Freedom Flat Tax Act

Mr. Speaker, I have had the privilege to be seated here in this Chamber and listen to the presentation over the last probably hour and a half or so. It is quite interesting as I listened to the presentation made by my colleagues on the other side of the aisle and the concern about the imbalance in trade, which I am concerned about, and the argument that we need not necessarily free trade, but fair trade.

As I carefully listened to the 60-minute presentation, I hear some things that are wrong, and I agree with some of them, as a matter of fact, most of them, but I heard no suggestions on how we are going to fix this, except ask the administration to do it better and get it right.

I think it is important for us, Mr. Speaker, if we are going to identify these issues that we are going to call problems that we should also step forward and have the will and the foresight to present some solutions.

So in the time I have had here to listen now, I will just present some solutions that I would have liked to have heard from my colleagues on the other side of the aisle, because I think we ought to be here to fix the problems we have.

First, I don't have quite the same number of trade deficit that the gentlelady from Ohio presented in the poster here just a little bit ago. I recall that 2 years ago, actually now 3 years ago, our trade deficit was a minus $617.7 billion. Last year it was a minus $725 billion. Her number was slightly higher than that. We should by now have the records for the 2006 trade deficit. I have not had access to that number, and I note the gentlelady from Ohio didn't present a number for the 2006 trade deficit, but it had been increasing about 20 percent a year for several years.

I heard no evidence that convinces me that NAFTA is the only reason. In fact, I will submit that there are a number of other reasons that we have a trade deficit. I would challenge my colleagues, join with me in some of these solutions that I will present here.

But before I do so, I am just going to go back and review some of the remarks that were made and then respond to them with solutions rather than lamentations, Mr. Speaker.

The gentleman from Wisconsin called for fair trade. He showed a poster that has a minus $233 billion trade deficit with China. I don't dispute that number. I expect that is as very close, if not as accurate, a number as there is out there. But that is a portion of and not even a majority of our trade deficit that we have from a global imbalance.

Then the gentleman from Illinois made the statement ``We need fair trade.'' Fair trade in fact was called for by I believe every one of the speakers, and at least no one disagreed with that.

Well, Mr. Speaker, I refuse to allow my staff to use the word ``fair.'' In fact, I refused to let my children use the word ``fair'' as they were growing up, because I know something that most Americans know, and that is anyone who has raised two or more children knows there is no such thing as fair.

If you are going to use ``fair'' and be able to define the word ``fair,'' you have to be talking about a county fair or a State fair or some other type of gathering where people display their wares, because the term ``fair'' is not definable; it isn't universally understood. So one person's idea of fair is another person's idea of a injustice, and it will be ever thus.

We can talk about justice and equity, and we can talk about using the equal enforcement of trade agreements and laws, and I think we should do that; but to even try to define what we would like to do with a term like ``fair,'' we have chosen the vaguest term that there is in the dictionary and the one that submits itself to anyone's redefinition of it.

Also the statement was made that we have no options, we have to vote these fast track trade agreements up or down. That is not true. Yes, they come to the floor as unamendable, but a couple of years ago, maybe 3 years ago, I amended two unamendable trade agreement, and I did so in committee.

These were trade agreements that had to do with Singapore and Chile. Ambassador Zoellick had negotiated immigration agreements into those trade agreements. And so with the wisdom and tenaciousness of the chairman of the Judiciary Committee, the gentleman from Wisconsin (Mr. Sensenbrenner), we brought those trade agreements before the Judiciary Committee, and although they were unamendable trade agreements, up-or- down, to be voted on, we had a mock markup in committee. And in that mock markup, I was successful in getting two mock amendments put on the mock bill. And when we finished with our analysis of the trade agreements that had been negotiated by the U.S. Trade Representative and had perfected the trade agreements in the process of going through the mock markup, the U.S. Trade Representative then, even though it was supposedly impossible to go back and reopen those negotiations, reopened those negotiations and adapted those two amendments into the trade agreement, and we struck out the immigration language out of the trade agreement. It had no business. It had no place there, and that is one way you can effect a change if you disagree with the trade agreements.

But it sounds to me like the people that are speaking here are against all trade agreements no matter what they might be. They will always be able to oppose any agreement no matter how it is defined because they will always reserve the right to redefine their own term called fair. It will be, it isn't fair. We can't do it because it is not fair. Well, you have to be more specific than that.

As I listened to my colleague from Iowa talk about the Maytag issue at Newton, and that has left a big hole in the central part of Iowa, and I look back on the 34\1/2\ years of my marriage, and there has never been anything but a Maytag washer and dryer in my home washing clothes for our family. That is deep in our heritage, and we are loyal to the brand.

But part of the equation also was that, when it came time to resolve the labor disagreements and to settle the salary and benefit and pension plans, the burden of that was just too high to be able to hold the jobs in Iowa. It is too bad, but those were some of the circumstances that no one over here uttered, when you get collective bargaining and it drives the package up so high; when you overplay your hand, you lose the company. You don't have the option to back down, and the union doesn't come forward and say, I will be happy to take a $2 or $5 pay cut, or maybe we will negotiate the health care plan or do a package that has to do with our contribution versus our benefits, defined contributions versus defined benefits plan, that stuff is hard to get when you have a lucrative labor agreement, collectively bargained agreement, those types of agreements could not be resolved favorably to Maytag. That is one of the reasons why we no longer have Maytag centered up in Newton, Iowa. I think we need to talk about that.

Yes, these jobs are going overseas. But, also, Maytag made an investment overseas to go over there and make washing machines to sell to the Chinese. They invested initially $70 million in that plant. And, finally, after some years of trying, they couldn't make it work and pulled out of that investment.

There are many, many different components to these transactions. It isn't just simply American corporations, that they are simply greedy capitalists and that they quickly move our industries overseas. They are reluctant to go. But we set up the burden of taxation and regulation. And then you have the compensation packages of the collective bargaining agreements; and that being the environment here in the United States, having then to compete against the cheaper labor overseas. All of those things work against us, not just the corporations deciding to make a decision that is simply based on greed. That is not so, Mr. Speaker.

Also, the argument, the gentlelady from Iowa said our trade deficits soar, we need a new trade model. I heard no proposal of what that new trade model is. It is criticism, but it is not a solution. We need to provide solutions.

The other gentlewoman from Iowa talked about Hershey is moving out and going to Mexico. I am saddened to see that go. But some of my colleagues who have been here a number of years have had an opportunity to put a fix in place so we could sustain, could have sustained some of these businesses that we are losing, and we could still sustain many of these businesses today if we could get to work and roll up our sleeves and do the right thing for real tax reform.

That would be to simply bring forward H.R. 25, the FAIR Tax. And that eliminates the IRS and the Income Tax Code, so it eliminates personal and corporate income tax. It eliminates the tax on your interest income, your dividend income and your capital gains. And it eliminates the AMT. It takes the tax off your savings and investment, and your pension and Social Security. It does all of those things.

One of the things I would think my colleagues would want to do if they are concerned about the trade deficit, I would think that they would want to border adjust the taxes so we weren't operating here in the United States at a disadvantage, having to put taxes on the cost of our goods and be competing against imported goods from overseas that do not have that tax component in there. That is part of what they are talking about, is unfair trade, subsidized goods was the term used by the gentleman from Pennsylvania, the onslaught of foreign subsidized goods.

Well, they may be subsidized goods, and I am sure there is a definition that can be applied to that, but we do the opposite. We put the tax burden on everything that we manufacture in this country, on materials and labor, and it has to be built in and embedded in the cost of the things that we sell, because corporations, companies that are in business to sell a good or a service or any combination of the two, do not pay income tax. They can't pay income tax. They collect it from people. The end user, the last stop on the retail chain, are the ones that pay the taxes, but it is collected through the companies that sell the goods and the services, and then they transfer it to the IRS in the form of corporate income tax, business income tax and sometimes the personal income tax of the executives and the shareholders as well.

Corporations and businesses don't pay taxes; they collect it from real people. The consumer is the last stop on the retail dollar. Once we can get our minds around that absolute truth, then we can begin to talk about how we can work together to border adjust our taxes and become a more competitive Nation again.

The studies that we have had done indicate that the components boil down to this: On average, 22 percent of a product that is on the shelf for sale here in the United States, 22 percent is the embedded cost of the tax structure that the company that is producing that product has to build into the price. So that says, if you are selling a widget and that widget is a dollar, 78 cents is the cost of the widget and 22 cents is the cost of the tax.

