Permanently Extending Increased Standard Deduction, and 15% Individual Income Tax Rate Bracket Expansion, for Married Taxpayers Filing Joint Returns

PERMANENTLY EXTENDING INCREASED STANDARD DEDUCTION, AND 15-PERCENT INDIVIDUAL INCOME TAX RATE BRACKET EXPANSION, FOR MARRIED TAXPAYERS FILING JOINT RETURNS -- (House of Representatives - April 28, 2004)

Mr. WELLER. Mr. Speaker, pursuant to House Resolution 607, I call up the bill (H.R. 4181) to amend the Internal Revenue Code of 1986 to permanently extend the increased standard deduction, and the 15-percent individual income tax rate bracket expansion, for married taxpayers filing joint returns, and ask for its immediate consideration in the House.

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Mr. NEAL of Massachusetts. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I think that this bill was summed up perfectly by my friend the gentleman from Illinois when he said that this bill was introduced last week. So the bill was introduced last week and now it is on the floor this week, a complicated tax bill? I think the oldest committee in the Congress, the Committee on Ways and Means, would have had an opportunity to digest the details of this legislation, but this must be some new mechanism that we have developed here whereby on a very important tax matter the legislation is introduced last week and it is on the floor today for discussion without incidentally having gone through the committee, which for people like myself happen to believe that this is the basis of the Congress, sending legislation through the committee so it might be vetted properly and there might be an opportunity for people to examine the details of the legislation before it is brought to the floor.

Let me speak specifically to the tax cut mania that we are hearing in this institution. What is striking about this proposal, Mr. Speaker, is that, I want to remind people, we have 130,000 troops in Iraq who are serving with honor and distinction every single day. We have 12,000 more troops in Afghanistan who likewise are serving this country admirably day in and day out. So here is the strategy in the modern Congress.

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We are simultaneously fighting two wars with three tax cuts.

One of the things that I am most proud of during my time on the Committee on Ways and Means is that we were able to put together the details that balanced the budget of the United States for the first time, I believe, in about 3 ½ decades, and then we projected surpluses where we may well have had the opportunity to repair Social Security, to repair Medicare, to spend some money on education and to have done the things that we all desire in terms of improving our environment. But the strategy afoot today in the modern Congress is you introduce the bill last week, and then you bring it to the floor for a debate without even going through the committee process. So two wars, three tax cuts, $500 billion in deficit, and there is no vetting of this process in front of our committees?

Let me speak specifically, if I can, to the proposal of the gentleman from Illinois (Mr. Weller). Let me tell the gentleman, I know people like the Hallihans. Here is the problem with this proposal: What we give to them with this hand, the alternative minimum tax takes away with the other hand. For a family who already has discovered a couple of weeks ago how ferocious the alternative minimum tax can be, they are going to discover that with the headlines of marriage penalty relief that there is a take-back provision.

So we are going to give them the benefit today of what we deem to be or call marriage penalty relief, and, guess what, Mr. Speaker? The Hallihans are about to discover that if they are a married couple with two children who make $72,000 a year, they are not going to get any relief in this proposal because of the alternative minimum tax.

Now, I along with others have been talking about the problem of the alternative minimum tax for the last few years around here. I said recently seldom have I ever been part of any issue in the 16 years in which I have had the honor to serve here where people said to me, keep up the good work, we appreciate what you are doing on both sides of the aisle, and then we do not do anything about it.

So let me go back to the Hallihans for a second, because I expect that they are going to know about alternative minimum tax very quickly. If they have two children and they take the standard deduction with income of $72,000 a year, let me repeat, they are not going to get any tax relief with this proposal. Part of the problem is AMT, and part of the problem happens to be the President's tax cut proposals.

I am going to go back to what I said at the beginning. How can we be fighting two wars with three tax cuts? That is what we ought to be discussing and deliberating here. We passed $87 billion for the war in Iraq, that on top of $60 billion, and everybody in this institution knows that after the election we are going to need more money for the Iraq war
and the Afghanistan war.

Where are we going to go to get it? I do not know any businessman or businesswoman in America that could hope to run their company the way that we are undertaking tax cut legislation in the modern Congress.

Then on top of that, we stand at the microphones and tell people, you are going to get relief under this proposal, and more relief under this provision. Then they get their tax bill; and they discover not only is there not any more relief, but, because of alternative minimum tax, they are going to pay more.

There are two issues that we should all be able to agree on in this Congress: tax simplification, there ought to be an appetite here for getting it done; and the second part of this issue, we should be fixing permanently the alternative minimum tax. That is what we should be doing.

