federal Government. There has been considerable debate over whether there should even be State or local sales tax on e-commerce. That is a debate for another day. But the idea of imposing on top of State and local taxes a major Federal sales tax on all e-commerce is likely to have a devastating impact on e-commerce. These are young companies. These are start-up companies. Sometimes the true dream of American capitalism is that one can begin in a garage and grow to be a major part of the American economy. Those are the kinds of little companies that are out there that need to be given room to grow. Americans are finding as consumers that there are many opportunities offered through e-commerce. These Republicans would come forward and scrap the code by scrapping the new economy, by imposing up to a 60 percent tax on these major participants in our new economy. Now, they claim that it is not 60 percent; that maybe it is just 20 or 30 percent. Is 20 or 30 percent not enough to alarm anyone who is concerned about whether or not we are going to encourage and develop e- commerce? But it is the Republicans' own analysis by the Joint Tax Committee, issued on April 7 by a Republican-appointed director, who says that the Internet is going to be subject to up to a 59.5 percent tax. It is the gentleman from Louisiana (Mr. Tauzin) who testified in writing to the Committee on Ways and Means yesterday that ``all goods and services for consumption would be taxed at the same rate. No exceptions.'' That means, just like the bill of the gentleman from Georgia (Mr. Linder), that there is no exception for e-commerce. So the proposal we have today before us is one that scraps the code by transferring the burden on to e-commerce. If my colleagues think that is a good idea, if they want to pay 60 percent, maybe just 20 or 30 on top of every e-commerce transaction, sign onto this Scrap the Code because that is what it is all about.

Mr. DOGGETT. Mr. Speaker, all of us who recognize the importance of the new economy and who believe we should encourage its expansion by minimizing regulation and taxes and maximizing the freedom to innovate should join together today to express our concerns. This cleverly packaged proposal that the Republicans are offering is really the very first vote in this Congress on whether to impose a new Federal tax on electronic commerce. I believe we should resoundingly reject it. Through 3 days of hearings this week before the Committee on Ways and Means, on which I serve, the same Republicans who are here today urging this proposal have been urging us to rely on taxation of electronic commerce as a major new source of Federal revenue. The Republican-appointed Director of the Joint Committee on Taxation issued a report this very week noting that these new Republican tax proposals assume ``that retail sales through the Internet would be subject to the same Federal tax as other retail sales, notwithstanding the current moratorium.'' This same report notes that in order to maintain the existing level of Federal revenues, the tax that Republicans would impose on Internet sales and on sales across America would be 59.5 percent over 10 years. That is 60 percent. Those are not my numbers, those are the Republican numbers. I know that it sounds unbelievable that a Republican Congress would try to do this, but that is exactly what they are proposing, a 60 percent tax, in addition to any State and local taxes on electronic commerce that might be imposed. To our Republican colleagues who say they are going to pull the Tax Code up by the roots and replace it with this new e-commerce tax, I want to tell them that Americans who understand the new economy are not going to sit idly by while the Federal government imposes a 60 percent tax, a 60 percent addition on the cost of every online purchase. I believe that high-tech issues should be truly bipartisan in their consideration. The problem we have too often experienced from the Republicans on behalf of working together on high technology is that they reject bipartisan approaches. They prefer the politics of division, trying to divide Democrats from high-tech, even on issues as esoteric on digital signatures. Too often, as is the case here, they bear the burden of all their right wing ideological baggage. They have tied themselves to far right social groups who are endangering our educational system with their insistence on rejecting evolution and the big bang theory of the origin of the universe, and it is those kinds of extremists who come here today insisting that Republicans must adhere to the doctrine that the progressive income tax system upon which this great Nation has relied for almost a century, that any form of this tax system is morally wrong. As an early supporter myself of the Internet Tax Freedom Act, I believe that if we overburden e-commerce, as they propose, with taxation and regulation in its infancy, it will be stifled. It will never be able to achieve its full economic potential. The Advisory Commission on Electronic Commerce, which has been meeting this past year, could not achieve agreement on the question of State and local taxation of the Net. But I do not believe that even they considered this much more radical Republican alternative of the gentleman from Georgia (Mr. Linder) and his colleagues to use the Net as a major new source for Federal taxation. Imposing too heavy a burden on the Net too soon will have devastating consequences. Do not scrap the Code by scrapping the future of the new economy. Let us reject another misguided doctrinaire Republican proposal.

