Mr. Speaker, pursuant to House Resolution 809, I call up the bill (H.R. 3996) to amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes, and ask for its immediate consideration. Mr. Speaker, I…
Mr. Speaker, pursuant to House Resolution 809, I call up the bill (H.R. 3996) to amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes, and ask for its immediate consideration.
Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker and my colleagues, I hope that this could be considered the National Lobbyist Day for the middle class, because, certainly, this is what we are trying to do.
Let's talk about the issues that we agree on. The alternative minimum tax was a bad idea when it got started in 1969; it's a worse idea now. If the House and Senate and President fail these taxpayers that are being held hostage for a tax that everyone knows is unfair and inequitable and should never have existed, then it would not be a Republican or Democratic issue; it would be that this country let them down. In doing so, we would have violated the trust that we hope that people would have in the tax system. At the end of the day we are committed to eliminate this tax.
My good friend Mr. McCrery and I had agreed early on that the only way you can tackle such a big fiscal problem is through tax reform. So it's clear that we can't do that this year; and so if we do nothing, 23 million hardworking people would be hit with this unfair tax, and we are committed that it's not going to happen. We can talk about that, but I don't think it's necessary.
As far as the extenders are concerned, I really think they speak for themselves. Mr. McCrery and I wish we had enough time to really study each and every one of them as well as other parts of the Code to see whether or not it serves any economic function, but time is not our friend, and so we agreed that we would extend these expiring provisions and review them when we have more time next year. So that's not an issue.
The issue has to be how do you pay for it. This is where we are going to have some major fiscal and political problems. Why? Because the Congressional Budget Office would say that if we did nothing and this unfair tax was not changed, that we would raise $50 billion. That means that even though they may think and hope that we don't do this, they haven't scored that we have to recognize that $50 billion is not going to be there and we, abiding by what we think is fiscally sound provisions in PAYGO, have to recognize that if we do the right thing, we'll be $50 billion short.
What are our options? One, to cut spending by $50 billion. Well, theoretically it may be an option, but politically it's not.
The second thing we could do is raise the revenue. Very interesting, because the major part of the debate if we had time would be if you saw the most outrageous abuse of the tax system where someone was getting preferential treatment and that the only reaction would be how could that happen, and you wanted to close it, take my word for it, to the person that you are closing, what they call an incentive will be considered by them as a tax increase.
Even Secretary Paulson, who wants us to dramatically reduce the corporate rate of taxes, I can't wait to hear how he intends to pay for it, because I know he is going to be talking about unfair advantages that's in the Code, and some Democrat is going to call it a tax increase if he closes the loopholes.
It's really a semantic thing; it's a political thing. But I suggest to you that even if we were not looking at this as a revenue raiser, and you take a look at what we are using, how could you possibly call it a tax increase when we are trying to bring some degree of equity to the system?
It's simple: when people are doing their job, and, I might add, a very good job, in managing other people's money, in creating jobs, in making the economy more prosperous, and making hundreds of millions and billions of dollars
because they have earned it the hard way, creative fiscal management.
And they pay 35 percent in taxes because it's their income, the same way you sell a house, it's your income. You have a law case and they give it to you, it's your income and you pay 35 percent income.
Now, we would like to believe that capital gains taxes means that you're special people, you actually are investing capital. My God, you're taking risks, and so we're going to give you a lower tax rate of 15 percent. But if you find someone who would say that, well, I'm not taking risk but I'm a partnership, and I really think that the way they're paying me, even though it's the same as the competitors are being paid, I have decided that this has been a return on a capital investment. Why shouldn't all of the debate today be on the turning point? When two people are doing the same thing equally as well, and really, being rewarded in a very generous way, why should one group be treated differently than the other group? And if you want to call it a tax increase and bringing equity and fairness to the system and making the field even as it relates to the Tax Code, let's talk about this, because I'll bring some arguments and statements for the people doing the same job and paying 35 percent interest, and they're just as creative, just as good, and they ain't thinking about leaving the business. And so that ends the argument, except for the ones that I'm anxious to hear from my dear friends on the other side of the aisle, because they're not just saying that they're going to stick with their buddies with carried interest. They're saying that we really don't have to deal with this at all. And once I'm convinced that they're right, I'm going to try to do this at home, and that is, we expected $50 billion. You're going to have to live without the $50 billion, but you don't have to cut your expenses by $50 billion, nor do you have to raise the revenue for $50 billion. As a matter of fact, you don't have to do anything. Act like it never happened.
This is not a tax cut. This is preventing a tax increase, so therefore, the money that you expected, the $50 billion, you shouldn't have.
Now, on our side of the aisle, we spell that B-O-R-R-O-W-I-N-G, ``borrowing.'' I know that word is so distasteful to you, but where I got it from was Chairman Greenspan. He said, I supported the Bush tax cuts, but I wanted them to really cut spending. And what did they do?
Mr. Speaker, at this time I ask unanimous consent that I be allowed to yield the balance of my time to the chairman of the committee that has really drafted most of this legislation, Congressman Neal of Massachusetts.
Mr. Speaker, I just hope that the minority leader recognizes that we in the House have a constitutional responsibility to either raise the revenue, notwithstanding what the other body may or may not do, and that should never inhibit us from doing what we consider is the right thing to do, because constitutionally we are right.