THUD Appropriations
Floor Speech
THUD APPROPRIATIONS -- (Senate - December 05, 2007)
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Mr. CORNYN. Mr. President, I hear the distinguished Senator from Washington and other Members on that side of the aisle complain about their inability to get things done. But I have to remind them, here we are on December 5, 2007. We have been operating on a continuing resolution because the majority has failed to pass and send to the President 11 appropriations bills.
We are not doing the basic work Congress is supposed to do to keep the lights on, to keep the Government working. Unfortunately, it doesn't stop there.
Mr. BAUCUS. Will the Senator yield?
Mr. CORNYN. I will not yield.
Mr. BAUCUS. I think the Senator from Washington made a point to show the Senator from Texas is incorrect.
Mr. CORNYN. I will reclaim my right to the floor.
The PRESIDING OFFICER. The Senator from Texas has the floor.
Mr. CORNYN. I will be glad to respond to the distinguished Senator after I conclude my remarks.
The fact now is that we have before us an effort--a misguided effort--to protect 23 or so million Americans from a middle-class tax increase. We know health care providers and physicians are going to be subjected to Draconian cuts in their reimbursement rates. We know our intelligence community needs a permanent solution to the Foreign Intelligence Surveillance Act, which will expire in February. And we know that instead of providing the funding to our troops that they need in order to protect us and our allies in the global war on terror, we are seeing strings attached, other qualifications insisted upon by the other party, which have impeded and slowed down and, indeed, to this point stopped our ability to fund our troops.
I wish to particularly, though, focus on the tax increase that, as a result of the inaction of the majority--the so-called alternative minimum tax--is going to take place unless we find some way to work our way through this issue without a tremendous tax increase on other hard-working Americans.
If there were ever a misnomer for a tax, this would be it because for an increasing number of Americans the alternative minimum tax is neither alternative, nor is it minimal.
Congress, it should be remembered, created the AMT almost 40 years ago in response to the testimony of the then-Secretary of the Treasury that 155 taxpayers paid zero Federal income tax on their 1967 tax returns. Unfortunately, but I guess predictably, this tax, created to target the very rich, the 155 who paid no taxes, has now grown to cover roughly 6 million people today and will grow to cover roughly 23 million people next year unless action is taken. It has, in the process, grown to cover more and more taxpayers and now will capture unsuspecting middle- class taxpayers by surprise unless Congress acts. This is because, unlike the regular income tax, the AMT is not indexed for inflation. This means that over time, economic growth and inflation have caused a steady increase in the number of middle-income taxpayers who will get hit by the AMT. Working parents who have children and qualify for deductions and credits under the standard tax system get a rude awakening when they discover they are subjected to the alternative minimum tax, which literally cancels out many of these deductions. This will add unnecessary complexity to the Tax Code and increase tax compliance costs and complicate taxpayers' decisions.
In recent years, Congress has enacted temporary fixes to prevent the AMT from hitting millions of taxpayers with a higher tax bill. While this solution is not perfect, it did at least limit the reach of the AMT.
Now, the Senate has considered legislation on five different occasions that would have either eliminated the AMT or greatly scaled it back. In one instance, not a single member of the majority party voted to fully repeal the AMT, and only one Democrat supported a proposal that would have rolled the increase in the AMT back to rates that took place under President Clinton. Of course, history tells us that President Clinton himself vetoed the bill that would have eliminated the AMT back in 1999.
We know the majority leader has now filed cloture on H.R. 3996, known as the Temporary Tax Relief Act of 2007. Note, Mr. President, the title, ``Temporary Tax Relief.'' While the bill provides limited temporary relief for taxpayers, it, at the same time, permanently increases taxes on America's entrepreneurs and makes it more difficult for the United States to remain competitive in the global capital market. In other words, it makes taxpayers pay for the mistake Congress made 40 years ago when it created the AMT.
The bill makes fundamental changes to the laws affecting the taxation of partnerships. These partnerships have successfully encouraged the pooling of capital, ideas, and skills in a manner that promotes entrepreneurship and risk-taking, and, not to be overlooked, jobs. The bill raises taxes on capital formation in the United States and will increase the cost of and thus decrease the availability of capital to businesses throughout the country. The bill will severely handicap a vibrant and growing part of the U.S. economy in terms of our global competitiveness.
International competition for capital is a driving factor for business. At a time when many of us are raising concerns regarding the competitiveness of U.S. capital markets and pointing out that our economic competitors are doing everything they can to emulate the success of our capital markets, the last thing we should want to do is to put the United States and U.S. businesses to a disadvantage by increasing taxes on capital formation and driving investment dollars away to other markets. We simply can't afford for the Senate to tax long-term investments in a way that puts America at a competitive disadvantage.
Many on the other side would argue that any AMT relief should be ``paid for'' by raising revenue in order to neutralize the effect of the AMT cut. They say they can't just fix the AMT because it is revenue they have already anticipated. This is a revenue which, in fact, they need to fund the ever-increasing growth of the Federal Government, unfortunately demonstrated by pork-laden appropriations bills and a bloated budget. At every turn throughout the year's appropriations season, we have seen the majority push for more and more spending. Threatened with a Presidential veto, they have dared the President to veto these bloated spending bills, only to find us in the mess we are in today.
Those on the other side of the aisle have been counting on the increased revenue from the AMT to fund their growth of the Federal Government.
They seem to consider the mistaken growth of the AMT to be some kind of windfall profit, and, in fact, they seem to have forgotten where the money comes from in the first place. We all should know it comes from hard-working American taxpayers, families, people in my State of Texas who already pay their fair share of taxes and can't afford to bear the burden of the Government's mistakes. So rather than fix the AMT and protect taxpayers from this unwarranted and unexpected tax increase, my colleagues would prefer to replace the AMT revenue with a new tax under a new name. I have to tell you that this kind of shell game is a too typical Washington approach.
Instead of figuring out ways to keep the hands of Washington bureaucrats in the pockets of taxpayers, this Congress ought to continue to do all it can to protect millions of middle-class taxpayers from a tax that no one ever intended for them to have to pay in the first place. Taxpayers already work for 4 months out of the year to pay their local, State, and Federal taxes. The last thing Congress should be doing is increasing the number of days American taxpayers work for Uncle Sam instead of for their families.
What is worse, Congress's inability to provide timely AMT relief will also cause unnecessary delays in processing tax returns and getting refunds to taxpayers who are entitled to them. The IRS Oversight Board, an independent board created by Congress as part of the IRS Restructuring and Reform Act of 1998, told Congress just last month that a delay threatens the IRS's ability to process returns and issue refunds in a timely manner and will impose a significant burden on taxpayers. But that is where we find ourselves today as a result of the mismanagement of our agenda.
According to the IRS governing Oversight Board, delaying the filing season by just 2 weeks would delay the processing of 6.7 million returns, putting a hold on $17 billion in refunds owed to hard-working American taxpayers. If the tax season is delayed by 1 month, this would delay 40 million returns from being processed, and $87 billion in refund checks owed to taxpayers would remain in the Federal Treasury. This is real money to real Americans, and the political games surrounding it ought to end. We should not be using the AMT relief as hostage to be exchanged for tax-and-spend policies and the growth of the Federal Government. Taxpayers can't afford it and neither can the American economy.
Mr. President, I yield the floor.
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