If you put that on some more expensive items, go from the $1 widget to the $30,000 vehicle, and we have millions of dollars worth of vehicles coming into the United States every year. Some of our trade deficit, I can tell you, would be $800 million worth of Mazdas that

come over from Japan every year, made in Japan, put on ships, brought here, off-loaded into the United States and marketed on our dealers' lots, $800 million. As that price goes up, and that is a couple-of- year-old number, we could be into a billion dollars, and that would be one-700th of our entire trade deficit because we are buying Mazdas but we are not exporting Chevys or Fords back to Japan. If we sent a billion dollars worth of Chevys or Fords to Japan instead of them sending a billion dollars of Mazdas to us, then we pick up a two-for, and we reduce that trade deficit by $2 billion, not $1 billion.

But if you put a Chevy and a Mazda on a dealer's lot and each has a sticker price of $30,000 and they are comparable vehicles, comparable quality and accessories that are built into that price so the competition will establish that price and they are selling against each other at $30,000; if we pass H.R. 25, the FAIR Tax and we cease taxing all productivity in America and we put the tax on sales instead of income, a national sales tax, that $30,000 Chevy, the price of it goes down.

If you take the tax component out, you take 22 percent out of that $30,000 Chevy, and it takes us into that area of $23,400. The Mazda stays at $30,000.

When we put our tax back in, we have to build it back in, the sales tax on the price, now the Mazda goes up by 23 percent, and it ends up as a $39,000 Mazda. That is the amount you would write the check for to drive it off the lot. But you would write the check for the Chevy or the Ford at $30,400. That is an $8,600 marketing advantage that we would gain simply by getting rid of the IRS and the Income Tax Code and put our tax back on sales and allowing these companies and competition to drive the embedded tax component out of everything that we are producing here in America.

That gives us a 28 percent marketing advantage here in the United States. So when foreign companies are competing against American manufacturers, they would have to look at that huge 28 percent advantage that we would have. I can tell you, there would be a lot more products produced in the United States.

I will take you back to the $800 million worth of Mazdas coming over from Japan by ship every year. Those cars are made in Japan. A lot of the components are put together in Japan, and wherever you make something, that is where the labor and jobs are. When we are purchasing from a foreign country, we are transporting and exporting our job market there.

Now, that is true for everything that we are purchasing that is a good from a foreign country. Those jobs, whenever we send money overseas and purchase a good from a foreign country, we are also transferring jobs there.

We pass the FAIR Tax, those jobs come back home, many of them, and we hold most jobs here. We end up with a 28 percent marketing advantage, and it does a number of other things. That is, it doubles our economy in 10 to 15 years. It fixes our balance of trade, that minus-$725 billion, probably a larger number now, because we can compete not only here better, and we will be pulling jobs back here and creating more jobs here in the United States, but also our export markets. Many times the export markets turn on a 1 or 2 percent margin.

We pick up instantaneously a 28 percent advantage from where we are right now if we can take the tax component out of the products that we are selling. So we do a number of good things. We hold our manufacturing base here. We hold our jobs here, especially our blue collar jobs, the jobs like Hershey and Maytag, that are leaving America. These are manufacturing jobs after manufacturing jobs. Those kinds of jobs stay here. We create more jobs here. These are American- made products, and the dollars will stay here. As those dollars stay here, they turn over seven times in a community, as the economists tell us they do. They create more and more and more jobs. Pretty soon we would have that trade deficit gone. We would end up with a trade surplus. We would end up with a healthy, robust industrial base in America and a strong economy that would be doubled in 10-15 years.

If we do that, the rest of the world would have to stand up and take notice. We are already the most dynamic economy the world has ever seen. But we have a problem, a series of them. But, Mr. Speaker, the problem I am speaking of is the problem of going back and indexing Alexander Tyler's statement, that when a democracy realizes it can vote itself benefits from the public treasury, on that day the democracy ceases to exist.

We are at least 44 percent of Americans not paying income tax. If we go to a national sales tax, a FAIR Tax, that does a number of things, but it untaxes the poor, and I will get to that in a moment. But it also makes taxpayers out of every consumer in America. And we are all consumers.

Each time we step up, and I think of little Johnny stepping up to the counter, and he is going to buy his baseball cards, and he is going to put a couple of dimes up there for Uncle Sam. Those children from little on up will understand that the Federal Government is expensive, and they will know that they are funding the Federal Government, and they will be buying into the Federal Government. And they will also be advocating for let me have a few less services and let me keep a few more of my dimes. That penetrates into young people.

I remember a story told by a candidate for Congress in last summer's primary election. He had a little son; I believe his name was Michael. Little Michael had saved up his money. Little Michael, he picked up his box of Skittles, and he had counted out 89 cents for the box of Skittles.

So he put his money up on the counter with the box of Skittles, carefully counted out 89 cents, and the lady at the check-out register rang it up and said that will be 96 cents. He did not have anymore money. He got that look on his face of what am I going to do; they are 89 cents; I have 89 cents. The lady said, well, with the tax. Little Michael turned to his dad and said, Dad, I have to pay tax on Skittles? Yes, that is what you have to do if we eliminate the IRS and the Federal income tax code. You could be a consumer who chooses when to pay your taxes, and like little Michael, pay taxes on Skittles at age seven or eight or less, and realize how expensive the Federal Government actually is.

That changes the psyche of an entire culture. People that are always looking to the Federal Government for a solution begin to realize they are funding the Federal Government and they are part of the solution. They are bought into this.

Going for a national sales tax, a consumption tax, a fair tax, Mr. Speaker, does everything good that everyone else's tax policy does and more besides, and that is not just my words. Those are also the words of one famed chairman who has been the lead guru on economics here in America for a lot of years.

It fixes everything that you can fix with a tax policy. It fixes everybody, all the pieces that come along here, puts them all together and does more besides. It border adjust taxes and it provides incentive for savings and investment. It doubles our economy in 10 to 15 years. It repairs our balance of trade and puts it on a surplus of balance of trade, and this growing economy then, on top of that, Mr. Speaker, it solves our deficit, our deficit in our revenue that we have here, our deficit spending because, when the economy doubles, we are going to have a lot more dollars that come flowing in here.

We replace the payroll tax, the Social Security, the Medicare and the Medicaid, with a consumption tax portion. I advocate for a 23 percent embedded tax that is made of these components. I said I would get back to this.

Three percent of that 23 percent provides a rebate into everybody's household to untax everyone in America up to the poverty level. So let us say the poverty level is $20,000 for a family of four, and I think the number is actually $18,500 for a family of four. They would pay about $458 in a month in taxes if they were going to consume to the level of their income. So this 3 percent goes into a fund, and immediately at the beginning of every month, it would do an automatic transfer into each household as registered by the Health and Human Services for the level of sales tax that that family would pay just up to the poverty level. So anybody that is living at the poverty level or below pays no tax, pays no national sales tax, but those that start

spending above that, above that $18,500, they start then paying the sales tax on that until you get to someone like I presume Bill Gates would be a rather robust consumer, I do not know that, but if I were he, I would be a robust consumer. People of that kind of income will be the ones who will pay the highest percentage of tax off their income. This is progressive, but also, it untaxes the poor. The first 3 percent collected is the portion that goes in to untax everyone up to the poverty level, and then those of us who spend more than the poverty level will pay our fair share of taxes going on up. That is 3 percent.

Eight percent goes to replace the payroll tax, Social Security, Medicare and Medicaid, so that we no longer have to have that most regressive kind of a tax. That is a very regressive tax on especially the lower income people. There is no exemption for you if you are only making $10,000 a year. You are going to take the .0765 percent times two, and that is 15.3 percent, multiply that by your $10,000, and you are going to give up $1,530 to the payroll tax even if you only make $10,000 a year.

So you can see, Mr. Speaker, that is a 15 percent tax on some of the poorest people in America. We eliminate that tax and put it back on consumption. And by the way, when people max out on Social Security, the most wealthy people are paying at a lower rate on the payroll tax than the poor are among us. So payroll tax is a very regressive tax. We replace it with 8 percent. We untax everyone up to the poverty level with 3 percent, that is 11, and then to replace the income tax itself and be revenue neutral that takes a 12 percent embedded tax. That is how we get to 23.

This plan works. Every time I turn this rubrics cube around and look at it another way, it looks better and better and better, but my colleagues over here are content to stand here night after night, give us a list of lamentations on what is wrong with the President, the administration, the previous majority, the decisions that have been made here in this Congress over the last 15 years on trade. They argue that free trade is fine as long as it is fair trade, but I did not hear anyone advocate for any trade agreement that they ever agreed with. So that makes us trade isolationists unless they can come forward with some real changes.

Well, I will submit that I can support trade agreements. I can support them, Mr. Speaker, if we can have smart trade, but also, we need to have a more competitive environment for America's producers. That means pass the fair tax.

