Providing for Consideration of H.R. 4275, Permanent Extension of 10-Percent Individual Income Tax Rate Bracket

PROVIDING FOR CONSIDERATION OF H.R. 4275, PERMANENT EXTENSION OF 10-PERCENT INDIVIDUAL INCOME TAX RATE BRACKET -- (House of Representatives - May 12, 2004)

Mr. SESSIONS. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 637 and ask for its immediate consideration.

The Clerk read the resolution, as follows:

H. Res. 637

Resolved, That upon the adoption of this resolution it shall be in order to consider in the House the bill (H.R. 4275) to amend the Internal Revenue Code of 1986 to permanently extend the 10-percent individual income tax rate bracket. The bill shall be considered as read for amendment. The previous question shall be considered as ordered on the bill and on any amendment thereto to final passage without intervening motion except: (1) one hour of debate on the bill equally divided and controlled by the chairman and ranking minority member of the Committee on Ways and Means; (2) the amendment in the nature of a substitute printed in the report of the Committee on Rules accompanying this resolution, if offered by Representative Rangel of New York or his designee, which shall be in order without intervention of any point of order, shall be considered as read, and shall be separately debatable for one hour equally divided and controlled by the proponent and an opponent; and (3) one motion to recommit with or without instructions.

The SPEAKER pro tempore. The gentleman from Texas (Mr. Sessions) is recognized for 1 hour.

Mr. SESSIONS. 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 purposes of debate only.

The resolution before us is a modified closed rule, the standard rule used for considering tax bills. It provides for 1 hour of debate in the House to be equally divided and controlled by the chairman and ranking minority member of the Committee on Ways and Means.

It also provides for consideration of the amendment in the nature of a substitute printed in the Committee on Rules report accompanying the resolution, if offered by the gentleman from New York (Mr. Rangel) or his designee, which shall be considered as read and shall be separately debatable for 1 hour equally divided and controlled by the proponent and an opponent.

Finally, the rule waives all points of order against the amendment printed in the report, and it provides one motion to recommit with or without instructions.

Mr. Speaker, the legislation that we will be considering this week, H.R. 4275, the 10 percent tax bracket permanent extension bill, is very important to me, to my party, to the American taxpayers, and I believe this country. I support this legislation to fulfill a promise made by our great President, George W. Bush, and the Republican Party that was begun in 2001 when the 107th Congress overwhelmingly passed H.R. 1836, President Bush's visionary plan to provide American workers with comprehensive tax relief.

Among other things, the President's bold 2001 tax plan created a new 10 percent tax bracket, enabling millions of American families to keep more of their hard-earned money. In the period immediately preceding Congress' passing the President's tax proposal, between 1986 and 2000 the lowest tax rate available to these American workers was 15 percent.

The tax relief this new bracket provides to middle-class taxpayers has proven to be very beneficial to our economy and for hardworking families all across the United States. As a result, in 2003 Congress passed H.R. 2, another tax cut championed by President Bush that accelerated the phase-in of an expanded 10 percent tax bracket, increasing the amount of taxable family income that will be subject to this new lower rate. Under this bill the income eligible for this tax rate went up to $14,000 from $12,000, and up to $7,000 from $6,000 for singles.

Unfortunately, because this tax cut language was written as a compromise with the Senate. If Congress fails to pass my bill and permanently extend the 10 percent tax bracket, in 2005, 2006, and 2007 the bracket will shrink back to $12,000 and $6,000 for singles, increasing again briefly and then disappearing forever in 2011 to satisfy the arcane Senate budgetary rule.

If this were allowed to happen, it would mean that some 22 million low-income filers whose tax liability is contained wholly within the tax bracket of 10 percent would immediately be shouldered with a 50 percent income tax increase. I believe that this kind of tax increase on working-class Americans is simply unacceptable. My legislation offers a simple solution to prevent this major tax increase on middle-class families from occurring. It maintains and adjusts for inflation the size of the 10 percent bracket at $14,000 for married couples, $7,000 for singles, and makes this bracket a permanent part of the Tax Code.

If H.R. 4275 is not enacted, it would mean that 73 million tax returns, representing almost 150 million individual Americans, will be hit with a higher tax bill next year, and these taxpayers will face an average income tax increase of over $2,400 over the next decade. It would mean that those 22 million lower-income workers would be pushed into a higher tax bracket, including over 1.7 million hardworking Texans from my State who struggle every day to make ends meet. Congress should not and cannot allow this massive tax increase to occur, and my legislation would prevent this antigrowth scenario from happening.

