Tax Day
Floor Speech
TAX DAY -- (Senate - April 15, 2008)
BREAK IN TRANSCRIPT
Mr. CORNYN. I thank the Chair.
Mr. President, recently, I noted a story in the Wall Street Journal that preceded the primary date of March 4 in Texas, and Ohio as well. Not to pick on our friends in Ohio by any means, but I was interested to see the story discussed of why it is jobs and people were leaving Ohio and why people were moving to Texas. We have had 3 million people move to Texas since 2000.
Basically, the journalist said it boiled down to three things: He said, No. 1, Texas is a State that believes in free trade. We believe NAFTA, the North American Free Trade Agreement, has actually increased jobs in our State and in the United States by creating jobs for those goods that are manufactured here and then sold in Canada and Mexico.
No. 2, the article pointed out Texas is a right-to-work State. In other words, you don't have to join a labor union in order to get a job. You can if you want to, but you are not required to do so as a condition of employment.
No. 3, this article pointed out Texas did not have a State income tax, and I assure you we never will. The people in my State like government as small as possible. They like to keep taxes low, and they realize the decisions we have made in our State have made it a conducive environment for job creators to move to our State to create opportunity for people to move there, to get a job, to raise their family, and to seek to achieve their dreams.
Today, we are talking about tax day for the Federal taxpayer, and I think we ought to learn something from the lessons we have found demonstrated in places such as Texas, where we have kept taxes low. Having lower tax rates is perhaps the best stimulus package you could ever pass. We have passed a couple stimulus packages so far this year. First, the bipartisan package, which will result in a check being written to many taxpayers that they will receive in the next few weeks, and then we also passed a housing bill last week. But I submit the best stimulus we could pass is by keeping taxes low.
This first chart I have demonstrates an uncomfortable fact, and that is the American taxpayer has to work until April 23 of this year in order to pay their taxes. In other words, here we are on April 15, and taxpayers still have another few days, another week or so to work to pay their tax bill before they can begin to work for themselves and for their families and for their small business.
This is another revealing chart, I think, because it points out how many days of the year an individual works, or the average taxpayer works, to pay for essentials such as housing, which is very much a part of our agenda recently because of the housing crunch; health care, health care costs are a significant portion of every family's budget, and the average taxpayer works 50 days a year to pay for their health care; food, equating to 35 days; and transportation, 29 days. As you can see, to pay Federal taxes, an individual has to work 74 days; to pay the State, local, and other taxes, it is another 39 days.
Particularly at a time when the economy is not doing as well as we would like, Congress seems to be acting inconsistently, first of all, in passing a stimulus package which is sending checks to taxpayers because we are worried taxpayers don't have enough money to spend to help stimulate the economy. Yet at the same time, both the House of Representatives and this body passed a budget that raises taxes, imposing almost $2,400 more in taxes onto my constituents in Texas.
Now, it may not seem like a lot of money to some here in Washington, but I can assure you that to many of my constituents, this is real money and money they would prefer to have to invest in their businesses and spend according to their own desires rather than to have Uncle Sam tap them for an additional $2,400.
I would also note this has an antistimulus effect--raising taxes--and is inconsistent with what we are doing with regard to trying to get more money in the hands of the American people to help us boost and stimulate the economy. To turn around and impose an additional almost $2,400 per person in taxes is inconsistent, to say the least, and is antistimulus.
The Heritage Foundation has estimated that if in fact this tax increase goes into effect--the one contemplated by the 2009 budget--more than 70,000 Texans will likely lose their jobs because the budget assumes higher taxes, which will harm job creation and reduce economic output.
I know there is a lot of revisionist history in Washington about what the last 5 or 6 years has been like in terms of the economy, but the fact of the matter is the economy has been very good, by and large. At least 8 million constituents of mine in Texas benefitted from the tax relief we have passed since 2001. I would note, roughly, that same number of new jobs was created across the country--roughly 9 million new jobs--since the tax relief we passed in 2003. In 2007, at least 6.9 million Texans benefitted from the new low 10-percent tax bracket created back in 2001, and more than 2 million Texas families used the $1,000 child tax credit, all of which are timed to expire in 2011, unless Congress acts to make that tax relief permanent.
If there is one thing we could do that would have the surest impact of bolstering the economy, giving people more money to spend as they see fit, it would be to make the tax relief permanent--the relief that was made temporary back in 2001 and 2003. The dividends and the capital gains reductions we passed in 2003 will also expire as well. These, of course, most often impact people when they buy and sell things they own--when they buy stock in their retirement plans, the dividends tax relief in particular. We are going to see that increase dramatically, unless Congress acts to stop the antistimulative effect I mentioned a moment ago.
Today, of course, as I said, is an important day for every American, but it is certainly not a day for celebrating. This is not a holiday for most Americans. Today is a day of observance that is mandated by the Federal Government and an observance which is universally dreaded by the American people--tax day. One of the biggest reasons people hate tax day is because it reminds them of the complex, incomprehensible system through which a faraway agency, known as the Internal Revenue Service, sends them a pile of forms they have to navigate to figure out how much they owe the Federal Government.
