Madam Speaker, it's been an interesting day here on the floor. And as always, an honor to have a chance to speak here. What we have just witnessed was not a pleasant event. It was terribly sad. It's tragic when anybody in Congress,…
Madam Speaker, it's been an interesting day here on the floor. And as always, an honor to have a chance to speak here. What we have just witnessed was not a pleasant event. It was terribly sad. It's tragic when anybody in Congress, especially a leader, a chairman, is found to have engaged in conduct inappropriate to such a degree as a Member of Congress, particularly as the chairman of the Tax Code- writing committee.
We have heard some things that were a little bit surprising. I heard Chairman Rangel say there was no self-enrichment. I heard people talk about the lack of precedent for something like this, to have such a horrible sentence as to have to stand before the Speaker and be told to pay the taxes that were actually due and owing, or should have been paid previously when they were due and owing, and how horrible that was. So a little surprising that I would hear a fellow colleague make a comparison to the death penalty and life in prison.
I have had the unenjoyable responsibility to sentence people to death before and to life in prison. And I would daresay you could bring back those sentenced to life--you couldn't bring back those sentenced to death where it's been carried out--but they would not agree that standing before the Speaker and being told to pay the taxes that you didn't pay back when you should have was anything equivalent and fair to be compared with a life sentence in prison.
With regard to precedent, all kinds of precedents come back to mind, all types of displays of integrity. We heard people say across the aisle that because someone conducted themselves in such a heroic and noble fashion in war that they deserve to be left alone and to be honored, and in fact apparently deserving of a standing ovation for failing to comply with the laws that he himself helped create.
Precedent? You want to know precedent in this country? You can go down the Hall from this Chamber and go to the rotunda and look around and see massive paintings that evidence precedent. You see 56 signers of the Declaration of Independence who pledged their lives, their fortunes, their sacred honor. And they didn't withhold any of those.
We are reminded of I believe it was Thomas Nelson, a signer of the Declaration, who pledged his life, his fortune, his sacred honor. I believe it was Nelson who, during the siege of Yorktown, had indicated that since the British officers were in his home, his home should be fired upon, that that was the British headquarters. The soldiers apparently responded that, sir, this is your home. He said, this is where the enemy is. Take out my home.
Precedent? People who pledged their lives, their fortunes, their sacred honor, who lost family members, who lost everything, all for the sake of us having liberty and freedom some day. And say that we have not--it's okay to just flagrantly fail to abide by the laws that we ourselves create.
Precedent? There is the big mural of Washington standing there with a piece of paper in his hand. And people file by that by the thousands every day and don't really understand the precedent that that established.
Precedent? I will tell you precedent. George Washington was made commander of the Revolutionary military. Many of the soldiers enlisted around the time of the signing of the Declaration of Independence, July of 1776, which means that their enlistment was to be completed in January of 1777. Most of that time was spent in retreat in front of vastly superior British forces.
December 24, things were so desperate Washington talked to his generals, and he believed they should move across the Delaware. Even with all the ice, even with so many of his men not equipped, many without shoes, they should travel across the Delaware and engage the most feared mercenaries in the world. His generals said there is ice in the river. We could lose the entire revolution if we do this. Washington said if we don't have a victory, it's going to be lost anyway.
He himself came up with the challenge words. If a soldier was to be challenged that night, ``Halt, who goes there?'' The challenge words that would allow the challenger to know that this was an American would be, ``Victory or death.'' It was that important.
They traveled across the icy Delaware. And, no, George Washington knew better to stand up in a boat, especially in an icy river. They caught the Hessians off guard and routed them, took them prisoner. Some were killed.
It was a major victory. But many of the American soldiers felt like they were not going to reenlist when their time was up.
On December 27, 1776, the Continental Congress did the unthinkable. They were seeking a democratic republic where people would govern themselves, and yet they passed a law to give Washington basically all the power, all the financial power he needed to win the war. Do whatever you need, pay whatever you've got to pay, because the Continental Congress knew that, if these guys didn't reenlist, they were all dead. Their families would be dead. They would be dead. Everything would be gone. Everything they had worked for in their lives would be gone.