Mr. DOGGETT

Mr. DOGGETT. I yield to the gentleman from Washington.

Mr. DOGGETT. Next year we will have substantial change. I believe that next year, since this particular Congress once again will not even honor the recommendations of its Joint Tax Committee to address corporate tax shelters, ignores the recommendations of the Secretary of the Treasury that this is the biggest tax compliance problem we have in America today, ignores the estimates that $10 billion a year is being lost in these cheating tax dodge schemes, I believe the next Congress is going to have enough new Members that people will say, enough is enough. We have had 6 years of do nothing, do little, avoidance of these problems. Just as these kinds of folks encourage tax avoidance, we have had a leadership that has problem avoidance. They want to avoid the problems. I know it appeals to the same special interests that get these tax shelter hustler proposals. But I believe the American people that are out there working on their taxes, certainly everybody would like to pay less, but they would like to at least be sure that other people are being dealt with fairly. Clearly these people are not dealing fairly.

Mr. DOGGETT. I think that is right. In other words, most proposals dealing with the Tax Code would bring in the experts; would do the kind of thing that I sought to do with these tax shelter hustlers, bring in the academic experts, the people out in the field, as well as just some ordinary citizens from across the country, to point out what an outrage this is. But on this proposal, this has been more of a political gamesmanship kind of thing. They have not had a hearing because I guess other than recycling this old political rhetoric, there really would not be much to hear.