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

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Mr. NEAL of Massachusetts. Mr. Speaker, I yield such time as he may consume to the gentleman from Tennessee (Mr. Tanner), who was elected on the same day as I was. I would point out he is a member of the Committee on Ways and Means, which generally is in a position to take up these sorts of issues.

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Mr. NEAL of Massachusetts. Mr. Speaker, there are 10 million people, married households who are going to get no benefits from this proposal; 3 million more are only going to get part of the benefits. That means we are denying 13 million married households a benefit that is being promised to them today because of alternative minimum tax.

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Mr. NEAL of Massachusetts. Mr. Speaker, it certainly is a contrast between the two parties. To suggest that this is not about paying for Iraq and Afghanistan is ridiculous. Of course it is. We are borrowing the money to pay for Iraq and Afghanistan: $87 billion. Of course this is entirely relevant.

Also, I do not believe that the Committee on Ways and Means brought this issue up. Maybe I was not there that day.

Mr. Speaker, I yield 6 minutes to the gentleman from Michigan (Mr. Levin), a member of the Committee on Ways and Means.

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Mr. NEAL of Massachusetts. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the gentlewoman from Michigan (Mrs. Miller) earlier spoke of the need for tax relief, and other speakers on the other side have offered different proposals suggesting that we should proceed down this road of tax cuts regardless of whether or not we are going to need this money for Iraq and for Afghanistan.

Now, let me go back to the point that I raised earlier in this debate, and I hope people are listening. Without batting an eye in this institution, we borrowed $87.5 billion for the war in Iraq. Now, the only reason we did not hear the real cost of the war in Iraq is because people would have reacted very differently. Everybody in this institution today, the people that are watching, the people that are here as guests, they know you are going to need more money for Iraq and Afghanistan. Tens of billions of dollars more will be needed for Iraq and Afghanistan.

For years Democrats were accused of being the party of fiscal irresponsibility even though we set the Nation on the right course in the mid-nineties with record surpluses, record economic growth, unparalleled prosperity, and we demonstrated you could balance the budget and still fix Social Security and Medicare.

Today we are, and I want people to listen to this carefully, we are borrowing the money for this tax proposal before us today, borrowing the money and sending the bill to our children. We are fighting two wars. For the first time in our history we are having tax cuts at the same time that we are fighting two wars. We watch the red ink everywhere, $500 billion this year in deficit, and the answer here is let us add more to it.

The President comes forward with a proposal to finance the war in Iraq, which I voted for because I thought those soldiers needed the best equipment and best supplies we could provide them with, but we borrowed the money to do it. And the answer today is, let us borrow money for tax cuts to pay for these proposals. And then people like myself who have been talking about alternative minimum tax for years here were told, well, do not worry because we are just going to do this in a couple of weeks. We are going to fix the alternative minimum tax in a couple of weeks.

The alternative minimum tax problem is going to cost $500 billion to $600 billion to fix. We will not fix it in 2 or 3 weeks here. Everybody knows it. We will have the tax cut of the week in an effort to massage the numbers.

Let me give you another specific quick example of what we seek. The AMT problem reaches in to more families based upon the more kids you have. So the families who take the standard deduction and have four kids with incomes of $64,000, they are not getting any benefit from this proposal today because what they are offering them on one hand, they are taking away on the other. So they suggest we will give you marriage penalty relief, and then the IRS is going to say, aha, take those deductions for those children, take the HOPE credit, and let us tell you what is going to come of it.

What is going to come of it is you are bumped into alternative minimum tax and you will be hit with a bigger bill than you originally would have had.

Now, let me offer some of my political DNA on this issue as a Democrat. I have proposed getting rid, outright, of alternative minimum tax. Just repealing it. That would force this institution and the other body to speak specifically to the issue of the tax cuts that we have seen here, reckless disregard for the future of this Nation's financial security. We are going to need that money for the international commitment that we have made in Iraq and Afghanistan and in the war on terror.

We will need to fix Social Security. We will need to fix Medicare for generations to come. That is not irresponsible to have used those surpluses during the Clinton-Rubin years to pay for the basic requests of the American people.

This is not an issue that is 20 years off. The baby boomers begin to retire in 2011. We are going to need the resources for that. And to the question that was referenced earlier, the suggestion that we are proposing a $206 billion tax increase, we are going to need $300 billion for the war in Iraq.

I will remind this body, General Shinseki said, You need tens of thousands of more troops. He got fired for his wisdom. Lawrence Lindsey, by the way, the architect of the President's economic policies, said 200- to $300 million. He got fired because he had the audacity to suggest the truth to our respective bodies.
Mr. Speaker, I yield back the balance of my time.

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