John Linder

Mr. LINDER

Mr. LINDER. Mr. Speaker, we have an opportunity to encourage change in China. PNTR for China will provide the Chinese people with access to western influence and ideas by forcing China to open their society to bring about positive economic and social changes. George W. Bush recently commented on Ronald Reagan's ``forward strategy for freedom.'' The Reagan adage, as espoused by the Texas governor, is that ``the case for trade is not just monetary, but moral. Economic freedom creates habits of liberty. And habits of liberty guarantee expectations of democracy. There are no guarantees, but there are good examples from Chile to Taiwan. Trade freely with China and time is on our side.'' I also agree with Prime Minister Margaret Thatcher, who predicts that democracy will move steadily up the scale from the village to the province and, ultimately, to the highest national level. We cannot achieve these goals through economic isolationism. Wang Dan, a student leader at Tiananmen Square, said ``the west should not try to isolate the Communist regime. Economic change does influence political change.'' Let us support PNTR and allow free trade to open doors to the people of China.

Mr. LINDER

Mr. LINDER. Mr. Speaker, the growth of high tech and the openness of the Internet are spreading democratic ideals throughout China, enlightening their people with ideas of freedom and opportunity. In Nanjing, young Chinese men and women are being exposed to a quiet revolution led by the growth of the Internet. A Times of London article, entitled ``China Embraces Its Last Revolution,'' underscores high tech's role in opening up Chinese society. The article says China's older generation now recognizes that the economic development on which China's future depends requires a new openness to the world, the encouragement of the Internet, entry into the World Trade Organization, and concentration on education and globalization. They know this will change the political and social balance of China. We can encourage this change. PNTR for China will maintain America's technological leadership in the world and provide high-tech jobs for Americans. It will also provide the Chinese people with access to Western influence and ideas. The open technology of the Internet will force China to open their society to bring about positive economic and social changes. Mr. Speaker, China PNTR is in the best interest of both the American and the Chinese people.

Mr. LINDER

Mr. LINDER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I want to say only this: those who choose to not put a sales tax on the Internet are picking winners and losers. The Government ought to be neutral. Our neighbors down the street ought to have the same treatment as the people that sell on the Internet in competition with them. Mr. Speaker, I yield 2 minutes to the gentleman from Wisconsin (Mr. Green).

Mr. LINDER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, at the risk of sounding remedial, I would like to point out to the previous speaker that this is not about campaign finance. Mr. Speaker, I yield 2 minutes to the gentleman from Staten Island, New York (Mr. Fossella). (Mr. FOSSELLA asked and was given permission to revise and extend his remarks.)

Mr. LINDER. Mr. Speaker, I yield 5 minutes to my friend, the gentleman from Ohio (Mr. Traficant).

Mr. LINDER. Mr. Speaker, I yield 2 minutes to the gentleman from South Carolina (Mr. Thune).

Mr. LINDER. Mr. Speaker, I am pleased to yield 1 minute to the gentleman from Oklahoma (Mr. Largent), the sponsor of the measure we are about to take up.

Mr. LINDER. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, the IRS has made criminals of us all, and it is time for it to go away. And that is what this is about, scrapping the code. This is real. Now, it may be a joke for Democrats, who have spent 40 years building up this monstrosity, but this is very real. And there are some very real proposals to replace it, proposals that have been studied for years. My proposal, which has been ridiculed today, has been studied for over 3\1/2\ years, with $15 million spent in universities from Harvard to Boston College to MIT to Stanford to Rice, and none of them came up with a 60 percent tax rate. Guess who did? A committee whose members have their entire political capital invested, or their intellectual capital invested in the Tax Code. They would lie to get this thing defeated, because we have depreciated their intellectual capital if we get rid of all the income taxes and all the difficulties and the taxes are transparent and easy to understand. They will not be needed any more. If we get rid of this Tax Code with a single transparent, straightforward, simple sales tax, Americans will know what it costs every time they buy something, what it costs for government. What they are not telling the American public is that currently, as the gentleman from Ohio pointed out, we know that 22 to 25 percent, according to various studies, of what taxpayers currently pay for at retail is the current embedded cost of this tax system. They would rather have a hidden tax than a transparent tax because they know, if taxpayers saw how much government was costing them, they would rebel and ask us to reduce the role of government in their lives. We are currently paying it. It is hidden. They like that. This income tax was originally intended and promised to only tax the top 2 percent of the income earners in America. That was the promise that was made in 1913. And indeed, if we think back to the last two tax increases, 1990 and 1993, the promise was made we are only going to raise the taxes on the top 1 percent. Well, guess what? In 1990, the top 1 percent paid $106 billion in taxes. And after the tax increase on them, the following year they paid $100 billion. Because rich people are often smart people, they can find ways to rearrange their income. But each of these tax increases, that these folks so love, reverberates through the system and we all pay. We all pay. All we want is to get rid of a monstrosity that no one understands; that confuses every taxpayer and keeps hidden what the actual cost of government is, and then let us have a debate on what to replace it with. It may not be my tax bill; perhaps it will be the bill offered by the gentleman from Texas (Mr. Armey) or the gentleman from Ohio (Mr. Traficant) or the gentleman from Louisiana (Mr. Tauzin). But it will be simpler, more understandable, and it will be fairer. One of my favorite stories about the 1913 debate on the 16th amendment to impose the income tax was that one of the Senators was ridiculed and laughed off the floor of the United States Senate for saying something absolutely outrageous. He said this: ``Mark my words, before this is over, the government will be taking 10 percent of everything you earn.'' It was considered so outrageous by his colleagues that they ridiculed him off the floor of the Senate. I feel certain that is what gave fresh meaning to my favorite country western song, ``If 10 Percent Is Enough for Jesus it Ought to be Enough for Uncle Sam.'' Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution. The previous question was ordered.

