William Roth

Mr. ROTH

Mr. ROTH. I thank the distinguished Senator from Montana for his courtesy.

Mr. ROTH. Mr. President, I rise to discuss the centerpiece of our efforts to reduce the tax overpayment by America's families. The Marriage Tax Penalty Relief Act of 2000 delivers savings to virtually every married couple in America. And it does so within the context of fiscal discipline and preserving the Social Security surplus. The importance of this measure cannot be overstated. According to the most recent CBO estimates, in 1999, 43 percent of married couples-- about 22 million couples--faced the marriage tax penalty. The average penalty was $1,480 per couple. This was levied on individuals who are already overburdened with expenses--the costs associated with buying homes, paying for education, raising children, and building financial security for retirement. It isn't fair, Mr. President. It isn't fair that when two individuals marry their combined tax liability becomes greater than if they had remained single and continued to pay taxes at their single rate. But unfortunately, this has been the case--to one degree or another--for more than 30 years. Now it's time for a change. It's time to restore equity--to bring balance and fairness into the tax equation for these married couples. This, of course, is not as simple as it might appear. Our tax system has tried to balance three disparate goals--progressivity, equal treatment of married couples, and marriage neutrality. And it is impossible to achieve all three principles at the same time. The principle of progressivity holds that taxpayers with higher incomes should pay a higher percentage of their income in taxes. The principle of equal treatment of married couples holds that households with the same amount of income should pay the same level of tax. And the principle of marriage neutrality holds that a couple's income tax bill should not depend on their marital status. The tax code should neither provide an incentive nor a disincentive for two people to get married. Our policy response differs depending on how we balance these different principles. For instance, if we want to ensure that when two singles get married their total tax bill will not rise--but we do not mind if two married couples with the same overall income level are treated differently, then we arrive at one result. However, if we want to make sure that two singles who marry do not face increased taxes-- and we want to make sure that two married couples with the same income level are treated evenly--then we arrive at a different result. Last year, the Senate position in the Taxpayer Relief Act of 1999 embraced the first policy result. We focused on the difference between what two spouses would pay in taxes if they were single versus what they would pay in taxes if they were married. In order to fully address that problem, we developed a system whereby a married couple would have an option. The couple could continue to file a joint return using the existing schedule of married filing jointly. Or the couple could choose to file a joint return using the separate schedules for single taxpayers. It was straightforward, and it was universal--we did not try to impose arbitrary income limits to cut off the relief. As I said last year, this approach had a lot of good things about it. Most importantly, I liked the way that it basically eliminated the marriage penalty for all taxpayers who suffered from it. It delivered relief to those in the lowest brackets as well as to those in the highest brackets. It also delivered relief to those who itemized their deductions as well as those who took the standard deduction. Nevertheless, I did not propose, or support, the separate filing plan this year. As the Chairman of the Finance Committee, I am responsible for developing tax policy in a rational manner. I am also responsible for working with members of my Committee and of the full Senate. After listening to my colleagues' views on marriage tax relief, I came to the conclusion that the best approach at this time is to build on the foundation that Congress has already approved. Last year, in the conference report of the Taxpayer Relief Act of 1999, the Congress adopted three components of marriage penalty relief. These include an expansion of the standard deduction for married couples filing jointly; a widening of the tax brackets; and an increase in the income phase- outs for the earned income credit. A different part of the bill also addressed the minimum tax issue. This year, the House passed a marriage penalty tax bill that included the first three components. And the Finance Committee bill, the Marriage Tax Penalty Relief Act of 2000, has built on this foundation. Under current law, for the year 2000, the standard deduction for a single taxpayer is $4,400. The standard deduction for a married couple filing a joint return is $7,350. That means that for couples who use a standard deduction--and those are generally low and middle income couples--they are losing $1,450 in extra deductions each year. At a 28% tax rate, that lost deduction translates into an extra tax liability of $406 each and every year. The Finance Committee bill increases the standard deduction for married couples so that it is twice the size of the standard deduction for singles. And we do that immediately, for the 2001 tax year. When fully effective, this provision provides tax relief to approximately 25 million couples filing joint returns, including more than 6 million returns filed by senior citizens. Increasing the standard deduction also has the added benefit of simplifying the tax code. Approximately 3 million couples who currently itemize their deductions will realize the simplification benefits of using the standard deduction. Second, the Marriage Tax Penalty Relief Act of 2000 addresses the cause of the greatest dollar amount of the marriage tax penalty--the structure of the rate brackets. Under current law, the 15% rate bracket for single filers ends at taxable income of $26,250. The 15% rate bracket for married couples filing jointly ends with taxable income of $43,850, which you can see is less than the sum of two times the single rate bracket. In practical terms, that means that when two individuals who each earn $30,000 get married and file a joint tax return, $8,650 of their income is taxed at the 28% rate rather than at the 15% rate that the income would have been subject to if they had remained single. The extra tax liability for that couple each year comes out to $1,125. The Finance Committee bill remedies that fundamental unfairness. The bill adjusts the end point of the 15% rate bracket for married couples so that it is twice the sum of the end point of the bracket for single filers. Recognizing that the rate structure hurts married couples in the higher brackets, the bill also adjusts the end points of the 28% rate bracket as well. When fully effective, and we make that happen a year earlier than the House, this provision will provide tax relief to approximately 21 million couples filing joint returns, including more than 4 million returns filed by senior citizens. Third, the Marriage Tax Penalty Relief Act of 2000 addresses the biggest source of the marriage tax penalty for low income, working families--the earned income credit. This complicated credit is determined by using a schedule for the number of qualifying children, and then multiplying the credit rate by the taxpayer's earned income up to a certain amount. The credit is phased out above certain income levels. What that means is that two people who are each receiving the earned income credit as singles may lose all or some of their credit when they get married. In order to address that problem, the Finance Committee bill increases the beginning and ending points of the income levels of the phase-out of the credit for married couples filing a joint return. For a couple with two or more qualifying children, this could mean as much as $526 in extra credit. This provision would also expand the number of married couples who would be eligible for the credit. It will help over one million families.