No other provision of the 2001 Bush tax cut has benefited taxpayers more broadly than the creation of this 10 percent bracket. Studies have shown that the benefits for this provision overwhelmingly flow to lower-and middle-income married earners between the ages of 25 and 54. These are precisely the people that this legislation will help, and I urge all of my colleagues to support this important tax measure on behalf of all American taxpayers.

This week's vote on H.R. 4275 will provide the kind of broad-based middle-class tax relief to which the Republican Party is strongly committed and so am I.

Mr. Speaker, I urge my colleagues to vote with me in supporting this rule and the underlying legislation.

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

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Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I have great respect for what the gentleman was arguing here about this sales tax bill. It is something where the
gentleman from Texas (Mr. Brady) has been joined with by the gentleman from Washington (Mr. Baird), as they have worked for a long, long time. I recall probably a full year ago where I was approached by both these gentleman about being a cosponsor of this important legislation.

The fact of the matter is today we are here to consider this 10 percent bill. Last week we considered other tax bills. Next week we will consider more tax bills. These are being done in such a way that would allow us a chance to talk about the importance of these, not only to taxpayers, but to the middle class of this country. It is my attempt and desire, just as it is with the gentleman from Washington (Mr. Baird) and the gentleman from Texas (Mr. Brady), to continue working with the chairman of the Committee on Ways and Means, the gentleman from California (Mr. Thomas), on the correct bill, the bill that he will support, the bill that will come to the floor, that bill that will pass, the bill that will provide this opportunity for all the taxpayers of these States. I believe it is some 17 States that currently have this problem as it relates to sales tax as a result of those States not having an income tax.

Today we are here for H.R. 4275 because it does the right thing for middle-class wage earners on this 10 percent tax bracket, and I am proud of what we are doing. I think anytime we can join in talking about on the floor of the House a bipartisan approach to lowering taxes, increasing the opportunity for people to have more money, more take-home pay, more opportunity, it is always good.

I have been an advocate of this for a long time. I do not think we should tax savings or investment in this country. That is not a part of what this is about today. We are talking about lowering the tax bracket, making it permanent, doing the right thing. I applaud those people that come to the floor and support this, because it is a great idea that we ought to make permanent.

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

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Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I thank the gentleman not only for his articulation of the wonderful merits of fairness in our Tax Code, fairness for
all the people in all the States. I accept the opportunity for my colleague, the gentleman from Texas (Mr. Frost) to reiterate there
are 7 States that this impacts, and I appreciate his bringing that to light and respect that.

I would tell you that today, this is about the 10 percent bracket. This is a very specific request that we are making to the
House of Representatives today that will be with the other requests that we are making on the parts of the Bush tax plan to make them permanent.

It makes me proud to know that we in the House of Representatives are together on these issues, about their importance of people who are back home, people who are struggling, people who are trying to make ends meet, people who are trying to make sure they provide for their families and do those things which are necessary to their own dreams. It makes me happy, and I am very proud.

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Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.

We have graciously provided Members this wonderful opportunity to hear about the debate of H.R. 4275, providing each other, both parties, an opportunity for Members to hear about an agreement that we believe that this initiative that was begun
by President Bush of this 10 percent tax bracket, one that has now become available, one which we need to make permanent, is the question that is before us today on the floor. We have vetted this process. We have done those right things.
We have gone through the committees. We have done this with numerous tax bills, and we will wish to continue doing that also.

We have an abiding faith in the taxpayer, that special interest group of the Republican Party, the people who get up and go to work, people who make their lives work, people who care about their kids, people who create jobs and opportunity, people who do things because they love their country and they want America to be the strongest, with opportunity and bettering people's lives.

That is part of what this H.R. 4275 is about. It is about bettering people's lives. It is a political consideration that our President, George W. Bush, floated to us years ago. It is about us as Members of Congress hearing that call, seeing people back home who relish this opportunity not to have it taken away. That is the importance of this body. This body is able to debate the issues, is able to bring them forth, is able to talk about them. And that is what is so evident about this great Nation, a majority
rule.

Mr. Speaker, I would say to my colleagues, I too wish we had lots of other things that would be a part of this bill for tax relief.
Today is a day when we will stand up and say we are going to make sure that this 10 percent bracket will be permanent for all taxpayers. I am proud of what we are doing. I ask each of my colleagues to support this rule, this underlying legislation, and the opportunity which I believe will be tomorrow to debate this fully on the floor of the House of Representatives and, once again, give a victory to the taxpayers of this country.