But they had pledged their lives, their fortunes, their sacred honor, and here they put them in the hands of one man. They sent a cover letter with a copy of the bill to Washington, in essence, explaining that we are giving you all this power, but because we know you, and we know your absolute integrity, that when you have no further need of this power you will give it back.
Precedent? That was a precedent. No man has ever been given that kind of power in the United States' history. Paulson came close with his Wall Street buddy bailout that he was able to wrangle. But they knew Washington. There was a precedent.
He didn't get the copy of the bill in the letter until the men either had to reenlist or go home. Washington urged them to reenlist, and virtually no one did. He made a second plea, not knowing he had the power to raise their salaries. And his plea was so heartfelt, because they knew this man's heart, that most of them reenlisted anyway. Then he later found out the power he had.
Precedent? The precedent came when George Washington won the Revolution and did what no man before or since has ever done. He did what's depicted in that picture where he is standing there with his resignation in his hand, and he says, symbolically, here is all the power back. I did what you asked with absolute integrity, and now I'm going home.
That's a precedent. That's incredible humility and integrity that we haven't seen around here in a long time. That's a precedent. Talk of precedent, during Chairman Rangel's hearing. Compared to those kinds of precedents?
You know, when George Washington resigned, he had sent a resignation letter to the 13 Governors. And at the end of that resignation letter, and it was printed, circulated throughout the 13 States, he said, he ended with these words. What a precedent this is.
``I now make it my earnest prayer that God would have you, and the
State over which you preside, in His holy protection; that He would incline the hearts of the citizens to cultivate a spirit of subordination and obedience to government, to entertain a brotherly affection and love for one another, for their fellow-citizens of the United States at large, and particularly for brethren who have served in the field; and finally, that he would most graciously be pleased to dispose us all to do justice, to love mercy, and to demean ourselves with that charity, humility, and pacific temper of mind, which were the characteristics of the Divine Author of our blessed religion, and without an humble imitation of whose example in these things we can never hope to be a happy nation.''
He signed it, ``I have the honor to be with great respect and esteem, Your Excellency's most obedient and very humble servant, George Washington.''
There is a precedent. There is absolute integrity. There is humility.
You would never have heard Washington stand up and say, hey, at least I didn't self-enrich. There was no self-enrichment even though Washington, in his case, it was truth.
Precedent, we are told. We are told about precedent here when you have this historic building where you have so many acts of selflessness that have been carried out.
You know, Webster probably should have been present. I am not sure that he was right in what he did. I think he was wrong when he urged other Senators to join in the Compromise of 1850. But apparently Webster believed, even though he was a strict abolitionist and believed, as we all should, that no one should be enslaved, no one should be owned by another individual--precedent. Well, I am just taken aback.
In this hallowed Hall, no self-enrichment. Webster stood up knowing that if he urged the other Senators to join in a Compromise of 1850, though he probably would be President, if he said that, he would not be. He tried that after he urged them to do that, but it didn't work out. He figured it wouldn't. That was selflessness rather than selfishness.
There was a case where there was no self-enrichment or self- deprecation. He never became President, and historians point to that act. Right or wrong, he believed that there would be a civil war if they did not have the Compromise of 1850, and he believed that in 1850 the Nation would not be able to withstand a civil war. Maybe it wouldn't have. It almost didn't when it began in 1861. But that was a precedent. That was selflessness. That was a case of no self- enrichment.
Or how about in the impeachment of Andrew Johnson when a man is carried on a gurney so that he can cast a vote and the vote failed by one? There are all kinds of cases of precedent, of selflessness, of cases in which there was no self-enrichment.
Yet that's brought up in this case of Chairman Rangel. I like Chairman Rangel. He is a fun guy to talk to. He is a fun guy to be around.
Until this episode, I thought he was a very, very smart individual. But for his statements to be true, that he had no idea that he was doing anything wrong, then there would have to be a vast amount of ignorance. There is no law against ignorance. We are all ignorant in some areas. But after I heard the comment ``no self-enrichment,'' I asked for the case evidence.