Also, a couple of years ago, I was sitting over in China. As I watched the negotiations go on and engaged in them, I saw the eyes of the negotiators on the other side of the Pacific Ocean, and I watched their smiles and I watched their heads nod. We were talking to them about the billions of dollars of intellectual property that is pirated by the Chinese, and it is essentially a national standard. At least there is so much of it that goes on, there is not a punishment going on for it, this standard of stepping in and stealing our intellectual property as quick as it comes on the market.

We might have a Hollywood movie that comes out and before the premier, the DVD has been pirated by the Chinese and it is on the streets in its black market version, undercutting the intellectual property and the creativity of Hollywood. Those things happen.

The copyrights and also the patents and the trademarks, those 3 pieces of intellectual property are consistently and persistently and strategically pirated by the Chinese. The Russians, too, only the Russians just are not as good as it yet, and they are getting better.

As I listened to those negotiations and as we put pressure on them over there to bring criminal charges against those who are stealing U.S. intellectual property rights and selling Rolex watches, fake Rolex watches would be another example that brings to that mind's eye, Mr. Speaker. As we put pressure on them to bring criminal charges and civil charges, they said to us, well, we are fining people for stealing U.S. intellectual property and we are moving forward more aggressively to enforce. So I asked them for a report on those fines, and they gave me 150 pages. It was all in Chinese, Mr. Speaker, so I did not really have the ability to determine that except that, by their witness and their verbal presentation to me, they had levied some fines for X number of yuan, Chinese dollars, but we also know that a government-owned company, that if it is owned by the government and if the government fines that company, it is like me deciding I am going to fine myself and I will take a couple of dollars out of this pocket and put it over here in this pocket. Makes no difference to a Communist State and State-owned businesses if the State fines the company. The State is the company, and so those statements did not move me very much, Mr. Speaker.

Then I asked about criminal charges, and they said, yes, we have brought some criminal charges and we are getting more rugged with our enforcement. So I asked the point blank question: Who have you locked up in jail? Who is in jail today because you are stealing our intellectual property? And of course, the answer was, Mr. Speaker, well, we have not locked anybody up just yet, but we are moving forward to enforce.

Well, I came to the conclusion that the Chinese saw it as a price of doing business. The cost of doing business was to smile and nod and speak nice and make nice to Americans that are over there that want to alleviate the burden of the pirating of the U.S. intellectual property rights and that they will continue smiling and nodding and hosting Americans as long as we are willing to come over there to complain, but nothing is going to happen. Nothing is ever going to happen unless we bring some leverage against them.

So I will submit a second solution for the folks over here and ask them: Do you care to weigh in on this? I would be happy to yield to you, and I hope you come to the floor at a later time, too, or we can get together and you can sign on to some of this legislation that actually provides solutions to the problems that you so articulately laid out here tonight.

But one of these solutions is this. Direct the U.S. Trade Representative to conduct a study to determine and evaluate the loss to American intellectual property rights holders to the Chinese for the pirating of those intellectual property rights. Once that amount is quantified, and Mr. Speaker, I can tell you it is in the billions, then direct the U.S. Trade Representative to levy a duty on all goods that come from China in an amount equivalent to be able to recover the complete loss that American property rights holders have sustained because of the piracy of their property rights and to distribute those proceeds back into the hands of the people that hold the copyrights, the trademarks and the other intellectual property rights.

That is another concrete solution that I would lay out here for the folks that come to the floor and talk about what is wrong but do not provide a solution and do not provide a way to fix things and turn them around and make them right, Mr. Speaker.

I did not necessarily come here tonight, though, to talk about the shortfalls of the presentation that was made by my colleagues on the other side of the aisle. I came here tonight, Mr. Speaker, to talk about a great big issue that we have to face in this country.

As I stand here, this being the week beginning the 5th of March, it has been my understanding for some two to three weeks that the senator from Massachusetts, Senator Kennedy, was preparing to introduce a, I will put it in quotes, a ``comprehensive'' immigration bill sometime the week of the 5th of March. I am hopeful that that does not happen, at least coming out of him, the subcommittee chairman of the Immigration Subcommittee of the Judiciary on the Senate side.

We saw what they did last year over in the Senate and actually passed, and it was an abysmal piece of policy, Mr. Speaker. Now they are winding up to try it again, same person or persons, same face, same philosophy. That same philosophy is amnesty first, enforcement maybe never.

I remember Senator Kennedy standing out here on the Mall just on the West side of our West portico when we had demonstrators by the tens and perhaps hundreds of thousands last spring. He said to them, and these demonstrators, many were not lawfully present in the United States, one can presume I

think accurately, and he said to them, some say report to be deported; I say to you, report to become an American citizen.

That was the clarion call of the left wing liberals and the voice of Senator Kennedy calling for people, come to America, come here illegally and when you are here, we are going to pave the way for a path to citizenship for you and hand over to you all the benefits of American citizenship.

Well, I say to Senator Kennedy, if your mantra is amnesty, those of you who stand on amnesty, you deserve to be branded with the scarlet letter A for amnesty and treated as such because amnesty undermines the rule of law in this country.

These are some pillars of America that are essential for us in order to be able to sustain ourselves and sustain ourselves into the future. In order to identify those pillars of American civilization, we need to look back and identify what has been some of the roots of American exceptionalism. Why are we an exceptional Nation with such a dynamic economy? Why have we been so robust as a people?

There are a number of reasons, but one I would point out is that because we have brought in immigrants from all over the globe, because it was difficult to get here, because many of them had to sell themselves for seven years to pay off their passage to the United States, to work off the cost of that ride aboard ship across from Western Europe, for example, the people that had that sense of a dream, the sense of wanting to come here to realize their American dream, to raise their families here, they also had that sense of adventuresomeness.

Within all of that, the dream, the industriousness, the creativity, the sense of adventure, that desire to join with us in our manifest destiny as we settled a continent in lightening speed, all of that was the vitality that came in with our immigration. We were able to skim the cream off of the crop in Nation after Nation after Nation. Donor Nations gave up a measure of their most vital population because they came here so they could spread their wings and they could excel.

That is one of the pillars of American exceptionalism. Without belaboring that point very much any more, another pillar of American exceptionalism has been the foundation of our Constitution, which is drafted based upon the principles that you will find in the Declaration. And in the Constitution are our basic rights, freedom of speech, press, religion, assembly, and the second amendment rights, the right to keep and bear arms, and what used to be in our fifth amendment, the right to property, which says, ``nor shall private property be taken for public use without just compensation.''

But now after the Keloe decision, it says, ``nor shall private property be taken without just compensation,'' the for public use words have been eliminated from the fifth amendment by the Supreme Court in the Keloe decision.

But up until that time, the sanctity of property rights rode right along with the sanctity of our first amendment rights, and we have done a good job of defending our second amendment rights. Throughout this is the vitality of America, because we have individual rights that are guaranteed, and they are passed down from God to each one of us. Then the individuals, we the people, then hand that responsibility over to our elected representatives to represent us in places like this House of Representatives.

But we have guaranteed rights, and those guaranteed rights and the rights of due process and to be protected from discrimination in a court of law have given us a sense of justice and a sense of the rule of law that gives every American, every American citizen and those who aspire to be American citizens, solid ground on which to stand, confidence that it is predictable into their future so that they can invest capital, borrow money against their property, be able to pay off the mortgage, be able to reach for the stars and dream, create and become an entrepreneur, be one of those people that really makes a big difference and realize their fortune and their dreams. These are some of the foundations of American exceptionalism, but the rule of law is a foundation for it.

If we grant amnesty to people who broke the law to come here, then we have undermined the rule of law. If we undermine the rule of law, we don't have the culture for a strong America any longer. We have lost a pillar for what makes us great.

So to reward law breakers does exactly that. As I listen to people that come in and testify in the immigration subcommittee meeting, I will often hear people; there will be those that come in and say, well, I was a beneficiary of the amnesty in 1986. I came in illegally when Ronald Reagan signed the amnesty bill; there was supposed to be some say as low as 300,000 that would get amnesty. I recall about 1 million, but we know that went over 3 million who received amnesty because the fraud was so rampant.

The document forgers kicked into high gear. For everyone that got a designed amnesty in a legal fashion, there were others who by hook and crook got their amnesty. But all of them are for amnesty today if they happen to be alive and still in this country, and so are their families and their friends for amnesty. They say, well, it is not a hard thing to figure out. It was good for my dad or my mother or my brother or my uncle. Look, they are here in America, and they are doing well.

Why shouldn't we give amnesty to other people, because it has been good to us. Now that is a very simple equation and not a very rational thought process but, for every one we grant amnesty to, there will be several who will say, I think that is a good idea because my friend or my relation thought amnesty was a good idea.

If this becomes amnesty for 12 million or 15 million or for 20 million or more, and they bring in their extended families at the tune of maybe as many as 273 for every anchor baby that comes into the United States, we won't just have 12 or 15 or 20 or more million who have no respect and, in fact, contempt for the rule of law; we will have 100 or more million that will have contempt for the rule of law.