Mr. ROTH. Parliamentary inquiry: I didn't think there was any time limit.

Mr. ROTH. I would say 10 minutes.

Mr. ROTH

Mr. ROTH. Mr. President, firefighters and EMS personnel are truly our nation's first responders. When the tragic images of natural or manmade disasters flash across our TV screens, there is one image that stands alone. The American firefighter is always there to rescue the family from a burning building, always there in the wake of a natural disaster, and is always there should a terrorist strike in our nation's heartland. These scenes are played out around our country on a daily basis. And while we see these images on TV as just a part of our society today, what is not realized is the cost our first responders bear. The 1.2 million men and women that serve in our nation's 32,000 fire departments do so with little fanfare, and often with little or no pay. Our nation's first responders ask very little of us, but, thankfully, they are always there when we need them. That is why I have introduced the 21st Century Fire and Emergency Services Act which is a companion to the House-passed legislation. This legislation is an important step forward for the fire and EMS community. Every year I hear from fire departments in Delaware who are looking to acquire state-of-the-art equipment to enhance their performance on a fire scene, or attempting to secure funding to train personnel in arson detection. I also hear from fire personnel seeking funds to create all- important fire prevention programs at local elementary schools. These are just a few examples. The point is that for all too many departments, after the general operating expenses are calculated, there is no funding for this equipment or special program. Funds raised through chicken dinners, bingo and bake sales can only go so far. Back home, the Delaware Volunteer Firemen's Association is sending out the call for help. My legislation establishes two grant programs at the Federal Emergency Management Agency. The first is an $80 million competitive grant program for volunteer and paid fire and emergency services departments. With these 50/50 matching grants, I believe this legislation will give departments throughout our country an opportunity to have the thermal imaging camera or the health and wellness program needed to help them do their jobs even better. Second, this bill establishes a $10 million burn research grant program through FEMA. Under this program, safety organizations, hospitals, and governmental and nongovernmental entities that are responsible for burn research, prevention, or treatment are eligible for competitive grants to continue their important work. Finally, this bill recognizes the contributions of volunteer firefighters by providing $10 million to fully fund the USDA's Volunteer Fire Assistance Program. This program allows the nearly 28,000 rural fire departments nationwide to apply for cost-share grants for training, equipping and organizing their personnel. These rural fire departments represent the first line of defense for rural areas coping with fires and other emergencies. Personally, I am excited about the technology that is available to first responders today, and I am committed to working to ensure that every department in Delaware and throughout the country has the tools it needs to make us all safer in our homes and communities. Let's not wait for the next disaster to hear the call. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. ROTH

Mr. ROTH. Mr. President, my amendment would simply protect the Arctic National Wildlife Refuge from oil drilling. Following in the footsteps of conservationist President Theodore Roosevelt, President Dwight Eisenhower set aside this Arctic wilderness area for all time and all generations. While my amendment protects a wilderness, it also protects a legacy. It is a legacy forged of foresight and conservation that has been handed down from generation to generation. I hope we will pass this legacy on today to future generations--just as we have received it from past ones. My amendment will insure that we do. This is not a partisan debate. The President I have named were both Republicans. I am joined in support of my amendment by many Democrats. Together, both parties have a stake in this wilderness area. I hope today that both parties will join hands in protecting it. I urge my colleagues to support my amendment. I yield the remainder of my time to the Senator from California.