Mr. LINDER. Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from Kansas (Mr. Tiahrt). (Mr. TIAHRT asked and was given permission to revise and extend his remarks.)

Mr. LINDER. Mr. Speaker, I regret the gentleman characterized my bill without having read it. Mr. Speaker, I yield 30 seconds to the gentleman from Oklahoma (Mr. Largent) to respond to another inaccuracy of the gentleman.

Mr. LINDER. Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Texas (Mr. Frost) pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only. Mr. Speaker, this is a customary rule for Tax Code-related legislation. It provides for the consideration of H.R. 4199, the Date Certain Tax Code Replacement Act. H.Res. 473 provides that the bill be considered as read and that the text of H.R. 4230 shall be considered as adopted. The rule further provides for 1 hour of general debate equally divided and controlled by the chairman and ranking minority member of the Committee on Ways and Means. Finally, the rule provides for one motion to recommit, with or without instructions, as is the right of minority Members of the House. Mr. Speaker, what we have learned after 87 years of the current system is this: if we had sat down at the beginning of 1913 and asked ourselves how could we build a tax system that would punish people for earning and working hard, a system that would be obstructive of capital formation, we could not have done a better job. Our tax system is the largest impediment to people moving from the first rung of the economic ladder to the second, because the harder you work, the more you save, the more you invest, the more we take. It is a system that is inefficient. We have seen testimony from the Kemp Commission to Harvard studies that says for a small business man or woman to comply with the code and to collect and remit $1 in business income taxes, it costs them anywhere from $4 to $7. The current code is not understandable. Our own IRS tells us that if you call the IRS for help in filling out your own tax return, 25 percent of the answers they give you will be given in error. Over 50 percent of Americans have to pay others to decipher the Tax Code and do their taxes for them. In an effort to show how complex the IRS code has become, Money magazine created a fictional American family and asked tax professionals to prepare an IRS tax return. Incredibly, every one of the tax professionals came up with a different tax total, and not one of the tax professionals calculated what the editors of Money magazine believed to be the correct income tax. The current code invades the privacy of every single American citizen. There are 100,000 people at the IRS who know more about us than we are willing to tell our children. I want them out of our lives. These are not bad people. They are people doing the job that this Congress by statute has directed them to do, but we should not have any agency of government that knows how much money you make or how you spend it. That should be none of our business. We should not have anybody who can look into your records and know your history. The government should not be looking over your shoulder counting every dime you earn. Unfortunately, to the IRS we are all presumptive tax criminals, required to open up aspects of our lives to auditors at any given moment. For all of these reasons, we are here today to debate and pass H.R. 4199. What the legislation before us today does is to sunset the current Tax Code effective December 31, 2004, and require that Congress approve a replacement system no later than July 4, 2004, to ensure a smooth transition to the new system on the first day of 2005. This legislation also establishes a bipartisan National Commission on Tax Reform and Simplification that is required to report to Congress on a new, fair, simpler Tax Code. The overall intention of this bill is to do three things: One, sunset the current convoluted Tax Code; two, create a commission to consider alternative tax systems; and, three, foster a national debate on how to create a fair tax system for working Americans. This is not a jump over the cliff, as some will say. There are several proposals before the Congress now that have been carefully thought out. The gentleman from Texas (Mr. Armey) has one that he has written a book about, the gentleman from Louisiana (Mr. Tauzin) has one that he has pushed for several years, the gentleman from Pennsylvania (Mr. English) has a very thoughtful proposal, and I have one too. All of these are ready to be placed in place. They are different, but every single one is better than the current system. Mr. Speaker, my bill, H.R. 2525, that I introduced with my friend the gentleman from Minnesota (Mr. Peterson) is a comprehensive tax reform bill. The national retail sales tax would put in place a transparent form of taxation that will end the confusion forever. This bill is known as the Fair Tax. It would repeal the Federal income tax, the capital gains tax, corporate and self-employment taxes, all payroll taxes, including Social Security and Medicare taxes, all estate and all gift taxes. Under the Fair Tax, Americans will be able to see exactly what they are paying in taxes, and the embedded costs of the IRS would be gone, because the IRS would be gone. Americans would be able to take their entire check home with them and the IRS would be shut down. Unlike the relatively simple tax return that you would get if we move toward a flat tax, under our system we would have no tax return at all, and you would never have to keep a receipt or a record, not one. Let me simply say that any of these proposals, as I said earlier, any of these tax reform changes would be better than the current system. I welcome the debate that will spread across America as we determine how to install a better system. All of us who introduced the legislation, the gentleman from Texas (Mr. Armey), the gentleman from Louisiana (Mr. Tauzin), the gentleman from Pennsylvania (Mr. English), and I simply want to give Americans a fresh break from a tired and unfair old system. Also I wanted to commend the gentleman from Oklahoma (Mr. Largent) for his work in crafting this legislation today. The product he has crafted will effectively prompt the national debate on this important issue, and it should be supported in the House today. Mr. Speaker, this rule was unanimously reported by the Committee on Rules. I urge my colleagues to support the rule so we may proceed with debate and consideration of the underlying legislation. Mr. Speaker, I reserve the balance of my time.