That then would utterly destroy the rule of law in America. We would go back to a third world kind of country where the rule of law doesn't work down south in places like Mexico, Honduras, El Salvador, Colombia. It is the rule of who has the power and who has the guns.

I see that my friend and colleague from Texas, the wonderful doctor, whom I seek his counsel quite often, especially on these technical issues, has arrived on the floor. I would be happy to yield as much time as the doctor from Texas (Mr. Burgess), would consume.

In reclaiming my time, I thank the tenacious Texan for coming to the floor. He knows how much I revere Steve Forbes and Steve Forbes' financial acumen, as well as Alan Greenspan's. Perhaps on this subject matter it is one versus the other.

I also notice the gentleman from Texas, however compelling the argument, didn't present a list of things that his tax policy does better than the tax policy I advocate. But I think we both recognize that either is far better than what we are dealing with today.

There is nothing coming out of the other side of the aisle, particularly from the Chairman of the Ways and Means Committee, Mr. Rangel, except, well, we are going to figure out some ways to raise some of these existing taxes and maintain the convolutions that are within them. That is what we have to look forward to.

The stock market last week had its worst single week in 4 years. I don't think its coincidental that the tax increases that this have come out of this Congress, the Pelosi Congress, and the noises coming out of the Ways and Means Committee, particularly the Chair, have added instability to our New York stock exchange and all of our financial markets. Once the inertia of this continues, we might find ourselves in a significantly poorer situation and not very far from now.

I, also, on the immigration issue, there were some statistics that I had made a promise that I would unfold here and send this message out, and that is that we are faced with a tremendous amount of loss here in America in the lives of Americans because we are not enforcing at our border.

As the gentleman from Texas said, we need to first stop the bleeding at the border and get that under control. We need to push all traffic, both, all products, all contraband, all human traffic, through the ports of entry. We need to beef up our ports of entry.

You know, as I was sitting in an immigration hearing a couple or 3 years ago, I began to listen to the testimony about how many people died in the Arizona desert in a year.

It is a significant number then; it was about 250. Now, I think it is 400. That is sad, and it is tragic, but I, again, wonder, the 11,000 a night that sneak into the United States across our southern border, I sat down there by the fence in the dark and had the infiltration going around on either side of me, and that 11,000 a night is calculated by this Border Patrol agent who testified they stop between a fourth and a third.

And they stop 1,188,000 last year. If you do the math on that, that shows about 4 million a year get into the United States, and out of that 4 million, that works out to be about 11,000 a night.

I would expect there is someone around here that knows the size of Santa Ana's Army when he came across the river. But me being a Yankee, I have to guess at it. I think it was about 6,000 strong. It was then that when they attacked the Alamo at San Antonio. But if it was 6,000 strong or less than that when they attacked the Alamo, I would just suggest that twice the size of Santa Ana's army comes across the border every single night.

They may not be in uniforms, and they may not be marching in orderly ranks, and they may not be all of them armed, but they are carrying with them $65 billion worth of illegal drugs coming into the United States, $65 billion.

And we are spending $8 billion a year on our southern border. And out of that $8 billion, that is $4 million a mile, and we are getting some kind of efficiency rating of our dollars of maybe 25 percent of enforcement, and often I hear a 10 percent number from the Border Patrol people that are down there.

So what is the price to America? $65 billion worth of illegal drugs that comes out of the pockets of Americans. And the price in lives? The question that I ask and commissioned the GAO study for was, How many Americans die at the hands of those who do get across the border? And that number came out, not quite apples to apples and I had to do a calculation or two off of other government studies to match up with the GAO study from April of 2005, and it works out to be this: of the inmates in our Federal and State penitentiaries, 28 percent are criminal

aliens. And I am going to presume that if we had enforced our laws, none of them would have been in the United States.

So if you take 28 percent and you calculate that across the murders that we have in America, and that is about 16,000, a little over that, you will end up with a number 28 percent of that is 4,518 murder victims in the United States at the hands of those who are criminal aliens in the United States. You add to that the victims of negligent homicide, most of them drunk driving victims, and that is going to run 28 percent of those, that comes out to 4,746, Mr. Speaker. So you add those two together, that is 9,264 lives in America die violently every year at the hands of criminal aliens, presumably who would not be in the United States had we aggressively enforced our laws.

That is a shocking and astonishing number. It is three times the amount of victims that we had on September 11, and that is an annual number every single year.

Now, what does it cost us in dollars? Incarceration costs alone of the 267,000 illegal aliens that we have locked up in our prisons that we can count, and many of them we don't know, but we know we can count 267,000 and they will cost us in incarceration costs $6.7 billion just to lock them up.

So we are spending $8 billion on the border on our Border Patrol for maybe 25 percent efficiency; we are spending $6.7 billion to lock up the criminal aliens and hold them in our prisons. And then, on top of that, the cost to murder victims, and that number has been calculated by government numbers at $3.9 million per murder victim. That comes out to be $17.05 billion in the cost of murder victims in dollars. And those victims of negligent homicide, I have measured that a little bit smaller at two-thirds of that overall cost of the murder victim because the investigations don't go so far. That comes to $11.37 billion.

So I add these numbers up: Incarceration costs, $6.7 billion; the value of lost productivity in lives of murder victims, $17.05 billion; the value in lost productivity in lives at negligent homicide victims, $11.37 billion. It comes up to $35.12 billion out-of-pocket costs out of the United States just for those who were killed and to lock up those who kill. That does not include rape victims, assault victims, grand larceny and theft victims. That list goes on and on and on.

Sex victims is another one. We have identified about 240,000 sex criminals who are criminal aliens. And of those, they have at least four identifiable victims. So you do the math on that. It is just a few short of 1 million victims of sex crimes, and many of those are sex crimes where there is a murder involved as well.

The price to this society is unbelievable. It has only begun to be quantified. But to put it in a context, it works like this: $65 billion worth of illegal drugs is costing our economy $35 billion-plus a year, just the victims of murder, negligent homicide, and to lock up those who do the same, $35 billion.

The value of the entire oil industry of Mexico is $28 billion. We pay more for murder victims and negligent homicide victims here in the United States and plus locking them up than all of the oil revenue of a pretty good oil-producing country the size of Mexico.

And then, additionally, another $8 billion a year just to guard our southern border. And on top of that, there will be a report coming out very soon, if it is not out already, that shows that remittances is a term they use. This is a transfer of wages from mostly immigrants here in the United States, some illegal, some legal, out of the United States. That number has been going up incrementally year by year, and last year it was $45 billion a year that was transferred out of the United States in remittances, or usually wire transfers, back to home countries.

This report that is due to come out if it is not out now will show $60 billion transferred in the last year, $30 billion of it going to Mexico, $30 billion of it going to other places in the western hemisphere, but usually the lion's share of that goes into Central America and the Caribbean.

So when you look at the dollars transferred out of our society, $60 billion being sent out by labor, $65 billion paying for illegal drugs, $35 billion to pay for the cost of violent death, and $8 billion to guard the border, you can see, I think, Mr. Speaker, how massive this burden is here for the taxpayers and the victims of crime here in the United States.

And one thing that I have always wondered about crime victims is that if society really paid that whole cost, if we had to write the check for the $35 billion or so that it costs for victims, the violent death in America at the hands of criminal aliens, if we had to write the check for that, the taxpayers would be outraged if it were a line item on an appropriations bill here in the United States Congress.

But, instead, it isn't quite like that. There are costs picked up by the taxpayers, investigations, prosecutions, incarcerations. We pick those up. But the real costs comes out of the lives of the people who are their victims in great huge whopping chunks of their lives, their future, for their families, their productivity, and leaves a hole that can never be healed again.

That is the burden that is all of this, and the injustice of it comes from the psychology that the State is the one that is wronged and the crime victim is made whole when the State believes that they are whole. And the crime victim in this country by our process is seldom made whole, and as a matter of fact, maybe is never made whole.

So we have a big problem here in America. But sometimes there are faces that need to be identified, too, Mr. Speaker, and so I have gathered up some of the faces of these perpetrators. When I stand here and say 9,264 violent deaths in America, that is kind of faceless. I would point out, too, though, that maybe people were skeptical of my numbers. Maybe they think that those numbers are too high. I would ask, what are your numbers? Produce those.

But here is another way of looking at it. Violent death in America is 4.28 out of every 100,000 people. Violent death in Mexico is 13.2 out of every 100,000. That is a good, solid three times the violent death rate in Mexico as it is the United States.