Mr. ROTH

Mr. ROTH. Mr. President, I yield 5 minutes to the distinguished Senator from Illinois.

Mr. ROTH. Mr. President, I yield 10 minutes to the Senator from California.

Mr. ROTH. Mr. President, I yield 5 minutes to the distinguished Senator from Montana.

Mr. ROTH. Mr. President, I yield 3 minutes to the Senator from Rhode Island.

Mr. ROTH. Mr. President, I commend my colleague, the Senator from New Mexico, for what I consider to be an excellent budget resolution. Over the next 5 years, the Budget Committee chairman has protected Social Security, funded our priorities such as defense and education, and provided for a $150 billion tax cut--something I look forward to crafting in the Finance Committee. However, there is one point at which I respectfully disagree with my distinguished colleague's work. It is in the assumptions of allowing leasing for oil exploration and production in the Arctic National Wildlife Refuge. This budget resolution assumes that $1.2 billion would become available in fiscal year 2005 from the bids for such leases. My amendment would simply remove that assumed revenue from the budget resolution and thereby protect this wilderness area. My reason for offering this amendment is based on beauty, not on budgets. I do not want to see us make an irreparable mistake in one of America's remaining natural treasures. We can afford to forgo this momentary revenue, but we can't afford not to protect this Arctic Eden. Mr. President, in 1960 President Dwight Eisenhower had the wisdom to set aside a portion of America's Arctic for the benefit and enjoyment of future generations. His Arctic Range protected the highest peaks and glaciers of the Brooks Range, North America's two largest and most northerly alpine lakes, and nearly 200 different wildlife species, including polar bears, grizzlies, wolves, caribou and millions of migratory birds. Eisenhower's Secretary of the Interior, Fred Seaton, called the new Arctic Range, ``one of the most magnificent wildlife and wilderness areas in North America . . . a wilderness experience not duplicated elsewhere.'' The Alaskan wilderness area is not only a critical part of our Earth's ecosystem--the last remaining region where the complete spectrum of arctic and subarctic ecosystems comes together--but it is a vital part of our national consciousness. The Alaskan wilderness is a place of outstanding wildlife, wilderness and recreation, a land dotted by beautiful forests, dramatic peaks and glaciers, gentle foothills and undulating tundra. It is untamed--rich with caribou, polar bear, grizzly, wolves, musk oxen, Dall sheep, moose, and hundreds of thousands of birds--snow geese, tundra swans, black brant, and more. Birds from the Arctic Refuge fly to or through every state in the continental U.S. In all, Mr. President, about 200 species use the coastal plain. Mr. President, there are parts of this Earth where it is good that man can come only as a visitor. The Arctic National Wildlife Refuge is one of those places. These are pristine lands that belong to all of us. And perhaps most importantly, these are the lands that belong to our future. In essence what I am asking my colleagues to support is an environmental stewardship that protects our important wilderness areas and precious resources, while carefully and judiciously weighing the short-term desires or our country against its long-term needs. Considering the many reasons why protecting this area is so important, I came across the words of the great Western writer, Wallace Stegner. Referring to the land we seek to protect, he wrote that it is ``the most splendid part of the American habitat; it is also the most fragile.'' We cannot enter this land ``carrying habits that [are] inappropriate and expectations that [are] surely excessive.'' An industrial zone and wilderness cannot occupy the same space. The simple fact is that no matter how well done, oil exploration and development would have significant and lasting impacts on this environment. In closing, I want to remind my colleagues that when the Arctic National Wildlife Refuge was formally created under the 1980 Alaska National Interest Lands Conservation Act, it was to conserve fish and wildlife populations in their natural diversity. Oil development on the coastal plain of the refuge is prohibited without the enactment of legislation authorizing development. I urge my colleagues, to support my amendment and reject the budget resolution's assumptions on oil drilling in the Arctic National Wildlife Refuge. Let us reconfirm to protect today what can never be regained tomorrow if we make the wrong decision now. I hope that we can forever protect the coastal plain from development. It is certainly premature at this time to assume revenue from oil development there. I reserve the remainder of my time.