Mr. LINDER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, let me just say, it is hard to take seriously the words of a gentleman who introduced a flat tax with five different levels several years ago. Mr. Speaker, I yield 3 minutes to the gentlewoman from Wyoming (Mrs. Cubin).

Mr. LINDER. Mr. Speaker, I yield 30 seconds to the gentleman from Ohio (Mr. Portman), from the Committee on Ways and Means, to respond.

Mr. LINDER. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 473 and ask for its immediate consideration.

Mr. LINDER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, in a world in which all economists admit that the consumption base is larger than the income base and the average income tax to bring our revenues in is 28 percent, to suggest we have to have a 60 percent larger base is just silliness. Mr. Speaker, I am happy to yield 2 minutes to the gentleman from Colorado (Mr. Hefley).

Mr. LINDER

Mr. LINDER. Mr. Speaker, I demand a recorded vote.

Mr. LINDER

Mr. LINDER. Mr. Speaker, I thank the gentleman from Pennsylvania (Mr. English) for yielding, and I thank the gentleman from Erie for his plan and the gentleman from Cincinnati (Mr. Portman) for arranging a special order. Let me say, Mr. Speaker, before I get into my plan, that any one of these proposals is better than the current system. What we have learned after 86 years of the current system, if we had sat down at the beginning in 1913 and said how can we build a tax system that will punish people for working hard and earning, that will be obstructive of capital formation, we could not have done a better job than we have done here. Our tax system is the single biggest impediment to people reaching from the first rung of the economic ladder to the second, because the harder you work, the more you save, the more you invest, the more we take. It is a system that is inefficient. We have seen testimony from the Kemp Commission to Harvard studies that say for a small businessman or woman to comply with the code, collect and remit $1 in business income taxes, it costs them anywhere from $4 to $7 to do that. It is un-understandable. Our own IRS tells us that if you call the IRS for help filling out your own tax return for an answer to a question, 25 percent of the answers they give you are in error. Money Magazine sent the same data to 49 different tax preparers for a hypothetical family and found 49 different tax returns varying by thousands of dollars. We should get away from the notion of taxing what people put into society, their productivity, their job creation, their work, and tax what they take out of it, their consumption. When you think about it, there is no way for a business in America to pay a tax. There is not a mechanism for it. If you have a business, and I have had several, there is not a secret drawer where the money piles up, where you find your share of the payroll tax. There is not another secret drawer where the money piles up, where you pay your income tax from. It all comes out of price, as well as your electric bill and labor cost, but it is all in price. If you have a loaf of bread, a farmer has touched it, a trucking company, a processing company, a bakery, a distribution company, a retail outlet, not to mention the cardboard manufacturers and the plastics people. All of them have tax costs, payroll tax costs, income tax costs, accountants and attorneys to avoid the tax codes. All of that gets put into the price of that loaf of bread. And we think, from the study we have done at Harvard, that it is 22 percent. On average what you pay at retail is 22 percent inflated by the embedded cost to the IRS. How do you fix that? You get rid of the IRS. Get rid of the income tax on both corporate and individuals, get rid of the payroll tax which is the largest tax that three-fourths of America pays. Three-fourths of us pay more for Social Security and Medicare than we do in income taxes. Get rid of the death tax, the capital gains tax, the tax on dividends, the gift tax; and replace it with a one-time retail sales tax. If you spend $100, the first $23 goes to Uncle Sam, the rest goes to the merchant. Currently, $22 is going to the embedded costs to the IRS. Our numbers show that as of 1995 that we are bringing the same amount of money as the current system. Now, what will this do in the world? You will have a percent higher cost of living, but you get to keep your whole check. If you are an average income earner in America at 28 percent withholding level, 28 percent income tax withholding and 7.65 percent is your share of the payroll tax costs, your employer pays an equal amount for you, you will have a 56 percent increase in take-home pay the next day. You can afford the penny. What happens in the world? If we are the only Nation in the world selling into the global economy with no tax component in our prices are we going to be more competitive? If a corporation finds more value in equity than debt, today there is more value in debt, because if you borrow money, you get to deduct the entire interest costs. If you have equity, shareholders, you pay tax on the profits; and when you give it to them as dividends, they pay tax one more time. And if they sell stuff, they pay tax on the capital gain. Under our system, with no taxes on business, no taxes on investment, there would be fewer people in the borrowing markets and the interest rates will go down 25 percent across the board for school loans, homes, cars. If you are at an international corporation like Coca-Cola from my hometown with sales across the globe and dollars stranded overseas because it is cheaper to borrow here at 8 percent than to repatriate those