Now, Mexico happens to be one of the more peaceful countries south of us. If you go to Honduras, their violent death rate is nine times that of the United States. And I don't know what El Salvador's is, they don't publish that. But when you get to Colombia, their violent death rate is 15.4 times the violent death rate of the United States. And, on top of that, the people that are coming in from those countries are young men. Young men will commit more than twice as many violent crimes as any other demographic group, in fact, significantly more than that.

And they are coming from countries that are more violent, and they are bringing drugs from those countries to the tune of $65 billion. So there is crime and violence associated with the drugs; there is crime and violence associated with young men. There are young men coming from countries that are far more violent than in the United States. And when you sit down and do the math and calculate out, if you were going to predict the crime results here in America, you would find, Mr. Speaker, that the 28 percent that are incarcerated in our prisons today that are criminal aliens probably don't represent the overall crime impact on the United States society.

But to personalize this a little bit, I have brought a few of the faces of these evil perpetrators down here to the floor. This, being one of the more evil. This is the face of Santos Cabrera Borjas. He is a 22-year-old, was a 22-year-old illegal alien from Honduras, that country that has got nine times the violent death rate of the United States. They can live with a lot higher level of violence.

Here is the kind of violence you get with one of these people. On June 4, 2006, Borjas murdered an innocent 9-year-old boy named Jordin Paudler of Georgia by hacking him to death with a hatchet. Borjas was in a car that was driving through the neighborhood, it had a wobbly wheel, and this young 9-year-old boy Jordin Paudler called out to the car and said, You have got a bad wheel on your car, being helpful, like young boys will do, like a lot of good Americans are. And Santos Cabrera Borjas got out of the car and attacked this young 9-year-old boy with a hatchet and twice split his forehead with a hatchet and left it in, as I understand it, all because he tried to help.

This is an example, and I will bring many of these examples to the floor as time unfolds, Mr. Speaker, and this is one of the faces of evil. There are many, many faces of evil. We have a big debate in front of us. I thank you.

And I thank the Speaker.

Madam Speaker, it has been said over and over again that nothing in this life is certain except death and taxes. I was a practicing physician for over 25 years back in Texas and I've got to tell you, sometimes death seems a little less complicated than our Tax Code. The complexity of the Tax Code has done nothing but grow since the Federal income tax was first introduced in this body in 1913.

When it was first created, the Tax Code was 400 pages. This year, it is 67,506 pages, nearly a 17,000 percent increase, pretty typical of government math. Because I'm a visual person, I would like to show you what the statistics look like.

Here is a picture from the ``CCH Standard Federal Tax Reporter'' illustrating the exponential increase in the Tax Code. What this demonstrates, Madam Speaker, is way back here in 1913, we had one little 400-page book that was the Federal Tax Code, and then we fast forward to 2007 and 2008 and you see the number of pages now that fill the bookshelf, making the complexity of the code something that the average person, quite honestly just does not understand.

Madam Speaker, remember that one of the fundamental tenets of the American legal system, including the tax system, is that ignorance of the law is no excuse. Therefore, in theory, every single American who is merely trying to comply with the Tax Code and file their taxes by April 15 is supposed to be familiar with all of the 67,000 some odd pages that are contained within the Tax Code which comprise the tax rules.

Now, I don't know if my tax preparer back home knows all of the 67,506 pages and you have to wonder about other people in other congressional districts. What about the small business owner? What about the single mom who is just struggling to get by? How are they ever going to know all of the regulations contained within 67,506 pages of the U.S. Tax Code?

The complexity of the Tax Code is a result of countless deductions and exemptions aimed at steering a social agenda, quite honestly, when it's supposed to be a Tax Code. That's one of the fundamental problems with our tax system, is that we try to enforce social policy through the Tax Code rather than seeing the Tax Code simply as a vehicle for collecting those revenues that the government has to collect in order to run. Special interest groups run rampant through every single page of that 67,000 pages. Anytime Congress wants to punish a special interest group or reward another, Congress adds a new credit or a new law to the mammoth Tax Code. The result is a Federal law fraught with opportunities for avoiding taxes and loopholes to be exploited at the expense of fellow Americans. Everyone is familiar with the problems inherent in our convoluted Tax Code, and criticizing the American Tax Code is as American as apple pie and baseball, and for good reason.

Let me share just a few interesting facts on why we need fundamental tax reform. Each year, Americans spend 6.5 billion hours preparing their tax forms, and businesses spend 800 million hours complying with the Tax Code. The cost of compliance for Federal taxpayers filling out returns and related chores was $265 billion in 2005. The average taxpayer pays over $1,800 per household in compliance costs. In other words, that taxpayer works a little over a week just to pay for the cost of preparing his or her taxes for that year.

A study was done back in 1998 when the forms in 1998 were less complicated than they are 10 years later, and it surveyed 46 tax experts. Each expert came up with 46 different answers when determining tax liability. Forty-six preparers, each given the same set of data, 46 different figures to determine tax liability. The tax calculations themselves ranged some $34,000 to $68,000, almost a doubling of the original estimated amount.

The Tax Foundation prepared the following information that actually I think will be of interest to this body:

In the year 2007, a person spent 79 days working to pay for their Federal taxes and 41 days on State and local taxes for a grand total of 120 days. That's more than health care, more than housing, more than transportation. And, honestly, you can see an immediate return on those categories. It's a little bit more difficult to see the tangible return on Federal tax dollars, albeit those are the moneys that are required to have the Federal Government run. But when you look at the bite that taxes take out of the average income compared with all of the other expenditures, it truly is significant.

We all complain about paying our taxes. The fact is if the system was fair and simple, it would be a lot easier to take. Americans don't mind paying for roads. They pay for a strong defense. They pay for health care for your grandmother. It's the fact that one family makes exactly the same amount as the family next door, but they're forced to pay a higher share of the tax burden. The Declaration of Independence says all men are created equal, and that should apply to the tax burden as well.

Now, let me just show you a breakdown by congressional district. Most Members of Congress should be interested in this chart, also produced by the Tax Foundation. In 2004, the Tax Foundation ranked Federal individual income tax burden by congressional district. My district, the 26th District of Texas, falls here somewhere in the middle, and it is highlighted in yellow so its easy for me to see, but it compares the ranking of Federal income tax burden as a percentage of the adjusted gross income versus the ranking of the average income tax liability per return. In other words, with identical incomes, we have some States with a much higher burden and some States with a much lower burden.

Now that is an average across the population, so clearly there will be some differences, but we see New York represented in both the upper and the lower categories. We see California likewise represented in both the upper and the lower categories. So it's not inconceivable that the discrepancy should not be that large; but, nevertheless, because of the complexity of the Tax Code, that's one of the things we're left with.

435 Members of Congress and here is the data from the top seven compared to the bottom seven. You can definitely see varying tax liabilities throughout the country. Again, my district ranked 139th in regards to the Federal income tax burden as a percentage of gross income, but ranked only 127 as the average income tax liability per return. Again, that's more of the Federal Government's math for you.

And yet another aspect of complying with our Tax Code. Time is precious. We often don't have enough of it for personal things, those mundane things like earning a living, raising your family, spending time with your friends, and then there's the dollars-and-cents side of the equation where, in fact, time is money and valuable resources are misspent navigating tax law instead of spent growing the economy and creating jobs. Taken together, this is a strong prescription for real change in our Tax Code.

We know what works when it comes to changing the Tax Code because we got a glimpse of it when during Ronald Reagan's administration he cut the Tax Code in half in 1986. As a result of that reform, the economy grew, revenues increased and jobs were created. I can't think of a better prescription for our slowing economy today than replicating the reform of the Tax Code on an even greater scale.

So what should we do? The prescription is fairly simple. Flatten the tax, broaden the base and shift the burden away from families and small businesses. Simplify the Tax Code and make it easier for individuals and businesses to file their taxes and pay their fair share. Even the National Taxpayer Advocate, Nina Olsen, stated simplify the Tax Code as one of her recommendations in the 2007 Annual Report to Congress:

``The complexity of the code increases the likelihood that honest taxpayers will make inadvertent mistakes, creates opportunities for taxpayers to avoid paying their fair share of taxes, and makes it difficult for the Internal Revenue Service to administer the tax system. Simplifying the tax law could improve the audit process and allow less taxpayer burden.''

Pretty simple stuff. Pretty straightforward. If the National Taxpayer Advocate thinks it is best for our constituents if we simplify the system, it would make sense that Members of Congress on both sides of the aisle would agree with this sentiment and work toward this goal.

Now, this next data I need to credit to some polling done by American Solutions. They conducted a nationwide poll on six different topics, with one being taxes and jobs. This poll crossed gender, ethnicity, economic and party lines, and they discovered the following opinions in America. Under taxes and jobs, 69 percent think the Federal income tax system is unfair. Seventy percent favor tax incentives for companies who keep their headquarters in the United States of America. What a great concept. Eight-two percent think the option of a single rate system would give taxpayers the convenience of filing their taxes with just a single sheet of paper. Pretty powerful stuff. Eight-two percent want to be able to file on a single sheet of paper.