The material previously referred to by Mr. Frost is as follows:

Previous Question for H. Res. 637; Rule on H.R. 4275--Making the 2003 Changes to the 10% Tax Bracket Permanent
In the resolution strike "and (3)" and insert the following:

"(3) the amendment printed in Sec. 2 of this resolution if offered by Representative Brady of Texas or a designee, which shall be in order without intervention of any point of order, shall be considered as read, and shall separately debatable for 60 minutes equally divided and controlled by the proponent and an opponent; and (4)"

Sec. 2. The amendment referred to in (3) follows:

At the end of the bill add the following new section:

SEC. 2. DEDUCTION OF STATE AND LOCAL GENERAL SALES TAXES IN LIEU OF STATE AND LOCAL INCOME TAXES.

(a) IN GENERAL.-Subsection (b) of section 164 of the Internal Revenue Code of 1986 (relating to definitions and special rules) is amended by adding at the end the following:

"(5) GENERAL SALES TAXES.-For purposes of subsection (a)--

"(A) ELECTION TO DEDUCT STATE AND LOCAL SALES TAXES IN LIEU OF STATE AND LOCAL INCOME TAXES.-

"(i) IN GENERAL.-At the election of the taxpayer for the taxable year, subsection (a) shall be applied-

"(I) without regard to the reference to State and local income taxes,

"(II) as if State and local general sales taxes were referred to in a paragraph thereof, and

"(III) without regard to the last sentence.

"(B) DEFINITION OF GENERAL SALES TAX.-The term 'general sales tax' means a tax imposed at one rate with respect to the sale at retail of a broad range of classes of items.

"© SPECIAL RULES FOR FOOD, ETC.-In the case of items of food, clothing, medical supplies, and motor vehicles-

"(i) the fact that the tax does not apply with respect to some or all of such items shall not be taken into account in determining whether the tax applies with respect to a broad range of classes of items, and

"(ii) the fact that the rate of tax applicable with respect to some or all of such items is lower than the general rate of tax shall not be taken into account in determining whether the tax is imposed at one rate.

"(D) ITEMS TAXED AT DIFFERENT RATES.-Except in the case of a lower rate of tax applicable with respect to an item described in subparagraph ©, no deduction shall be allowed under this paragraph for any general sales tax imposed with respect to an item at a rate other than the general rate of tax.

"(E) COMPENSATING USE TAXES.-A compensating use tax with respect to an item shall be treated as a general sales tax.
For purposes of the preceding sentence, the term 'compensating use tax' means, with respect to any item, a tax which-

"(i) is imposed on the use, storage, or consumption of such item, and

"(ii) is complementary to a general sales tax, but only if a deduction is allowable under this paragraph with respect to items sold at retail in the taxing jurisdiction which are similar to such item.

"(F) SPECIAL RULE FOR MOTOR VEHICLES.-In the case of motor vehicles, if the rate of tax exceeds the general rate, such excess shall be disregarded and the general rate shall be treated as the rate of tax.

"(G) SEPARATELY STATED GENERAL SALES TAXES.-If the amount of any general sales tax is separately stated, then, to the extent that the amount so stated is paid by the consumer (other than in connection with the consumer's trade or business) to the seller, such amount shall be treated as a tax imposed on, and paid by, such consumer.

"(H) AMOUNT OF DEDUCTION TO BE DETERMINED UNDER TABLES.-

"(i) IN GENERAL.-The amount of the deduction allowed under this paragraph shall be determined under tables prescribed by the Secretary.

"(ii) REQUIREMENTS FOR TABLES.-The tables prescribed under clause (i)--

"(I) shall reflect the provisions of this paragraph,

"(II) shall be based on the average consumption by taxpayers on a State-by-State basis, as determined by the Secretary, taking into account filing status, number of dependents, adjusted gross income, and rates of State and local general sales taxation,
and

"(III) need only be determined with respect to adjusted gross incomes up to the applicable amount (as determined under section 68(b)).".

(b) EFFECTIVE DATE.-The amendments made by this section shall apply to taxable years beginning after December 31, 2002.

Mr. SESSIONS. Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

The SPEAKER pro tempore. The question is on ordering the previous question.

The question was taken; and the Speaker pro tempore announced that the "ayes" appeared to have it.