dollars at 35 percent. All of those dollars come home. The plant gets built in this country, foreign companies find it attractive to build a plant in this country, because there is no tax consequences. Every investor in the world will be in on our stock markets because there is no tax consequence. The markets go up. Who is opposed to this? Not CPAs. You think CPAs like this system? They are at risk every time they sign a tax return. We have not even promulgated the rule for some of the tax changes that we have. CPAs can make far more money planning the future for their clients, the growth of the business, the financing of that growth, than they can recording the past. This town does not like the bill. It will be the largest transfer of power from Washington to individuals in the history of our government. We know too much about you. We would give that away. There are 100,000 people at the IRS that know more about me than I am willing to tell my children, and I want them out of my life and yours. These are not bad people. These are people doing the job that this Congress by statute has directed them to do, but we should not have any agency of government that knows how you make money or how much you make or how you spend it. That should be none of our business. Unlike the simple tax return that you heard from my friend from Erie talk about, my tax return is nonexistent. You never, ever keep a receipt or a record or file a tax return. Now, people will say this is hurtful on the poor, because they spend all of their money for living, to which my response is this: they are already paying a 22 percent cost to the IRS in everything they buy. We are going to get rid of that. But beyond that, we do not believe anybody should pay tax on necessities. Every year the Department of Health and Human Services says that a household of one needs to spend, last year it was $8,500, with my tax included, to pay for their necessities. My mother in an apartment in Minnesota can pay for her health care, housing, food, clothing for $8,500 dollars, that is called poverty living; but that is what HHS says you can get by in your necessities. My daughter and my son-in-law and three grandsons in Memphis need to spend $25,000 for their necessities. Our rebate will totally return to them on a monthly basis the total tax consequences of spending up to the poverty line. So no family, rich or poor, has to pay taxes on their necessities. Beyond that, we are all discretionary spenders. We should all pay the same. Just imagine a world in which you are a voluntary taxpayer. We do not have to pass bills like we have done and the gentleman from Erie, we worked on a bill to make the IRS more friendly because it was a huge adversarial relationship with our taxpayers. We do not need that because you are going to be a voluntary taxpayer. You are going to pay taxes exactly when you choose to pay them and exactly as much as you choose to pay them. If you want to buy a used house instead of a new one or a used car instead of a new one, no taxes. Only new things for personal consumption, personal use. Because we believe that a house already has a 30 percent embedded cost of the IRS in it and you should only pay taxes on anything one time. I want you to have the privilege in a free society of being anonymous again. We should not know as much about you as we do. We should not have anybody who can look into your records and know your history. I think the privilege of anonymity is the single greatest gift a free society can give its citizens. Let me further say this: We have built a tax system that every time the government wants more of your money, we promise you it is only going to increase the taxes on the top 1 percent. Remember 1990? Do you remember 1993? It is only going to increase the taxes on the top 1 percent. So 99 percent say, Go get them. Fine with me. It's not going to hurt me. Guess what? We all pay. In 1990, when President Bush agreed to a tax increase on the top 1 percent, the top 1 percent paid $106 billion in taxes. In 1991 after the tax was increased, they paid $100 billion in taxes. Guess what? Rich people are often smart people and they find ways to change the way they get their income. They can control it and reduce their obligation. I do not blame them. I want the next tax increase to be so important that we all pay, including my mother on that loaf of bread. We all ought to be involved in this. Russell Long when he was chairman of the Senate Finance Committee had a wonderful saying. He said, ``Don't tax him and don't tax me but tax that man behind the tree.'' And we are all willing to do that. But what we find out is it comes back through the system and we all pay at the checkout line at retail. So let us be honest about it. Let us have a transparent, frank, obvious tax at retail that we all know how much our government is costing us and we all pay equally. This bill totally untaxes the poor. It untaxes necessities, and it treats everybody else exactly the same. It gives us a world in which investment is attractive, consumption is not. It gives us a world where we are all treated equally. I want to remind you what was said in 1913 when they passed the 16th amendment to allow the income tax. A Senator was ridiculed so bad that he was laughed off the floor of the Senate for saying something that was absolutely outrageous to the rest of the Senators. He said this: ``Mark my words, before this is over, the government is going to be taking 10 percent of everything we earn.'' Oh, how I wish it were so. That gave fresh meaning to my favorite country and western song: ``If 10 Percent's Enough for Jesus, It Ought to Be Enough for Uncle Sam.''