Well, it turns out in Punta Cana, in the Dominican Republic, the respondent, Chairman Rangel, purchased a villa at the Punta Cana Yacht Club in 1987. It talks about he had quarterly payments due, 10.5 percent interest. He could use the villa for up to 9 weeks a year. The remaining weeks it could be rented out by the resort with proceeds from the rentals going into the rental pool from which he received benefit or, some might say, self-enrichment.
For his portion of the rental pool, it's income. Obviously, we can't call people a liar, so we will say, okay, he was telling the truth. He had no idea that when he was provided money or that that money was paid toward a home which he purchased to pay off his mortgage he had no idea that that was income.
Now I would think to help make that kind of an assertion, it would help if the chairman of Ways and Means also came into this body and in addition to saying, there is no self-enrichment, I had no idea at the time that I was making these mistakes, I would think he would add, Do you know what? Since I'm chairman of Ways and Means and I can't figure this stuff out, and even I am completely ignorant of what is accrued income to me, what we need to do is either have a flat tax or a fair tax where I never have to fill out another document again, it's just taken care of, there's no mistakes. Because this obviously is so confusing that even the chairman of Ways and Means cannot figure it out.
Well, the evidence goes on that in late 1992, early 1993, the management of Punta Cana decided to eliminate any remaining interest due on the mortgages of the respondent with some early investors; and in 2009, by that year, the respondent's, Chairman Rangel's, rental pool's earnings paid off his original mortgage and the financing of the third bedroom addition. See, most people would realize that if other people are paying money to rent out your villa and you're getting checks, as apparently came at some point directly from the rental pool to Chairman Rangel, some would say, do you know what? I'm getting this extra money into my pocket, do you know what? That is probably income. Some would realize that when people are renting your villa, and that money is going into a pool from which your mortgage is being paid an additional equity, every quarter it's increasing, that that would be accrued income or self-enrichment. But apparently that was not realized.
So as a former judge, I know we look at other evidence to see if there are indications that anything might have been discerned about the classification of this obvious income or benefit to most people, and the evidence points to a January 1993 letter written to Reiniere at this Punta Cana resort in which Chairman Rangel said, I hope you can provide me with a copy of the contract we have with the Punta Cana which includes the third bedroom addition, what equity has accrued and if there is an outstanding balance. He wasn't sure that there was an outstanding balance because even though he may not have been paying the mortgage, it was getting paid from somewhere, and then though he apparently did not realize that by others paying his mortgage for him that it was income, he said in this letter, his words, as I mentioned to you, the House Ethics Committee requires the disclosure by Members of Congress of any assets and unearned income, and while I enjoy a good relationship with the committee's chairman, it certainly would be politically embarrassing if I were unable to provide an accurate accounting of my holdings.
Apparently, at the time he wrote the letter, he realized they were holdings. He realized that there was equity accruing, which many would consider a form of self-enrichment. He indicates that since Members of Congress are required to disclose assets and unearned income that he would need the information from Punta Cana to indicate what income had come in.
As we understand, there has also been the issue raised, well, gee, statements came back in Spanish, and so we really didn't know what it all meant. However, the evidence indicates on a letter that was sent to Chairman Rangel, please find enclosed your statement of account as of June 30, 1996, for the CO owners' rental pool that shows a total net income, and apparently the word ``income'' in English in the letter did not resonate with Chairman Rangel that ``income'' meant it's income, and it didn't trigger the thought that maybe since they're saying it's income, I should report it on this thing called an income tax return.
But it says there was net income of U.S. dollars $3,294.95. So I understand since that's spelled out in English that can be a little confusing, especially where they say the net income to Chairman Rangel was this specific amount. But then again, maybe self-enrichment means something other than what I understand. And I think most people understand that you made money off something.
Well, the original financial disclosures--I didn't even ask about this stuff until I heard Chairman Rangel use the term that there was no self-enrichment. So I asked for the documentation here just this afternoon, because I was struck by ``no self-enrichment.'' That doesn't sound right. But
apparently the 1998 original financial disclosure--this was after the letter was sent to Punta Cana saying I have to disclose all assets on my financial disclosure I have to disclose as income, and even after he got a letter saying here is how much in U.S. dollars you had in income, he doesn't disclose it on the financial disclosures for 1998, 1999, 2000 per letter agreement.
