Tax Increase Prevention and Reconciliation Act of 2005--Conference Report

TAX INCREASE PREVENTION AND RECONCILIATION ACT OF 2005--CONFERENCE REPORT

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Mr. WYDEN. Mr. President, before he leaves the floor, I wish to say to the distinguished Senator from Mississippi that I am certainly not interested in class warfare. But what I am interested in is giving all Americans a fair chance to accumulate wealth. This legislation doesn't do that, and that is why I am opposed to it.

My sense is that everybody in our country wants to do well. Everybody aspires to be well off. Everybody wants to be able to get ahead. Yet that is not possible in many respects because of our Tax Code.

The American people just finished the annual ordeal of doing their taxes. This spring, Warren Buffet, the second wealthiest person in the United States, paid a lower tax rate than his receptionist. But under this bill, that receptionist isn't going to get much of anything.

Senator Lott made a point with respect to the next tax bill. We are going to have another bill, Senator Lott said. But the bottom line is the oil companies get their boost in this bill today. What Senator Lott and others have said is maybe sometime down the road we will start talking about middle-class folks.

I think we have to give everybody in this country the chance to accumulate wealth. We have to do more than hand out gusher giveaways to a fortunate few.

That is why I have introduced the Fair Flat Tax Act that gives everybody in our country the opportunity to accumulate wealth.

So we are clear on this oil issue, I want the Senate to understand some of the history of it.

On November 9, 2005, the CEOs of the major oil companies came to a joint Senate hearing of the Energy and Commerce Committees. I asked them then--it had never been asked in a public forum--whether they agreed with the President's statement that ``with $55 oil we don't need incentives for oil and gas companies to explore.'' The CEOs of ExxonMobil, Chevron, Conoco, Phillips, and BP-Shell for the first time agreed that the tax breaks which had been provided in the Energy bill weren't necessary.

Having heard that statement, I said I want to begin, on a bipartisan basis, to start working with colleagues in the Finance Committee to scale back these tax breaks that, to his credit, the President of the United States said aren't even necessary. I began to work with the distinguished Senator from Montana, Senator Baucus, and the Chair of our committee, Senator Grassley, to try to start rolling back those tax breaks. It was a very modest step that was taken. Our committee repealed one of the tax breaks that dealt with what are called geological and geophysical drilling expenses. But we got it passed, and for the first time in 20 years, the Senate Finance Committee--I think Senator Lott was even there that day--a tax break that the oil companies had gotten was taken away. Repealing that tax break would have saved about $1 billion. It certainly is not everything that is needed to deal with these exploding deficits but a solid step in the right direction.

You then have a conference between the Senate and the House. At a time of record profits, at a time of record prices, this bipartisan amendment to make a modest reduction in the kind of tax breaks that the President said are not needed when oil is over $55 a barrel pretty much disappeared. It was cut by more than 50 percent.

I say to my good friend from Mississippi that I can't accept a double standard where the oil companies get their tax breaks today--they get them right now--and yet, the Senate will come back and maybe sometime down the road start talking about relief for the middle class.

I want to work with the Senator from Mississippi. He and I have worked together on many occasions. That was why I felt that the bipartisan agreement I got in the original Senate bill was so important. But what I can't accept is a double standard, where you have the gusher giveaways today on the oil side and then we hear--as we heard on the floor of the Senate--we will come back with another bill at a another time and maybe at that point we can talk about tax relief for middle-class folks.

Another comment was made that I want to highlight about former President Ronald Reagan who, of course, is revered and respected by all. The last thing President Reagan did, to his credit, in the tax area is he worked with colleagues on both sides of the aisle, with former Senator from New Jersey, Bill Bradley; the former chair of the Ways and Mean Committee in the House, Dan Rostenkowski, on overhauling the Tax Code.

One of the steps that they agreed on is we were not going to hit the cops who walk the beat with a higher tax rate than somebody who is out investing, say, in Google stock.

We had a bipartisan agreement back in 1986 that we weren't going to discriminate against wages. We weren't in this country going to say that the people who work hard and play by the rules and make their money from wages are going to get hammered.

What the Senator from Mississippi said I found very interesting with respect to Ronald Reagan because what Ronald Reagan embraced in 1986 is exactly what I am calling for in my Fair Flat Tax Act. That is an approach that says we are in it together. We are all going to be able to accumulate wealth. Everybody is going to have a chance to get ahead. Everybody who aspires for a better life for themselves and their families would have an opportunity to do it under the Fair Flat Tax Act.

They sure don't under this bill with those oil gusher giveaways right now.