Mr. LINDER

Mr. LINDER. Mr. Speaker, for purposes of debate only, I yield the customary 30 minutes to the gentlewoman from New York (Ms. Slaughter), pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only. Mr. Speaker, House Resolution 457 is a closed rule providing for consideration of H.R. 3660, the Partial Birth Abortion Ban Act of 2000. H. Res. 457 provides 2 hours of general debate, equally divided and controlled by the chairman and ranking minority member of the Committee on the Judiciary. House Resolution 457 provides that, after passage of H.R. 3660, it shall be in order to take from the Speaker's table S. 1692, consider it in the House, and to move to strike all after the enacting clause and insert the text of H.R. 3660 as passed by the House. The rule also waives all points of order against the motion to strike and insert. It provides that if the motion is adopted and the Senate bill as amended is passed, then it shall be in order that the House insist on its amendment and request a conference on the bill. Finally, the rule provides for one motion to recommit with or without instructions, as is the right of the minority. Mr. Speaker, I will not take time here to discuss the grizzly nature of this procedure at issue. Many of the other speakers today will address that. I would like to briefly note, however, that this rule allows the House to take this latest step in the ongoing saga of the effort to ban the dreadful partial-birth abortion procedure. Legislation has passed this House by a veto-proof majority in the past two Congresses. The vote today will be the seventh time the issue has come before the House in the past 5 years. In fact, the bill we debate today has been adjusted from previous texts to account for the growing body of law dealing with partial-birth abortion. While the President has prevented Congress from taking the action that the overwhelming majority of Americans support, the States have taken the lead on this issue. I urge my colleagues to stand today with the American people to preserve unborn life by supporting this rule and the underlying legislation. Mr. Speaker, I reserve the balance of my time.

Mr. LINDER. Mr. Speaker, I am pleased to yield 3 minutes to the gentleman from Montana (Mr. Hill). (Mr. HILL of Montana asked and was given permission to revise and extend his remarks.)

Mr. LINDER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I would like to point out to the gentlewoman from Texas (Ms. Jackson-Lee) that what she so derisively calls the Contract on America has been passed, 70 percent of which has been signed by President Clinton. Mr. Speaker, I am happy to yield 3 minutes to the gentleman from Kentucky (Mr. Fletcher.)

Mr. LINDER. Mr. Speaker, I am pleased to yield 5 minutes to the gentleman from Oklahoma (Mr. Coburn).

Mr. LINDER. Mr. Speaker, I yield 2 minutes to the gentleman from Oklahoma (Mr. Coburn).

Mr. LINDER. Mr. Speaker, I would inquire as to how much time remains on both sides.

Mr. LINDER. Mr. Speaker, I reserve the balance of my time.

Mr. LINDER. Mr. Speaker, I yield 4 minutes to the gentleman from Oklahoma (Mr. Coburn). Parliamentary Inquiry