And then finally in 2001, he does start reporting the income between $5,000 and $15,000, that's the category, until 2004 when the category was $2,500 to $5,000. But also in the evidence in the record, it shows that for 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006 no income was reported from this income as described from Punta Cana on the original income tax returns of Chairman Rangel.
I suffer from the problem of having, before I was a judge and chief justice, having been in a Federal courtroom of a judge who was known to tell people he sentenced who had not reported every dime of income they actually had. So found guilty of failing to pay all of their income tax, income tax fraud, he would instruct them that they had committed this horribly heinous crime. The reputation was that they would be lectured that they had committed this heinous crime by taking food out of the mouths of children who couldn't feed themselves or shelter from those who had none by this heinous crime and then be sent to prison, doing hard time in prison.
So I didn't get as concerned about this until I heard the chairman himself saying here on this floor there was no self-enrichment; they were just innocent mistakes. Yet in his own words, in his own letter, he acknowledges he needs to know what is his income from Punta Cana, from his villa there. He indicated he has to disclose these things, even though he didn't, and didn't report for years on his income tax return the fact that people were paying rent to his villa and that money was going to pay off his mortgage.
See, I think most people across America who may not even know what the Ways and Means Committee is and that it writes the tax laws, they have an idea that if they buy a home or they buy a villa, whether in the Dominican Republic or here in the United States, and it is leased out, and after paying expenses for the home there is additional money left that is used to pay off the mortgage and then is eventually sent in a check to that person who brought the home, they kind of get it, that that is income, that is self-enrichment. And that is why so many people do that if they can afford it, because they like the idea of renting out a facility, having others pay off their mortgage, and they end up owning it. But they understand when people are paying off their mortgage for them, that is income.
Now, it is true I have the luxury of having sold, cashed out, virtually all of my wife's and my assets, retirement accounts, because I believed so strongly in the need to change the direction this country was going. So as it gets reported annually in papers back in Texas, I have less assets than anyone. Right now, because we have such a wonderful nice home, we are trying to sell that. We are in the black when it comes to net assets, but without the home we are not. But I don't have the difficulty that Chairman Rangel does because I cashed out my assets to live on while I ran to be in this body.
But I took income tax law in law school, and I have read through the income tax forms before. Now, for a number of years, we have an accountant do it. But it is staggering how many people that I have talked to, some who never went to college, but they get the idea that if you buy a home, buy a villa and rent it out, and that rent pays your mortgage and then eventually the rent is sent to you, that is income. In both places, when it is used to pay off the mortgage and when it comes to you, it is income.
And it sure looks like, from the chairman's letter in 1993, that he knew it was, too, at least at that time. But maybe a short time after he wrote that letter, maybe he forgot. And when we hear the stories about the information being in Spanish--and I don't speak Spanish--that makes some sense. But most people would say, I need to get somebody who speaks Spanish to read these documents.
There is a lot more evidence, but that is pertaining to the villa in the Dominican Republic. I think it is wonderful that he was able to have a vacation home like that and have people pay it off for him, but it certainly ought to be able to be discerned by the chairman of the Ways and Means Committee that that is income.
So when we hear talk during that proceeding about precedent, and, you know, even a little modicum of the history about this place, how we got this because of the sacrifice of so many who pledged everything, just as our soldiers do, and then we have someone say, hey, don't forget I served honorably. Well, it broke my heart every time I had to sentence someone to prison who had served honorably but then later was convicted of a felony and came before me as a judge. It was heartbreaking.
And I bet if Duke Cunningham had it to do all over again, a former Member of this body and extremely decorated, as I understand the greatest ace of a pilot that we had in the Vietnam War, I bet he would like to know that the Rangel defense is that if you served honorably before, you don't get in trouble other than having the Speaker tell you to pay back taxes that you owe. What kind of a censure was that?
You would think that a censure is saying you did wrong in very blunt terms. Instead, it sounded like, hey, go pay the taxes that you obviously owe. It's amazing, just amazing.