They may ask: Do I get a W-2 or a ÐW-4? Can I fill out the 1040EZ or should I get the schedule D form? Do I fill out the 1099 miscellaneous and the 1099 dividend form? What is form 5498 for or 1065 or 4562?
Well, you get my point, hopefully. Our tax laws continue to proliferate and become increasingly complex and increasingly incomprehensible to most Americans. That is why so much money is spent by average Americans getting someone else to help them figure out how to comply with the law. The only thing going down is our comprehension and our understanding of the tax system; all other costs associated with this unnecessarily complex and impenetrable system are going up.
Families and entrepreneurs, as I said, spend a lot of money--billions of dollars--and thousands of hours each year trying to figure out how to do the right thing and how to comply with the Internal Revenue Code. In fact, they will spend more than 6 billion hours complying with the Federal income Tax Code, with an estimated compliance cost of more than $265 billion. This has more than doubled since the mid-1990s. Estimates are it will continue to increase at an even faster rate.
Every year, the National Taxpayer Advocate highlights this complexity in one way or another as one of the top 10 problems taxpayers face. We know the Tax Code is full of special interest loopholes and that with each year the American taxpayer spends more and more time and more and more money to try to figure out how to comply with its burdensome provisions. Taxpayers, as I indicate, are working longer each year to pay for Government--a total of 113 days this year. I think most American taxpayers, if you asked them the question: Do you like the system as it exists now or would you like tax reform, something simpler, flatter or fairer? they would say: Whatever our Tax Code, whether it be a flat tax, a sales tax or an income tax, it should be based on three fundamental ideas: simplicity, fairness, and transparency.
I have to tell you our Tax Code does not, as currently written, meet any of those three requirements--of simplicity, fairness or transparency. I think these simple standards ought to guide us in reforming and simplifying the income tax code. I have heard several proposals made in the last couple days. Senator Wyden, from Oregon, has talked about a flat tax he has proposed. Senator Alexander, from Tennessee, likewise has proposed a tax return you could fill out in one page. Wouldn't that be great, to have a single page, something so easy to understand you could send in a single sheet of paper and know you have complied with your obligations to pay and report your income taxes due?
While comprehensive tax reform may not be right around the corner, the last thing we should do is to raise taxes on families and entrepreneurs by letting the tax relief passed by Congress in 2001 and 2003 expire. I have already talked about the budget and its impact on people in my State, but the budget passed last month would now require 27 million small businesses all across the country to owe an additional $4,100. That is, if, in fact, the revenue projections in that budget are kept, 43 million families will owe an extra $2,300 each, and 18 million seniors will each owe an additional $2,200.
Amazingly, these tax hikes and increased Federal spending come weeks, as I pointed out, after Congress actually voted to send money back to the taxpayers in order to get them to spend it so it would stimulate the economy. We did this at the same time we are raising taxes and basically taking that same money away and more. If we agree that putting more money in the pockets of the American people is the best way to stimulate the economy, why are we still looking to take more money from them during tax season?
One of the most effective tools for combating this and wasteful spending, in general, is more information, and I think a proposal I made yesterday, which I would talk like to talk briefly about, will actually help us hold the Federal Government more accountable for the money it spends and give the American taxpayers more information so they can make sure their voice is heard when it comes to tax policy and how much money we take out of their pockets in order to fund the Federal Government.
Yesterday, I introduced a bill called the Federal Spending and Taxpayer Accessibility Act of 2008. This bill creates an online earmark tracking system taxpayers can use free of charge to search for earmarks by recipient, appropriations bill, State, and Member in real time during the appropriations process.
This legislation also directs the IRS to provide each taxpayer with a concise and easy-to-read personal record of the amount of taxes they have already paid, as well as a projection of the taxes they will owe into the future, up until the time they retire. If this sounds familiar, that is because the Social Security Administration sends a similar statement of Social Security taxes paid and how much you can expect, upon retirement, to receive in benefits. I think it can play an important role when taxpayers are planning their future, to provide them with a better idea of how much they will owe in the future so they can take that into account.
These statements would provide taxpayers with a reminder of how much our Government is spending and give them even more reason to keep track of how their money is spent, along with the political accountability that would flow from that. This legislation would also build on the Federal Funding Accountability and Transparency Act of 2006, which created a one-stop, searchable Web site for all Federal contracts and grants. This legislation would expand the Web site by including the expenditures of all Federal agencies, including salaries, rent, supplies, and transportation. I know not every American is going to be interested in that level of detail, but I think it is important it be made available to everyone who is interested and particularly for the press who can report on it and let the American people know what the facts are.
On this tax day, I urge our colleagues in the Senate to take a new stand
against growing Government, growing spending, and growing taxes.
I yield the floor.
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