Mr. DOGGETT. Mr. Speaker, I thank the gentleman for yielding me time. Mr. Speaker, I believe the American people have come to realize that every spring about this time, as sure as daylight savings time going into effect and Easter and Passover coming along and kids anticipating their graduation from school, that it is tax time on April 15, and what they can expect is the same old complicated Tax Code. But they can be reassured that Republicans will be out here talking about it. All those American citizens that are out there now working on their tax returns may not find a great deal of reassurance that after 6 years in office, all that our Republican colleagues, after 6 years of holding control in this House, all that our Republican colleagues have to offer this morning is the same old recycled speeches they have been giving and the same approach for the last 6 years. I remember in one of the earlier sessions, I think it was back around 1995 or 1996, some fellow came out here and brought the whole Tax Code. I think if he had piled that thing end to end it would have reached up there to the clock. Well, what have the Republicans done for the ordinary taxpayer that is out there struggling through their returns to simplify that code? Well, today, after 6 years of Republican leadership in this House, it probably now stretches above the clock, because they have added an additional 100 sections more or less to the Tax Code. Instead of dealing with issues like simplifying our Tax Code and making it fairer and more equitable to the ordinary middle-class taxpayer, they have recycled whatever speech and proposal they considered at their last political convention. So this is the second, third, maybe more years in Congress that we have had this same sorry proposal out here to consider. Now, if you are out there working on your return and you are happy, and you think that a Tax Code that stretches up to the clock and beyond under Republican leadership is great, that it is fair, that it is equitable, that everyone in our country, from the very largest corporations to the person who is down at the lower end of the wage scale that is figuring out a fairly simple tax return, if you think they are all being treated fairly; if you think there are no special interests that come to Washington and get special loopholes written into the Tax Code so that they can dodge taxes, so that they can come close to cheating on their taxes under the system; if you like every aspect of the system that we have now, plus the additional 100 sections that the Republicans have added to the Tax Code, today's proposal is a perfect proposal for you. Because what they are seeking to do with this old recycled, retread proposal that they drag out on the eve of tax- paying day every season, what they are seeking to do is to freeze into place the code that we have today. So if some lobbyist has come to Washington and they have written themselves in a special loophole for their special interests because they had the longest limousine and the biggest political action committee and the most effective lobbyist, well, their provision will be frozen in unless we can get not only a majority of this Congress, but two-thirds of this Congress to come forward and stand up to the special interest group, which we could not get a majority to do in the past, but we have now got to have two- thirds. So if you like the system we have now, if you like all the loopholes and the special interest provisions, you ought to be supporting this proposal. It will freeze them in forever if this retread proposal were actually designed and put into place in our Constitution. If you think we need significant change in the way our system works, well, then I would think you would be strongly opposed to this kind of approach. Now, over the course of the last 6 years we have often heard the same people who came out and piled up the Tax Code tell us that they disliked it so much that they were going to just grab down there and pull it out by the roots. That is a good applause line at the kind of convention that considers these old retread proposals like we have up here this morning. Well, they have been in office 6 years, and they had a hearing on pulling the code out by the roots back in 1995. As I speak, there is another hearing going on. There has been no proposal advanced for a vote over that 6 years in the Committee on Ways and Means to pull it out by the roots. There has been no proposal presented even this week after 6 years of the Republicans being in charge here in the House. I think they cannot figure out which root to pull out, where and what new roots to put down to replace it. So, instead, they keep coming up with the same old retread proposals, that if we ever made the mistake of actually adopting them, would only make the system worse than it is today and would assure that we could not get change in the system. Mr. Speaker, there are some specific proposals that some of us have been advancing to try to address inequities in this Tax Code. What has been most I think indicative of the kind of problem we have today is that Republican leadership would rather focus on these meaningless retreads, instead of focusing on real issues, such as the way that corporate tax shelters manage to avoid what many have estimated is $10 billion a year in taxes and closing that up and seeing that they get treated the way that middle-class taxpayers get treated. The Republican leadership has said there is no need to address corporate tax shelters. The situation is so bad that it has made the front page of Forbes magazine. This is not some strange off-beat journal. This is the magazine that calls itself ``the capitalist's tool.'' They wrote about the problem of tax shelter hustlers, describing on the magazine cover this fellow in the fedora, ``respectable accountants are peddling dicey corporate tax loopholes.'' Ten billion dollars a year is the estimate of lost tax revenues from tax shelters. And the response of the Republican leadership, when they could be out here today doing something about that, is to squelch any real reform. The chairman of the Committee on Ways and Means and the Republican majority leader are saying that tax avoidance is about as American as apple pie, and encourage the continuation of this kind of misconduct. The Secretary of the Treasury, Mr. Lawrence Summers, has suggested that this is the most serious compliance problem that we have in America today, this problem of tax hustlers. It is usually some former employee here on Capitol Hill that goes out to work for some big accounting firm, and they make a fortune selling and teaching people how to dodge, cheat, join in on tax scams. And I think it is an outrage. I think it is the kind of outrage that has grown to such a substantial extent that we now even have the lawyers that represent some of the corporations that are dodging their taxes coming before the Congress in the form of the American Bar Association tax section, the tax section of the New York State bar, and urging us to do something. They recognize what a do-nothing Congress this is and how it will not respond, and they come forward and say ``please address this problem.'' But this Republican leadership has retreads like this instead.

Mr. DOGGETT. Even though Texas has some problems, having outdistanced Los Angeles, which is one of the cities that has the dirtiest air in the country in many areas, the claim was that one candidate was not enough of an environmentalist, but instead of doing that as a direct campaign, they used a 527 organization where the gentleman could not even find out who put the ad on television.