I did not intend to get into this tonight, but I was so taken aback that someone would here on this House floor and say there was no self- enrichment when the evidence seems to speak for itself. I know that I am limited by the rules as to what I can say about it, but the evidence speaks for itself. How can there be such ignorance about what self- enrichment is? It is staggering.
And then, before I speak, I have to listen to a colleague from across the aisle who tells us that actually Bush gave us $4 gas, in his words. It is nice when people take responsibility for what they have done. It's not so nice when people blame others for the mistakes they themselves have made.
And it is interesting that since the Democratic majority took control of this body and chairmanship of every committee, that they could still blame Bush for everything that happened in 2007 and 2008 even though the Constitution puts the responsibility squarely on Congress to have a budget, to make appropriations, not the administration. They can submit one. But constitutionally, it is this body's obligation to appropriate and not to spend too much money. So how do you keep blaming Presidents?
And yet we know when the Republicans took the majority in 1994 and were sworn in with the majority in 1995, if you believe the Constitution, then it was the Republican Congress that balanced the budget in those days. And if you go back historically and look, although President Clinton takes credit, oftentimes he was rather upset about the things that this Congress did to get the budget balanced. Now he takes full credit and congratulations.
And apparently there was something to having a Congress that was in different hands than the President, because certainly when President Bush took office in 2001, although I wasn't here, there apparently was a giddiness. Wow, we have the House, Senate, the White House. Now we can just spend like we never have before. And all of the restraint the Republican Congress had used in the late 1990s seemed to go out the window. And so we ran deficits, and Democrats were proper to point those things out in my first two years of 2005 and 2006. They are right. We should not have run a deficit budget. But the claim was, if you give us the gavel in January of 2007, we will fix all that. And instead, that is not what happened.
So to continue to correct things that have been said here inappropriately this week, including today, I even heard the Speaker, Madam Speaker herself, say a number of times, once in here, but said many times, it is, in essence, irresponsible to have across-the-board tax cuts, just extend the current tax rate as it is into the future, even though the lowest rate is 10 percent and those that earn the highest amount of money pay 35 percent, and even though common sense would tell you if the rate were 10 percent across the board for poor and rich alike, the rich would still pay more money. The
more you make, the more you pay. Except what many people don't realize is that the people on Wall Street that make so very much money, that contribute to Democrats 4 to 1 over Republicans, they as Art Laffer explains, rich people like that have control over the amount of income they bring in in a given year. They have control over where that income is paid.
They have control over the manner in which it's paid. They can control all kinds of things about their income; whereas, someone who is a wage earner, a brick mason, as Laffer has pointed out, has to lay the bricks where they are. He can't control where he derives income. The wealthy can and have moved from States or cities that increase their taxes too much. The rich can control those things.
So, Warren Buffett, how noble for him to say he should be paying more taxes. Well, it would seem to me to be a whole lot more noble if he'd just pay them, instead of allowing his accountants and lawyers to come up with all kinds of schemes and ways to manipulate the income so he doesn't pay the taxes that he would if he were paying a 10, 15, 20, or 35 percent tax. When you are wealthy, you are in a position to control how you receive income and what years you receive it in.
Many people who are wealthy have been receiving income this year before the rates go up on January 1. I've heard from people who are wealthy that they have money to invest, that they have money that they would like to spend to create housing developments and things; but, you know, there is just too much uncertainty with regard to the taxes, so they're not going to do the building. It would be insane. They don't believe, I think rightly, in starting to build homes when nobody is buying them because nobody is sure what the future will hold in the way of taxes. So those who are in a position to create jobs are not creating them because of the uncertainty created by this majority and this administration.
We've been told, even though we are in December now, that the tax rates will go up greater than they ever have in the history of this country on January 1, so there is all this uncertainty. Capital gains rates shoot up and all of these marginal rates. Every rate of income tax goes up. The thing to do is just extend the rates to give that certainty. But oh, no. We probably would have done that, but there was just too much we had to cover.
Today, for example, we had to take up a debate and deal with the Airport and Airway Extension Act of 2010. Well, obviously, airports are important. We had to take up a debate and take a lot of time to have a recorded vote supporting the goals and ideals of National GEAR UP Day. I mean, some of these things that we took up are nice, worthy things, some of which are very helpful to people.
