Tax Reform And Infrastructure
Mr. Speaker, I appreciate the groundwork that is being carefully laid by Senate Finance Chair Baucus and Ways and Means Committee Chair Camp. It's absolutely essential that we reform a tax code that is hopelessly complex, unfair, and often…
Mr. Speaker, I appreciate the groundwork that is being carefully laid by Senate Finance Chair Baucus and Ways and Means Committee Chair Camp. It's absolutely essential that we reform a tax code that is hopelessly complex, unfair, and often counterproductive. The system is reaching the point of breakdown. The complex patchwork is difficult to administer, invites tax engineering, if not outright evasion, and is hugely expensive for those who are just trying to meet their obligations.
Through mistake and evasion, we lose approximately $365 billion of revenue each year that should be paid to the Treasury--$1 billion a day--and the estimated cost of compliance is $168 billion. With simplification and careful enforcement, we could easily gain tens of billions of dollars of revenue and allow individual taxpayers and businesses to shift resources away from compliance and tax engineering to growing the economy and providing for our families.
While we all may disagree with some fundamentals, it would be a mistake to begin with our areas of disagreement. I commend the chairmen for working to build common understanding on a path forward.
There is one area that has not been part of the tax reform discussion but is every bit as critical as solving our budget deficit, and that's to deal with our infrastructure deficit. Every day brings more stories of a Nation slowly falling apart and falling behind other nations that are modernizing their infrastructure, like Japan, China, India, and the European Union, all of whom spend more of their economy on infrastructure than does the United States.
Last week's potential water emergency in Prince George's County underscores a point made by my friend, Representative Don Young from Alaska: we leak more water than we drink; 1.9 trillion gallons of water is lost due to inadequate infrastructure underground. It is water, sewer, the electrical grid, transit, roads and bridges--the American Society of Civil Engineers has estimated we need to spend $2.3 trillion in the next 5 years just to maintain basic standards.
Transportation reauthorization finance is under the committee's jurisdiction, and it's fast approaching, with a highway trust fund unable to meet even current inadequate requirements. This resource gap prevented us from being able to enact a full 6-year reauthorization last Congress, hence, we're facing it again next year.
In the 20 years since the gas tax was last increased, the purchasing power of the fund has eroded dramatically due to inflation and increased fuel economy, so that the average motorist is only paying about half as much per mile as they did in 1993.
The failure to meet the revenue needs has required increased borrowing from the general fund, adding $55 billion to the deficit just to meet the current inadequate levels. At the same time, we've seen a collapse in the construction industry, costing hundreds of thousands of family wage jobs and slowing our economic recovery.
Resources have become increasingly inadequate to meet basic transportation needs, but at the same time the consensus among key road users in support of an increase has grown ever stronger.
A vast coalition has emerged in support of raising the fuel tax, which includes business, the professions, organized labor, nongovernmental organizations, the truckers, transit, and cyclists. The list of supporters is as long as it is varied.
Allowing an inflationary increase for the highway trust fund was part of the Clinton deficit reduction plan back when we had balanced budgets. More recently, it was included in the recommendation of the chairs of the President's deficit reduction committee, Alan Simpson and Erskine Bowles. Making infrastructure a part of the larger tax reform proposal will meet a critical and growing need for our economy. It will help satisfy the concerns of those who were insisting on more revenue, but do so in a manner that's supported by a broad, diverse, and powerful coalition of interests.
We all have a stake in funding to rebuild and renew America. It's not just the quickest way to put people back to work but also to make our communities more livable, our families safer, healthier, and more economically secure. And it just might be the smoothest path to tax reform as well.