Mr. DOGGETT. Mr. Speaker, certainly it is important to point out they will freeze into place all of these special interests provisions, all of these loopholes. The gentleman focused, I think, very eloquently on the effects of their proposal and has also noted that what we mainly have been dealing with here, as is the case around every tax filing day, is hot air from the Republicans. I would like to redirect the gentleman's attention from hot air to dirty air and another section that would be frozen into place, and that is section 527, which the gentleman joined with me last week in sponsoring legislation to address. Being from New York State, did the gentleman have occasion to see the ads that some Texans ran against Senator McCain there in New York State?

Mr. DOGGETT. Instead of doing the kind of hot air measure that we have here today, I believe the gentleman joined with me in saying that that was wrong and that taxpayers ought to have a right to be able to find out whether it is some Texas friend of one of the other presidential candidates or whether it is Chinese money or Iraqi money or Cuban money or just some homegrown special interests that wants to pour money into these kind of Swiss bank accounts of the political season this year to make unlimited expenditures, but never tell the taxpayers who is funding these kinds of hate campaigns that the gentleman must have seen in New York State.

Mr. DOGGETT. Mr. Speaker, we said, look, whether those ads are put on by a Democrat, a pro-environmental group or an anti-environmental group, let us at least tell the taxpayers who is financing them. And this Republican leadership, the same Republican leadership that could have just sent all of us and the American people a cassette with the speeches that they gave last session or the session before that or the session before that or the session before that on this same sorry proposal. They said they did not have time to consider that. They basically said that the only way they can get through this election was to continue taking unlimited amounts of secret money, including foreign money, that can be dumped into these political Swiss bank accounts called 527's and continue to stuff misinformation into our mailboxes and run hate on to the airwaves. They refused to consider the proposal that the gentleman personally has sponsored, did they not?

Mr. DOGGETT. They had a hearing at their political convention on it, so they really do not need to have substantive hearings on it, because this is a political gimmick. It is a gimmick, not really a serious proposal about how to resolve the concerns American taxpayers have.

Mr. DOGGETT. On this particular amendment?

Mr. DOGGETT. Mr. Speaker, will the gentleman yield on that point?

Mr. DOGGETT

Mr. DOGGETT. Mr. Speaker, will the gentleman yield?

Mr. DOGGETT. The gentleman is aware that with this measure we are asking the 527s to do the same thing that trial lawyers and labor unions, myself, yourself, and every candidate already does. That is all this bill does; is that correct?

Mr. DOGGETT. Mr. Speaker, since the gentleman from Arizona (Mr. Hayworth) would not yield, will the gentleman from Massachusetts yield to me?

Mr. DOGGETT. Well, I can understand that.

Mr. DOGGETT. Mr. Speaker, will the gentleman yield?

Mr. DOGGETT. So the last speaker was totally out of order in his suggestion that we were avoiding taxpayer rights, because what we are involved with is giving all American taxpayers a new right, the right to know what these phony organizations do that taxpayers are forced to subsidize--where they get their money, just as they already can learn about the gentleman, myself, or any other candidate for federal office.

Mr. DOGGETT. Mr. Speaker, the gentleman from Massachusetts is aware, is he not, that during the Committee on Ways and Means last week, before the Committee on Ways and Means convened, then again on Friday after the Committee on Ways and Means, I invited the gentleman from Arizona (Mr. Hayworth) and every Member of the Republican leadership and Members of this House to join to make this a truly bipartisan effort to clean up what one great Arizonan has said is ``a manifestation of corruption in American politics''?