We have been told that sometime in the future, we will come back to talk about middle-class folks, and we will have a discussion about their needs and what they hope for their families sometime. This is one other area where, again, I have a little bit of a difference of opinion with my friend from Mississippi. He has talked about the fact that corporate profits are up, revenue is coming in. Of course, we are glad to see all of that. But the reality today is this is the first time in decades when corporate profits are up and productivity is up--both trends we like to see--that middle-class people are seeing their wages stagnant. The middle-class folks are not enjoying the fruits of these benefits of additional revenue. Again, I want our corporations to do well. I want to see the incredible improvements in productivity. What I think every Member of the Senate ought to be talking about is that not all Americans are in a position to enjoy these developments. That is why any time when I go home and have a community meeting, almost all of the issues raised by my constituents have the second word ``bill.'' They ask about their gas bill or medical bill or mortgage bill or tax bill.

That is why I want to work with Senator Lott on a bipartisan basis so that when we have an expansion of corporate profits, when we see an increase in productivity, the middle-class person can get ahead as well. We are not seeing that today.

In fact, the Federal Reserve said the other day that, for all practical purposes, over the last 5 years, the net worth of middle-class folks has hardly moved. What I want to do is what Ronald Reagan and Bill Bradley and others did back in 1986--make changes in the Tax Code so that everybody has the opportunity to accumulate wealth.

I wrote a bill, the Fair Flat Tax Act, which does that.

In fact, I am saying this to Senator Lott because I would love having a chance to work with him.

I took the same brackets that Ronald Reagan did. I chose the exact same tax brackets that Ronald Reagan did for my Fair Flat Tax Act.

It is an indication that if we can have a bipartisan effort, as we saw two decades ago before the 14,000 changes in the Tax Code since 1986, we could see once again Democrats and Republicans coming together to continue the trend toward expanded corporate profits and corporate productivity, but we would not be leaving the middle-class person behind.

That is what is so unfortunate about what has happened. My proposal allows us to save about $100 billion over the next 5 years. By contrast, the tax legislation before the Senate increases the deficit with more tax cuts that aren't paid for.

In terms of tax compliance, you can go to my web site, wyden.senate.com to see my simplified 1040. People at Money Magazine were able to complete this form in just 15 minutes. But this year, Americans spent more complying with the Tax Code than the government has spent on higher education. Is that what we want? Is that our vision of tax reform? I don't think so.

I think we want to build on the kind of bipartisan effort we had in 1986. We had a revered Republican President, Ronald Reagan, who has been cited on the floor today, coming together with Democrats in both the Senate and the House. We were able to do something that allowed us to grow the economy and also let middle-class folks get ahead.

Is it right that the cops who guard this wonderful institution pay a higher tax rate on their wages than Warren Buffett does as the second wealthiest person in our country? I don't want to soak anyone. I want everyone to be able to get ahead. I want everyone to be able to accumulate wealth.

What we have been told under this tax bill is that the oil companies get theirs today, but we will have some other day, some other time, some other opportunity to talk about the interests of the middle class. That is not fair to the people of this country. We have said we are all in it together. We should not have a double standard with the powerful getting theirs today and working families having to wait for another time. That is not right.

While we are, for example, putting a little patch on the alternative minimum tax in this legislation, and I am glad to see that--the crushing costs of this tax are not being addressed. My fair flat tax legislation abolishes the alternative minimum tax altogether. That is what we ought to do before we see this thing ramp up and up and up, engulfing millions of middle-class folks who end up having to pay their taxes twice.

I will wrap up with one last point. In this legislation, as we look at the tax cuts being offered in the bill to a fortunate few, we are seeing in the legislation that those who have crafted the bill are taking the very money Senator Baucus and I have sought in order to keep rural schools open, something Senator Lott and a number of colleagues on the other side have been with us on a bipartisan basis. Senator Baucus and I asked, are we going to sell off hundreds of thousands of acres of our public lands in order to pay for the rural schools? We did not think that made any sense. So we said we are going to go to the drawing board. We are going to come up with an alternative. We did that. We said we were going to keep money from going to tax dodgers, make sure they paid what was owed, and to make sure the federal government honors our commitments to rural schools, rural schools in Oregon, in Mississippi, and all across the country.

It is possible, as Ronald Reagan and Democrats did in 1986, to make the Tax Code simpler, flatter, and fairer, and allow us to grow our economy and do right by the middle class. The legislation I have introduced, the Fair Flat Tax Act, is a starting point for the debate. We ought to understand, certainly on the Committee on Finance where I have the honor to serve with Senator Lott, that there is a lot of give and take in a tax debate.

What I do know is the bill that the Senate will be voting on before too long does not give all Americans the opportunity to accumulate wealth. That is why I must oppose it.

I yield the floor.

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