Madam Speaker, it sounds to me as if America has spoken fairly clearly on this subject, and the evidence is that we do need real change in our tax system. The encouraging news is that we have a practical and effective blueprint for making this real change across- the-board. The blueprint is called the flat tax.

In 1981, Robert Hall and Alvin Rabushka proposed a new and radically simple structure that would transform the Internal Revenue System and our economy by creating a single rate of taxation for all Americans. Today, several States have implemented a single rate tax structure for their State income taxes and from Utah to Massachusetts, citizens are seeing the benefit.

In Colorado, a single rate generated so much income, so much revenue, that lawmakers actually reduced the rate 10 years after its implementation. In the State of Indiana, the economy boomed after a single rate went into effect in 2003, and in that time corporate income tax receipts have risen 250 percent.

In 1981, a simple concept put forth by Robert Hall and Alvin Rabushka, revisited in 1995 by my predecessor in this body, former majority leader Dick Armey, and, most recently, within the last couple of years, a book published by Steven Forbes on the flat tax revolution. All of those authors, all of those authors calling for the same type of reform in our Tax Code, to allow it to be flatter, fairer and simpler.

Now we have got several Members of Congress who are actually working on the problem. Certainly it is something that I remain focused on. Congressman David Dreier from California, the ranking member on the Rules Committee, and Paul Ryan of Wisconsin, the ranking member on the Budget Committee, are all working to establish the single tax rate structure for the United States. Members are working on it in the other body as well. Each of us have our own ideas. The legislation proposed is a little bit different, but it all has at the center of it the concept that you should be able to file your taxes on a single form at a much flatter rate that will be fairer across-the-board, and, in fact, evidence has shown that it will actually increase revenue.

The bill that I introduced actually two Congresses ago, and I have continued to introduce it every year, H.R. 1040, it makes it easy to remember the number, H.R. 1040 allows for a person to opt in to a flat tax. They can't go back and forth from the old IRS code and the flat tax, but if they elect to go into the flat tax, they may do so.

If quite honestly they have constructed their family or business finances such that they have been trying to utilize the code to maximize their effectiveness, no one is going to require them to go into the flat tax. They may stay under the old IRS code. But for a lot of people like myself, regardless of whether I would come up better or worse under the flat tax, just to give up that shoe box full of receipts every year, to give up that quality time spent with my accountant every year, to give up that $1,800 or $2,500 that I spend every year on tax preparation, and I promise you, mine are not that complicated, I would gladly give that up to be able to simply file my taxes on a single page form, or, better yet, populate a field on a computer screen on the Internet, click a mouse, send it in, and be done with it for the year.

Now, we all may not agree on just a single rate. I have mentioned some other individuals that have other bills, and they do have different approaches. We may not all agree on whether it should be a single rate or two rates, as it was back when Ronald Reagan simplified the Tax Code. We may prefer a tax method that does allow for deductions for mortgages or charitable contributions. But regardless, regardless, each of them embodies the fundamental principle that each American should bear the burden of taxation equally and at the lowest rate possible; we think everyone should be able to do their own taxes without the help of a professional and should be confident that people who earn the same income pay the same taxes.

Madam Speaker, just as an aside, I remember back in the year 1993, I was just a regular guy working in a medical practice back home in Texas. It just so happened that that year, the President of the United States and myself had an almost identical income reported. And yet when you calculated what I paid as a percentage of income, it was in excess of 30 percent. When you calculated what the other individual paid, it was around 20 percent. So why the discrepancy? With the same amount of earned income, why should there be such a vast difference in the taxes owed and the taxes paid? That is really what got me to thinking about this subject, many, many years ago.

We all remember when the Tax Code was changed in 1993. It was changed retroactively so that we got both the rich and the dead involved in paying additional taxes. But it really got me focused. Then in 1995 when Congressman Armey published his book on the flat tax, I read it, I became a believer, and have continued to study the issue and have continued to talk about the issue. And this is the time of year to have these types of talks, because I do think it is important, regardless of which party is in power, that we take seriously the will of the American people. Eight-two percent, 82 percent, want to be able to fill out a single page form and be done with their taxes.

Just by way of comparison, according to the Wall Street Journal, citing a blog off the National Taxpayers Union website, there are about 1.2 million or more professional tax preparers during tax season, which equals roughly the population of Hawaii. There are 836,000 doctors in the United States. As a physician, I think that there is something a little askew with this number, that we require half again as many tax preparers in the country as we do physicians. Healers shouldn't be outnumbered by tax preparers. The government math stuff is starting to scare me, and really should start to scare a lot of Americans.

Also, according to the Wall Street Journal, more than half of the individual taxpayers now use a paid preparer for their income tax return. I do myself. Mine is not that complicated, but I don't dare go into the process without a professional guiding me, lest someone at some point say, hey, you made a mistake. I want a professional with me if I had to go in to justify what those numbers read on the form.

We actually anticipate the number of people using a paid preparer to increase this year. In 1960, less than a fifth of taxpayers used preparers. More than half now. Less than a fifth, less than 20 percent, back in 1960. In 2005, one of the most famous tax preparation companies garnered $2.4 billion in revenue from the United States in tax preparation, up from $841 million 10 years before in 1996. Pretty astounding. Pretty astounding figures when you stop and think about it.

Now, I respect and I fully appreciate everything that my tax preparer does for me, what my accountant does for me, what tax preparation companies do, and I think it is a shame that Congress has created a system that is so complicated that more than half of the

public feel a need to pay someone, to pay someone else, just to figure out how much they owe for their tax liability. The system doesn't have to be that complicated.

Now, bear with me, if you would, through one last poster, and this really sums it up. A faster, flatter, fairer tax structure, let me show you how it works. It is pretty simple.

Here we go. You put in a little bit of information, like your name; a little bit of identification data, income, personal exemptions, married filing jointly, single head of household; number of dependents. You add up your deductions. Taxable income is line 1 minus line 3. One subtraction equation on the form. And then calculate the amount of tax owed on this particular form, calculate by multiplying line 4 by 0.19. The tax is already withheld. Your tax refund you are owed or the taxes you are to pay. What did that take? According to the clock up there, a little less than 30 seconds. Thirty seconds, and your income taxes are done.

Now, in all honesty, I haven't started my taxes this year. Please don't tell my accountant. But I will spend the better part of a Saturday afternoon, probably this coming Saturday, going to all those places in the house where I have secreted away little receipts and things that I knew I would need when it came time to prepare my taxes. I will gather all of this stuff together and put it in a form that is presentable, take another half day and spend that with my accountant. He will spend several weeks churning it through whatever computer program that he uses. And then right before midnight on April 15th, I will get my tax form to sign, and I will send it in and I will either pay a little in taxes or I will get a little bit of refund.

But look at this. Thirty seconds. Your name, a little bit of identification data, a couple of numbers that are easy to obtain, and taxes are already withheld, your tax liability or your tax refund. No expensive tax attorney bills. No more hours of stressful research trying to figure out whether your military service or your marital status will adversely affect your return. No more headaches trying to determine where the estimated tax payments go. No more Congress taking one special interest group over the other trying to create social good works through the Tax Code. Instead, just a very simple and straightforward system. And remember that number: 82 percent of Americans want something simple like this for their tax preparation.

Now, in my opinion a single tax rate structure would eliminate taxes on capital gains, eliminate taxes on dividends and taxes on savings. You know, we always hear that our savings rate in this country is really pretty low, and that in fact is one of the things that may be behind some of the financial crisis that we find ourself in now.

I will just tell you there was a time when I was in business for myself that I thought the prudent thing to do would be to hold three months, three months, of operating capital in some easily convertible security, like a CD, something that was fairly liquid, earn a little bit of interest along the way, and have that money in case the dire wolf was ever at the door and I needed those funds to continue to operate my business. It seemed like a prudent think to do.

But here is the deal. You earn some interest, but guess what? It is taxed at regular income rates. So it is suddenly eroded by, at that time almost a half, now around a third. And then if you ever get to the point where, okay, I am going to bring that money back into the business and pay it out in salary, well, guess what? If you have held it for over a year in that money market or CD, your business had to report that and pay taxes on it at the end of that first year, and then when you do dispense it as earnings to the owners of the business, guess what? It is taxed again. So it got taxed twice.