But how much more helpful would it be to give some certainty to the economy so people could have a real job before we get to Christmas? Give them a job. Give them the hope. But oh, no. We're too busy to give some certainty to the economy so people can start creating jobs again.
We had to take up a bill and debate it on expressing support for the designation of the month of October as National Work and Family Month. That's wonderful and that's fine, National Work and Family Month.
But how much better would it have been to have taken up the issue of the tax rates and made sure they would be stable on into the next year so that jobs would be created? Wouldn't that have been better than spending all this time debating and voting on the congratulations and how wonderful it is to have a National Work and Family Month? I mean, that's nice, but wouldn't it have been better to have actually created jobs and created work so that people could have money to spend on their families?
You know, we passed a bill that gave unemployment benefits for 99 weeks, for goodness sakes, which is expiring. It would have been better to say, You know what? It has been 26 weeks, and you haven't found a job because there isn't one in the area in which you're trained. So, rather than pay you to sit around the house for another year and a half--and I know people are hurting. I know. I understand--it would be better to say, So you didn't find a job in your area of expertise and training and experience in 26 weeks, over 6 months, so we're going to see that you get trained in an area where there are jobs so you'll have the expertise and training in an area where there are jobs so you don't have to sit around the house.
Because people get depressed. They lose their sense of self-worth and value when they don't have a job. Yet this government prefers to keep people as indentured servants and to keep having them reach out to the government for help because we refuse to incentivize people to reach their God-given potential. Instead, we lure them into ruts from which they cannot extricate themselves.
That's what we have done for 45 years with young, single women. Hey, you're bored with high school. I've had women tell me this in court.
We're bored with high school.
I've heard a defendant say it was her mother who said, Hey, just drop out. Have a baby. The government will send you a check.
What? This government is incentivizing people not to finish high school? I know that the Great Society legislation was born out of the best of intentions because there were deadbeat dads who were not helping, and they should have had to have paid a high price; but for goodness sakes, don't incentivize luring people into a rut.
These young women would come in before my court, charged in some cases with felony welfare fraud and others with drug dealing because they would find out, Well, gee. I can't live on this little check for one child who was born out of wedlock, so maybe I'll have another and another and another. Eventually, they are in a hole and they have no hope, and our government lured them into that.
I know there were good intentions, but good intentions are immoral when they deprive people of chance and opportunity and when they lure them into a hole they can't get out of. That is not a government function. That is not what we are to be about. Then there is all of this talk, over and over, about how are we going to pay the $700 billion it will cost if we keep the same tax rates into next year. Well, it flies in the face of the facts, and the facts are very clear.
I know we've heard a lot of opinion on this floor about, gosh, it will be a $700 billion loss. Why? Because that's the kind of thing the CBO says. Why? Because the CBO doesn't deal in the real world. They deal in an area of Keynesian economics where they are not allowed to look at the facts to make predictions for the future. How stupid is that that this body relies on a group like CBO, which has their hands tied, which can't look at history to determine the future?
So they're able to come out and say something ridiculous like, Gee, if you allow the wealthier people in America to have the same tax rate, it's going to cost the American treasury $700 billion. There is no evidence in our history that that has ever happened in reality, that when you have a lower tax that it actually costs revenue.
The fact is--this is when you get into the so-called ``Laffer curve'' that Art Laffer came up with, and it's amazing that some people, particularly MSNBC, cannot figure this out--if you tax zero, you will get zero revenue. It's pretty basic. If you tax 100 or 150 percent-- let's say 100 percent. If you tax every dime people make, then they're going to quit working. Why should they work when the government is going to take every dime and they don't get to keep any of it? Why would they work? They won't.
It's very clear. It's one of the reasons the Soviet Union fell.
So somewhere between zero percent tax and a hundred percent tax, you have a percentage that will maximize the return of the revenue to the Federal Government that the Federal Government can then use to carry out its government and its governmental functions.