Mr. ROTH. Mr. President, I want to read from the letter of the League of Conservation Voters, which is the bipartisan political voice of the national environmental community. They write: The League of Conservation Voters urges you to protect the biological heart of the Arctic National Wildlife Refuge by supporting an amendment offered by Senator Roth to the 2001 Budget Resolution that opposes opening the Refuge to oil drilling. Currently the budget resolution assumes revenues from drilling in the Refuge. It goes on to say: Protecting the wilderness values of the Arctic National Wildlife Refuge is one of the top priorities of the national environmental community. How true that is. The Arctic National Wildlife Refuge contains our Nation's greatest wilderness. No conservation area in America contains as much vast wild land free of industrialization. It is the essence of our country's wilderness areas. Consider three or four points. The Arctic National Wildlife Refuge is the only conservation area that protects a complete spectrum of arctic and subarctic ecosystems in North America. The Coastal Plain of the Arctic Refuge is the only wild stretch of coast on Alaska's North Slope that is off limits to oil and gas exploration and development. President Dwight Eisenhower was the first to set aside the original Arctic National Wildlife Range in 1960 for the purpose of protecting the wilderness, the wildlife, and recreational values. While many refuges in America have been set aside to protect wildlife populations and habitat, the Arctic Refuge is the only refuge in which wilderness was recognized as a purpose for establishment, the controversial 1002 area proposed for oil development as a part of the original Arctic range. I could go on. It is critically important that we protect this valuable refuge for future generations. For that reason, I urge my colleagues to vote in support of the Roth amendment. I yield the floor.

Mr. ROTH. Mr. President, is all time yielded back?

Mr. ROTH. Mr. President, I yield back those 2 minutes.

Mr. ROTH. Mr. President, I send an amendment to the desk on behalf of myself and Senators Boxer, Baucus, Jeffords, Schumer, Dodd, Feingold, Lieberman, Murray, Chafee, Robb, and Torricelli.

Mr. ROTH. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. ROTH. Mr. President, I yield myself such time as I may use. I ask unanimous consent to print in the Record letters I have received from many organizations which are concerned about the environment and support my amendment. These include the Wilderness Society, Republicans for Environmental Protection, the National Parks Conservation Association, Friends of the Earth, the League of Conservation Voters, and the National Resources Defense Council.

Mr. ROTH. I yield 5 minutes to the Senator from New Jersey.

Mr. ROTH. I yield 10 minutes to the Senator from New Jersey.

Mr. ROTH. I yield 5 minutes to the distinguished Senator from Wisconsin.

Mr. ROTH. I say to the majority whip, we have others waiting to offer amendments. Have you completed your time on this amendment? I ask the Senator from Alaska.

Mr. ROTH. I say to my friend from Alaska, the majority whip put in a quorum call. I was just saying that if you have completed your discussion on this amendment offered by Senator Roth, then we would go ahead and offer another amendment. The majority leader has told us to stay around until we are down to about 8\1/2\ hours. So that is going to be another couple of hours.

Mr. ROTH. We are anxious to hear the Senator from Alaska.

Mr. ROTH. I am happy to have them join as cosponsors.