So for doing the prudent thing, the prudent thing, holding 3 months of capital in a relatively liquid account so you can get to it if you need it, for doing the prudent thing, you are punished on the interest you earn. So that is not a good deal. You have got to pay taxes on it from your business, and, oh, by the way, if you ever do pay it out to yourself in salary, you get taxed again. So you have been taxed three times on that money that you thought you were doing the right thing. You were putting it away against perhaps a lean month or two. Maybe those Medicare payments didn't come through as fast as I would like, or, God forbid, the SGR cut my payment again for Medicare reimbursement, I would have a little cash to fall back on. But, guess what. If you do that, if you do that, you are actually hurt.

If we were to change the Tax Code, again, with a single rate structure, no capital gains tax, no taxes on dividends, no taxes on savings, which is extremely important, and I personally would eliminate the Clinton tax on Social Security earnings, what would happen? Personal savings would increase.

Would that be a bad thing? Does anyone in this body think personal savings would be a bad thing, particularly given our current economic situation? Businesses might just actually expand and create jobs. Would that be a bad thing given our job creation numbers this past month? We lost a bunch. We didn't create anything.

Without the heavy corporate income tax, which is currently the second highest in the industrialized world, companies would have less incentive to offshore their headquarters and offshore their earnings. If they had less incentive, and those earnings and headquarters stayed in this country, wouldn't that ultimately be a good thing for the state of our economy?

So it really comes down to an all-American principle of freedom, and it comes in a prescription. The decision to move to a single-rate system would be entirely up to the business, not up to the government. This would be an optional program. If someone has constructed their domestic finances or their business finances to maximize their earnings under the current Federal Tax Code, stay in the code, that would be your choice.

But if you are tired of the shoe box, if you want to fill out a single-page return, single-page form, and then have the rest of that time, that half day I am going to spend on Saturday and that other half day I am going to spend on a week, if you would rather have that day to spend with your family, take a personal day off, go fishing, whatever, earn more money, whatever, that's yours. You don't owe it to the government any more.

A flat tax would be less costly. It would save taxpayers $100 billion a year and would reduce cost of compliance by over 90 percent. The resulting increase in personal savings, well, wait a minute, didn't we just pass a big stimulus package? That would have an immediate effect on our American economy by putting that money back in the hands of productive people in this country.

As I said earlier, recent polling by American Solutions shows that over 80 percent of Americans favor an optional, single-page, one-page tax form with one rate. After all, is anybody really going to complain if this one time, this one time Congress does something worthwhile and actually makes something easier? After all, who could complain about making something easier, especially a process that comes with such a high cost?

One of the things we haven't even talked about, and you now hear talked about all the time, is the compliance gap, the 200 to 300 to $350 billion that it's estimated that is owed in taxes but it's not paid in taxes because it's simply too hard to go through all that you have to go through to comply with the IRS code or you are worried about making a mistake and going to jail for misrepresenting yourself on your tax form.

So that compliance gap, the tax gap as it is called, you will hear people talk a bit on both sides of the aisle. They want to utilize, well we are going to go out and do a better job of collecting the taxes, so we will use that $350 billion to offset an increase in the farm program or AMT patch, or, God forbid, we would fix the SGR formula for patients and doctors across the country. But you always hear people talk about that tax gap that they are going to collect that $300 billion and put it to some other good work, but this gets rid of the tax gap. It's gone tomorrow.

You wouldn't have to worry about people not complying with the code because it would be so simple. The cost of not complying would be high. The cost

of complying would become much more bearable.

Well, guess what? This is a very political year. Everywhere you go, people are talking about change.

I will tell you what, I haven't heard the word ``change'' so much since I was an intern at the newborn nursery at the Parkland Hospital back in the 1970s. Everyone is talking about change. You turn on the television, people are talking about change.

Let's consider how that change could improve one of the most complicated of institutions, the Internal Revenue Service. More importantly, let's consider how that change could deliver prosperity, deliver time back to America's families and to America's taxpayers.

You know what, when it gets right down to it, that's a stimulus, that's a stimulus that every American could understand and every American could be for. That's a stimulus package that everyone on the floor of this House should consider and vote for.

I have got a bill, H.R. 1040. Ranking Member Dreier has a bill, Ranking Member Paul Ryan has a bill. I think all of those are worth looking at. I would like to see those brought up in the appropriate committee of Ways and Means, the Subcommittee on Taxation. Let's have the debate; let's have the argument. Let's do it out in the open. Let the American people hear our debate, and let them decide who is arguing on their behalf and who is arguing on behalf of the special interests. I think it would become quite clear after just a few minutes of that debate.

Again, here is an opportunity to give time and money back to the American people. That is a stimulus package of which this body, both sides of the aisle, could be justifiably proud.

Mr. President, today most Americans are struggling with filling out their tax returns which are due tomorrow. This week I am introducing legislation that will make it possible for an American taxpayer to file his or her tax return on one page, a one-page optional flat tax on individuals and businesses at the rate of 19 percent for the first two years and 17 percent thereafter. Think what a change that would be. Taxpayers spend an average of over 26 hours to complete tax returns; and 13.6 hours just to complete form 1040.

Think how different it would be to simply fill out one page and turn that in. In 2005, taxpayers spent 6 billion hours and approximately $265 billion to comply with the Tax Code. Think how much extra leisure time or productive work time we could have if every American had the option of a one-page simplified tax return.

Mr. President, $705 was the estimated compliance cost for a Tennessean in 2005. And operating costs for the Internal Revenue Service almost tripled between 1970 and 2004. Think how much money we would save if every American had the option of filing a one-page, 17- percent flat tax and if every American business had the option of doing the same.

Here is what the optional flat tax legislation I will be introducing this week will do. As I mentioned earlier, it will simplify the Tax Code by providing an optional flat tax on individuals and

businesses. It will be a 19-percent flat tax for the first 2 years, 17 percent flat tax after the first 2 years, and it would create the option to file, as I mentioned, a simple one-page return.

The legislation I am introducing is almost identical to H.R. 1040 introduced by Congressman Michael Burgess, a Republican from Texas, in the House of Representatives. Congressman Burgess introduced his legislation on February 2007 and it has six cosponsors.

My legislation is very straightforward. If an individual selects the option to pay a flat tax in lieu of the current income tax, the option is irrevocable. Under the flat tax, taxable income has a very simple definition. It will consist simply of wages and pensions. You do not start paying taxes on your income--wages and pensions--until you reach a certain exemption level. For a married couple filing jointly, the exemption level is $25,580, indexed to inflation. For the single head of a household, you wouldn't start paying taxes until you reached $16,330, indexed for inflation; for a single person, $12,790, indexed for inflation; and $5,510 for each dependent.

For example, a family of four would not pay the flat tax until the family's combined income reached $36,600. That is $25,580 for joint filers plus $5,510 times two for the two dependents. No other deductions would exist.

This optional flat tax would eliminate the marriage penalty, so it is pro-family. This optional flat tax would eliminate the millionaires tax, which was put in place in the late 1960s to catch a few millionaires and today is catching millions of middle-class Americans. It is called the alternative minimum tax or AMT.

The optional flat tax for businesses is equally straightforward. It gives the business the option to pay a flat tax in lieu of the current corporate tax structure. Once a business selects this option, it is irrevocable. As it is on the individual income tax form, there is a 19- percent tax rate for the first 2 years and then a 17-percent tax rate for all other years. Businesses would be taxed on the difference of total revenue minus expenses--again, a very simple definition of income. Expenses would include wages, pensions, and the costs of new business equipment. This would provide for the immediate expensing of business capital equipment. This immediate expensing should be a very pro-growth provision in our Tax Code--rather than the current Code which requires spreading it out over a number of years. No other deductions would exist.

The current tax system is overly complicated and lengthy. The Tax Code and corresponding regulations are over 67,000 pages and include 7 million words. It was only 400 pages in 1913 when the Federal income tax was first introduced, and it has now grown to over 67,000 pages.

Taxpayers are expected to understand and comply with this complicated Tax Code and it gets increasingly impossible to do. That is why I, and a great many Americans and American businesses, will welcome the opportunity to file a one-page, simplified flat tax in lieu of the current system.

The optional flat tax that I propose is intended to be revenue neutral. It is intended, in other words, neither to raise more revenues than the current tax system or less revenues than the current tax system. Arguably, a simpler tax will raise more revenues because a great many people pay less in taxes because they simply do not understand the forms. But the intention of my legislation is that the taxes collected, the revenue level, will be the same.

Finally, I urge that our nation's revenue level is not about to stay the same. Already the largest share of the average American's budget goes to pay taxes. Taxes are high. Americans currently spend 113 days of every year working to pay their Federal, State, and local taxes-- almost twice the number of days they work to pay for housing and more than three times the number of days they work to pay for food.

Beginning in 2010, the amount of time Americans currently spend working to satisfy their tax bills will increase as millions of lower- and middle-income Americans and small businesses face significant tax hikes. Democratic leaders in Congress have already allowed the state and local sales tax exemption, which affects Tennesseans, to expire. That is $400 a year for 600,000 Tennesseans, and the Democrats appear to be ready to let tax relief for millions of lower and middle-income Americans meet the same fate when those tax levels expire in 2010.