Mr. DOGGETT. Mr. Speaker, I thank the gentleman for yielding me this time. Mr. Speaker, being, myself, a cosponsor of this Taxpayer Bill of Rights, I like the bill we have, but I believe we could make it much better with the amendment that I sought to offer. And so does the Joint Committee on Taxation, which happens to be chaired by a Republican Member, the chairman of the House Committee on Ways and Means. That Joint Committee, this January, called for disclosure of these 527 organizations. And what has the House Committee on Ways and Means or this House as a whole done about it until now? Absolutely nothing. Until I offered this amendment in the committee, once again, Republicans were going to sit on their hands to oppose reform. I just want the American people to know that when they turn on their television set and they begin seeing one attack ad after another, probably from both sides, spewing out hate and misrepresenting someone, that today it was the House Republican leadership that blessed that kind of conduct, because they have denied us an opportunity to at least learn, when the attack ads hit the airwaves, who the attackers are. As to the phoney claim made today that there is a need to find out more about this or that other organization, all we are trying to do is to apply the same standards to these 527 organizations that already apply to every Member of Congress, Republican and Democrat, with reference to their individual campaigns. I think that the American taxpayers who are subsidizing these organizations, American taxpayers who are filling out their own tax forms right now, should know that these 527 organizations usually get away tax free. They are subsidized by the hard-working men and women of America. And one of these groups is called ``Shape the Debate.'' My colleagues can pull up that Web page right now, and they will see an advertisement on it to promote more hate ads. It calls for the giving of unlimited amounts of contributions. It says they can be from any source. And I might note that that source, while it can be a corporate treasury written right out of the corporate treasury, it could also be China or Iraq or Cuba or any other country because it is all hidden money. Just focusing on this as one example, which any American can pull up on the World Wide Web right now, you will find an effort to solicit just that kind of money, unlimited amounts of money that can come directly from a corporate treasury. And what do they go on to promise those who give? Well, these contributions, they tell us, ``are not reported to the Federal Election Commission or any State agency, and they do not count against contribution limits.'' The whole idea is nobody will know. This Republican Party has become so wed to secret money funding. Within the last week we have heard reports of a million-dollar contribution, a million dollars of undisclosed money from one source we have heard. They can spend it on a townhouse. They can spend it on a truck. They can spend it on sky boxes. Or they can spend it on hate ads. And that is what these 527 organizations do, they spew out hate. And they want to be able to continue to operate under some pleasant- sounding name like ``Americans for Better Government,'' when, in fact, the money that they are using is from some special-interest group that wants to control the agenda of Congress. Let me give my colleagues another example of the kind of organization that Republicans are protecting. Many of us have heard from our seniors that they ought not to be having to pay twice as much as the most favored customers of pharmaceutical companies on purchases of their prescription drugs. And so now we have some group out there called ``Citizens for Better Medicare.'' It is a 527 organization just like ``Shape the Debate.'' ``Citizens for Better Medicare'' can go around and attack all of us who want to end the price discrimination against our seniors on prescription drugs and claim they are on the side of the seniors. And who is funding that organization? Well, we will never know from the IRS. We will never know from the disclosure reports like I and every other Member of Congress must file. But what we have learned, in fact, is it is the pharmaceutical companies themselves fighting to protect the discrimination they want to continue against our seniors.

Mr. DOGGETT. I am pleased to be informed, though I consider it a strange ruling, Mr. Speaker. A great American hero from Arizona has said that section 527 organizations are ``the latest manifestation of corruption in American politics.'' Yet this House Republican leadership refuses to let this House deal with this issue today because they are afraid to give taxpayers the right to force groups like this ``Shape the Debate'' group, shown on this poster, to disclose who gave them their dirty money. It could come from China or any foreign source. It could come from a homegrown special-interest group. This is wrong. Taxpayers should have the right to know about all of this. They are being denied that right to learn who is corrupting the American political system through these 527 political organizations. I do not believe it helps people of either party. I do think it cuts to the heart of our American democracy.

Mr. DOGGETT. Does a statement that John McCain as a citizen makes outside the Capitol with Common Cause at a press conference to point out the evils of these stealth PACs fall under one of these exceptions or not?

Mr. DOGGETT. So that the Chair is instructing me I may not mention the name ``John McCain'' on the floor of the House, Mr. Speaker. Is this not an exception? I could understand why some might not want it mentioned.