Transportation, Treasury, And Independent Agencies Appropriations Act,
Mr. Chairman, I thank my colleague very much for bringing forth this very well-thought-out amendment in the time that we have, and I do know that he worked with the Parliamentarian to make it germane. Let me back up just a moment here…
Mr. Chairman, I thank my colleague very much for bringing forth this very well-thought-out amendment in the time that we have, and I do know that he worked with the Parliamentarian to make it germane.
Let me back up just a moment here before I get started. In the early seventies when the earned income tax credit was started, it was a Republican initiative, and the reason they put it forth and it was adopted is because they said if we give people who earn income, low income, I might tell my colleagues, with children, $34,600 and less, with children, if they will remain working, we will give them an earned income tax credit so that they can keep working and not go onto the welfare rolls. That was the reason for the earned income tax credit as it passed this Congress in the early seventies by Republican initiatives, and I think it was good then and it is certainly good now.
As the gentleman from Tennessee (Mr. Cooper) states, this is a hit at those who can least afford it. Statistics show that this may recoup some $9 billion, and we need to go back for that. We need to go and look for the $9 billion for those people who have used the earned income tax credit and are not to get it, that they do not take that from the Treasury. We do need to go back on that, and I think we all feel that.
We also ought to go after the $132 billion that individual taxpayers cheat on their tax forms with. We also need to go for the $70 billion that offshore corporations steal from our Federal Government, and we also need to go for the $46 billion that corporations cheat our Federal Government for.
Our point is that in this budget, where I am proud to serve as a member of the Subcommittee on Transportation, Treasury and Independent Agencies with my esteemed chairman and ranking member, $100 million is allowed to go after 45,000 low-income people who work every day and earn less than $34,000 with children, one or more children. Why not go back where the money is?
We have got the biggest deficit our country has ever seen. We need to go back and recoup some of that money. I am standing here in the well of the House tonight to tell my colleagues that money, yes, go get it from those people from the earned income tax credit who are cheating our government; but, more importantly, go after the big corporations, those offshore corporations and other high income and other individuals who cheat our country. This is not the time to again put a black eye and to go after those families who are working every day trying to raise their children. The earned income tax credit is a great program, and we ought not go after it to decimate it.
So what our amendment says is of the $100 million that has been appropriated in this budget, leave $25 million there and go after them, try to find those low-income people who are using the system to cheat our government. We hope that we find them. But with the $75 million that is left of the $100 million, go after the offshore corporations who cheat our country, over $170 billion worth. Go after those corporations who cheat our citizens out of $46 billion. So we want to make it even. Go after those in the earned income tax credit who may be making those claims, and not justifiably, appropriately, for them.
This line in our budget, enforcement compliance in the EITC has increased 68 percent over last year's budget. Do we need to increase it that much or should we go after where the big money is? That is all the Congressman is doing, and I surely support the Congressman and commend him for bringing the amendment forward. I am happy to be a cosponsor with it.
The working poor deserve our support during these difficult times. Many of the working poor have sons and daughters who are fighting offshore. I have some of those in my district. I want to try to help them keep their families together, keep their children safe. And the EITC is just one small thing that this government gives them so that they continue to work, yes, many times with no health insurance, earning less than $35,000 a year, raising their families so that they do not go on welfare.
Of course we can do this, and we offer this amendment to say work with the low-income families. They are not asking for a handout. They just need a hand. And we are the Congress that can do that for them. So I support the gentleman from Tennessee (Mr. Cooper). I think he has done an outstanding job here. I am proud to be a cosponsor. Let us go after the big cheats. That is what that $75 million is there for.
All of us want to encourage policies that encourage tax compliance among tax filers, but we know 100 percent compliance is impossible to obtain. Part of the problem is that the IRS does not have the resources to perform the investigations and audits in just about all filing categories.
However, over the years Congress has concentrated its emphasis on tax compliance efforts at the working poor. None of us wants to encourage tax scofflaws, but focusing greater tax compliance solely on the working poor who qualify for the earned income tax credit demonstrates the mistaken tax priorities of this administration.
Former IRS Commissioner Charles Rossotti has offered the estimate that the IRS assesses almost $30 billion of taxes that is cannot collect because of tax fraud. That is a big problem, especially when our government is going to generate a budget deficit of $480 billion and possibly even more by the end of the fiscal year.
This bill provides more money for increase tax compliance efforts. But where does it focus its efforts at greater tax compliance: fraud and mistakes in the Earned Income Tax Credit Program. The administration is shocked by that the EITC has an error rate that is estimated between 27 and 32 percent. According to the IRS, the avoidance costs amount to $7.8 billion or 2.8 percent of the tax compliance problem. Now that's going after the big bucks.
If you looked at the tax compliance mandate contained in this, you would come away with the impression that the working poor are the number one tax scofflaw problem facing the nation. This bill increases provides $100 million in the EITC enforcement budget, over a 68.percent increase. Never mind the fact that 56 percent of the non-compliant taxpayers have incomes in excess of $100,000, and yet they are in the income category that is less likely to be audited.
Simply put, the tax compliance priorities contained in this bill is a misallocation of funds.
The Cooper, DeLauro, Kilpatrick amendment scales back the EITC precertification pilot program to $25 million and intends to restore greater balance in our tax compliance efforts by making more money available for investigating and auditing large and medium sized businesses. That's where the money is. That's where the greater incidence of tax cheating occurs.
The amendment allows the IRS to move forward with the precertification program, but it also encourages the IRS to go after the big tax dodgers like major tax shelters such as corporate trusts, offshore accounts, other abusive corporate tax shelters.
This amendment says lets go after tax cheats poor and rich, and represents a departure from the administration's policy of increasing the tax burden on the poor.