Failure of Congress to act to stop these tax hikes will result in the largest tax increase in United States history, and that is one of the worst things we could do to the family budget. Taxes are too high today and we are about to face the largest tax increase in United States history.

But while we are debating tax issues in the Senate, we can do something much simpler so that next year, when Americans go about completing their tax returns, they do not spend an average of 26 hours. Instead, they fill out one page. They do not take an average of 13.6 hours to complete form 1040; they fill out one page. Compliance costs are not $265 billion; they are dramatically reduced. Compliance costs for Tennesseans, $705 dollars in 2005, go down by hundreds of dollars a year.

The operating costs of the IRS ought to be cut, instead of increasing, as they review one-page optional tax forms. The same would be true for businesses who also would have the option of filing a flat 17 percent tax, on one page. So as we look ahead to tomorrow and filing our tax returns, and we think about the upcoming debate about whether to stop the largest tax increase in history, let's get on a constructive page and say to the American people: By this time next year, April 15, 2009, you will have the option of filing a one-page Federal income tax return with a 19-percent rate for 2 years and 17 percent rate thereafter; businesses will get the same thing.

It will save money. It will encourage growth, and it will relieve a great deal of anxiety that occurs every spring when April 15 rolls around.

I yield the floor, and I suggest the absence of a quorum.

I would thank the gentleman for yielding. Certainly, I was sitting in my office and watching you, watching your discussion with the American people tonight. I am always so grateful that you take the amount of time that you do to come to the floor and explain things to people in simple commonsense language that the average person can understand. I heard your discussion, of course, on fundamental tax reform. As you know, I am committed also to fundamental tax reform.

I knew that you wouldn't want your good friend Steve Forbes to think that you had forgotten all of the good things he had told us in a meeting about his flat tax. So I just wanted to remind the Members of Congress that in addition to H.R. 25, which deals with a consumption tax, there is also another approach to fundamental tax reform, which is H.R. 1040, what a clever number and scheme that is, which is the resurrection, if you will, of the flat tax that was previously espoused and popularized by former majority leader Dick Armey, and, of course, the subject of the ever popular book by Steve Forbes, the ``Flat Tax Revolution.''

I am not sure how many weeks it has been on the bestseller list, but it certainly should have stayed on there for weeks at a time.

This really meets the criteria, meets the test that was set forth by the President at the start of his second term for a simple, fair, pro- growth tax. The flat tax almost immediately eliminates the marriage penalty. It repeals the death tax. It abolishes the alternative minimum tax. If there was ever a time to consider the abolishment of the alternative minimum tax, it is today with more and more middle class

people being pulled into that type of unfair taxation. It eliminates multiple taxation of investment income, and it allows for immediate expensing of business equipment.

This bill, H.R. 1040, which is a voluntary election for a flat tax, it is not a requirement. If someone has constructed their time and their talents and their financial portfolio towards compliance with the IRS code, God bless them, my hat is off to them. But if they would rather take a more fundamentally sane approach to their family's finances, to their business's finances, and wish to elect a flat tax system, this should be available to them.

My concern is that we don't trust the American people enough, that if we gave them the opportunity to coexist with the IRS code as it exists today, it is completely unintelligible and not understandable by anyone with any level of education, or we gave them the opportunity to elect into a simple flat tax that they would choose to do so.

In fact, the gentleman from Iowa is quite aware that, since November, the elections in November, we have heard a lot of discussion from the other side of the aisle about the so-called tax gap, the tax gap being that $350 billion which is assessed by the IRS but never collected.

Well, what are the reasons it is not collected? To be sure, there is some fundamental dishonesty that exists in some people. But some people just look at the IRS code and say it is too complicated, I am going to ignore it and hope it goes away, I am not going to deal with this, and they are caught, and they are punished.

It is a shame that has to happen. If they were allowed the option of having a simple pro-growth system, such as the fair tax, such as the flat tax, I think the American people would be all the richer for it.

I just want to point out one passage in Mr. Forbes's book, which does not deal so much with the bill that I introduced, and I know it is going to surprise the gentleman from Iowa to hear that, but in 1989, a Senator requested a revenue forecast from Congress's Joint Committee on Taxation, on a hypothetical tax increase, raising the top rate to 100 percent. There is a flat tax, 100 percent on incomes over $200,000. The Joint Committee on Taxation responded by forecasting increased revenues of $204 billion in 1990, $299 billion in 1993. Incredibly, the Joint Committee on Taxation failed to recognize or at least assume that people would continue to work and work hard even if every penny of their income was taken away in income taxes.

I suggest that that indicates a departure and a divorce from reality that the Joint Committee on Taxation has, and it is for that reason that it is incumbent upon us to introduce measures that are, again, commonsense, straightforward measures that the American people can understand and get behind.

I notice that the speaker from Iowa had gone on from talking about taxation to talking about issues dealing with immigration. I will just say that we have had a lot of discussion in this Congress since Congress convened in January about the 9/11 recommendations or the recommendations of the 9/11 Commission from a couple of years ago.

To me, the two most important recommendations of the 9/11 Commission that have yet to be enacted, one was quite simply to build stable democracies in Middle East. I think we are doing that. We receive a lot of criticism for doing that, but that is one of the fundamental steps we must take in order to achieve stability worldwide and ultimately gain control in the global war on terror.

But the other concept, and it is so simple that it astounds me that it hasn't been taken up yet, and that is simply to secure the border. Both north and south, our American borders are not secure. They need to be secure; we deserve secure borders. The American people deserve secure borders after the ravages of 9/11, and I think that was a sensible recommendation the 9/11 Commission has made. I frankly do not understand why the House leadership has not taken that up with the seriousness it deserves.

With that, I want to thank the gentleman from Iowa and the Speaker for his indulgence.

Madam Speaker, you know, it is said that nothing in the world is certain except death and taxes. And I'll tell you, being a physician in my former life, that sometimes even death is a little less complicated than our tax system.

The complexity of the tax code is a consequence of countless deductions and exemptions that are aimed not at collecting revenue, but steering a social agenda. And the result is a Federal law that is fraught with opportunities for avoiding taxes and full of loopholes to be exploited, all at the expense of fellow Americans.

My criticizing the tax code is as American as apple pie and baseball, and for good reason, because every year Americans spend billions of hours and billions of dollars, and that's not counting the billions of hours that we spend complaining about the tax code. Time is money, and time should be spent growing the economy and creating jobs.

There is a strong prescription for real change in our tax code. We caught a glimpse of it when Ronald Reagan cut the tax code in half back in 1986. As a result of that reform, the economy grew, revenues increased, and jobs were created. The prescription is pretty simple: Flatten the tax, broaden the base, and shift the burden away from families and small businesses.

And we do have a practical and effective blueprint, it's called the flat tax. Back in 1981, Robert Hall and Alvin Rabushka proposed a radically simple structure that would transform the Internal Revenue Service and our economy by creating a single tax rate for all Americans. Today, several States have implemented a single rate tax structure for their State income tax, and from Utah to Massachusetts citizens are realizing the benefit.

In Colorado, a single rate tax generated so much income that it was reduced 10 years after its implementation. In Indiana, the economy boomed after a single rate went into effect in 2003, and since that time the corporate income tax receipts have grown by 250 percent.

Now, several people in Congress are working on the problem. I have a bill, H.R. 1040, which is a voluntary flat tax. A companion bill was introduced by the senior Senator from Tennessee just this past week. We have bills from David Dreier, the gentleman from California, Paul Ryan from Wisconsin, all trying to accomplish the same goal, and it is so simple. You have a single rate, you have a single piece of paper. You put in your name, just a little bit of identification data, write in your income, there's a line for personal exemptions, calculate your deductions from personal exemptions and calculate your taxable income, multiply it by a flat rate, subtract the taxes already withheld, and you're done. And what did that take? Not even 30 seconds. No more expensive tax attorney bills, no more hours of stressful research, no more headaches. It is much less costly, saving the taxpayers more than $100 billion per year. And it would increase tax compliance. The result: Increase in personal savings, and there is a stimulus package that would have an immediate effect on our American economy.

Recent polling by a group called American Solutions shows that over 80 percent of Americans favor an optional one-page tax return form with a single rate. Now, we hear a lot of talk about change this year. You practically cannot turn on the television without some political commercial talking about change. Well, let's consider how change could improve the most complicated of institutions, the Internal Revenue Service. And more importantly, consider how that change could deliver prosperity and return time, the precious commodity of time, to the American taxpayer. Now, that's a stimulus package worthy of everyone's vote.