Mr. ROTH

Mr. ROTH. Mr. President, I rise today--along with Senator Breaux and others--to introduce a bill to repeal the telephone excise tax. It is a tax that is outdated, unfair, and complex for both consumers to understand and for the collectors to administer. It cannot be justified on any tax policy grounds. The federal government has had the American consumer on ``hold'' for too long when it comes to this tax. The telephone excise tax has been around for over 102 years. In fact, it was first imposed in 1898--just 22 years after the telephone itself was invented. So quickly was it imposed that it almost seems that Uncle Sam was there to collect it before Alexander Graham Bell could put down the receiver from the first call. In fact, the tax is so old that Bell himself would have paid it! This tax on talking--as it is known--currently stands at 3%. Today, about 94% of all American families have telephone service. That means that virtually every family in the United States must tack an additional 3% on to their monthly phone bill. The federal tax applies to local phone service; it applies to long distance service; and it even applies in some cases to the extra amounts paid for state and local taxes. It is estimated that this tax costs the American public more than $5 billion per year. The telephone excise tax is a classic story of a tax that has been severed from its original justifications, but lives on solely to collect money. In truth, the federal phone tax has had more legislative lives than a cat. When the tax was originally imposed, Teddy Roosevelt was leading the Rough Riders up San Juan Hill. At that time, it was billed as a luxury tax, as only a small portion of the American public even had telephones. The tax was repealed in the early 20th century but then was reinstated at the beginning of World War I. It was repealed and reinstated a few more times until 1941, when it was made permanent to raise money for World War II. In the mid-60s, Congress scheduled the elimination of the phone tax, which had reached levels of 10 and 25 percent. But once again, the demands of war intervened, as the elimination of the tax was delayed to help pay for Vietnam. In 1973, the phone tax began to phase-out, but one year before it was about to be eliminated, it rose up yet again--this time justified by the rationale of deficit reduction--and has remained with us ever since. This tax is a pure money grab by the federal government--it does not pass any of the traditional criteria used for evaluating tax policy. First, this phone tax is outmoded. Once upon a time, it could have been argued that telephone service was a luxury item and that only the rich would be affected. As we all know, there is nothing further from the truth today. Second, the federal phone tax is unfair. Because this tax is a flat 3%, it applies disproportionately to low and middle income people. For example, studies show that an American family making less than $50,000 per year spends at least 2% of its income on telephone service. A family earning less than $10,000 per year spends over 9% of its income on telephone service. Imposing a tax on those families for a service that is a necessity in a modern society is simply not fair. Third, the federal phone tax is complex. Once upon a time, phone service was simple--there was one company who provided it. It was an easy tax to administer. Now, however, phone service is intertwined with data services and Internet access, and it brings about a whole new set of complexities. For instance, a common way to provide high speed Internet access is through a digital subscriber line. This DSL line allows a user to have simultaneous access to the Internet and to telephone communications. How should it be taxed? Should the tax be apportioned? Should the whole line be tax free? And what will we do when cable, wireless, and satellite companies provide voice and data communications over the same system? The burdensome complexity of today will only become more difficult tomorrow. As these questions are answered, we run the risk of distorting the market by favoring certain technologies. There are already numerous exceptions and carve-outs to the phone tax. For instance, private communications services are exempt from the tax. That allows large, sophisticated companies to establish communications networks and avoid paying any federal phone tax. It goes without saying that American families do not have that same option. With new technology, we also may exacerbate the inequities of the tax and contribute to the digital divide. For example, consider two families that decide it's time to connect their homes to the Internet. The first family installs another phone line for regular Internet access. The second family decides to buy a more expensive, dedicated high speed line for Internet access. The first family definitely gets hit with the phone tax, while the second family may end up paying no tax at all on their connection. I can't see any policy rationale for that result. Speaking of complexity, let me ask if anyone has taken a look at their most recent phone bill. It is a labyrinth of taxes and fees piled one on top of another. We may not be able to figure out what all the fees are for; but we do know that they add a big chunk to our phone bill. According to a recent study, the mean tax rate across the country on telecommunications is slightly over 18%. That is about a 6% rise in the last 10 years. In my little state of Delaware, the average tax rate on telecommunications now stands at 12%. I can't control the state and local taxes that have been imposed, but I can do my part with respect to the federal taxes. I seek to remove this burden from the citizens of my state--and all Americans across the country. The technological changes in America have increased productivity and revolutionized our economy. As members of Congress, we need to make sure that our tax policies do not stifle that economic expansion. We should not adhere to policies that are a relic from a different time. In 1987, even before the deregulation of the telecommunications market, the Treasury Department concluded that there were ``no strong arguments in favor of the communications excise tax.'' In today's economy, the arguments for repeal are even stronger. Earlier this year, the National Governors Association issued a report concluding that ``policymakers need to create a telecommunications tax structure that more accurately reflects the new economic realities of the market and to ensure that current state tax policy does not inhibit growth in the telecommunications industry.'' Moreover, the Advisory Commission on Electronic Commerce, which Congress established to study the issue of Internet taxation, appears to have reached near unanimous agreement that the phone excise tax should be repealed. Mr. President, it is time to end the federal phone tax. For too long while America has been listening to a dial tone, Washington has been hearing a dollar tone. This tax is outmoded. It has been here since Alexander Graham Bell himself was alive. It is unfair. We are today taxing a poor family with a tax that was originally meant for luxury items. And it is complex. Only a communications engineer can today understand the myriad of taxes levied on a common phone bill and only the federal government has the wherewithal to keep track of who and what will be taxed. Mr. President, it is time we hung up the phone tax once and for all. I urge my colleagues to join me in supporting its repeal.