So there is a point. It's ridiculous for somebody to say, so I guess at zero percent tax, we'll have all kinds of revenue coming in. That's ridiculous. What a bogus thing to say. It's between zero and a hundred. You find the point, and that was the point of the Laffer curve. You get to one point here where
you continue to tax beyond that, you discourage people working and making more money, then they have less money to go out and pay others to do things, like feed them at restaurants or clothe them or to buy a bigger, nicer house or to buy more cars, those kind of things. It stimulates the economy when people have more of their money and they can buy more, do more with their own money.
Of course you don't get more revenue at zero percent. But obviously as John F. Kennedy found when he cut taxes, and as Reagan found when he cut taxes, and despite the misinformation spewed on this floor, the fact is that when taxes have been cut, revenues go up--each time it's been done.
But we have such an ignorant way for CBO to operate. So for this political animal--and I know people say, oh, it's bipartisan. Baloney. CBO is not bipartisan. They can say what they want, but if CBO were really bipartisan, the facts wouldn't be as clear as they are about what CBO has done. They are quite partisan. And I know that Director Elmendorf was not happy when I previously pointed out how well they cooperated with the White House in misconstruing the cost of like ObamaCare after he was woodshedded at the White House, but sometimes the facts hurt and that one obviously did. Because whether CBO and the director realize it or not, they have done the President's bidding. They came in at 200, $250 billion under where they should have been if they had used their own ridiculous rules.
We need bills scored by groups that can look at history and look at reality. And CBO, the Joint Tax Commission, they need to be done away with. We could save money and have more accurate projections, more honorable, reliable projections if we hired that out to independent entities that are allowed to look at real world facts.
So here are some real world facts for all of my friends that are ignorant of the facts of what happens when you cut high tax rates and make them a bit lower. We know that in 2003, these were the tax rates that took effect that have been extended and that we're seeking to extend. Not tax cuts but just to extend the same rates. When those tax cuts were fully implemented after 2003 in which they occurred, we should begin to get some idea of what the real world facts are that CBO cannot rely on, because they're not a realistic entity because of the rules under which they operate.
So 2003, before the tax rates kicked in, those that were operating under the 2002 tax rates and rules, in 2003, the Federal Government took in $1,782,321,000,000 approximately; about $1.8 trillion. The following year the so-called Bush tax cuts had taken effect, so after the $1.782 trillion Federal revenue and the tax cuts went in, gee, did we lose $700 billion? No, we did not. Actually what happened is the Federal revenue climbed to $1.88 trillion. In '05, it jumped up again-- to $2.153 trillion. And the next year it jumped up yet again in '06--to $2.406 trillion. Massive gains and increases in Federal revenue after the tax cuts took effect. There is no reality in losing $700 billion when you continue these same tax rates.
But, boy, we will create disincentives for those who create jobs if we don't extend the tax rates across the board for everybody. And for those who are concerned that, gee, they should pay more, they'd be paying more if it was across the board a 10 percent income tax. But they're sure paying more when the lowest tax rate for the poorest Americans is 10 percent and the highest tax rate for the wealthiest is 35 percent. But when that shoots up about another 5 percent come January 1, there's not going to be the incentives to create new jobs. People are going to have to pull back in their horns because they're going to have 5 percent less money to deal with. Not the Warren Buffetts. They'll still have the accountants and lawyers to figure out how they can move income to different places, how they can take it at different times, how they can make it as part of something that is not taxable. All that will happen for the superwealthy. But there was a book I recall back in the nineties, I believe, about millionaires in America; and I recall reading that the most popular vehicle for millionaires in America to drive was not what one might think. Not a Lexus, not a Mercedes, not a really high-powered car. The most popular vehicle according to what I read for millionaires in America was a Ford F-150 truck. And yet friends across the aisle try to paint millionaires as being these mean-spirited people that just want to take all the money for the poor. They'd like to hang on to what they built in their lifetime and they paid taxes on, but these aren't the Warren Buffetts or the Bill Gates or the Michael Dells where they can adjust income the way they take it and avoid paying taxes at the same rate as people even in the lowest tax rate. These are people who build businesses from nothing and then along comes the Federal Government at the end of their life, and it will start again January 1, and the Federal Government says, ``You know what, you worked too hard, you saved too much, and we're going to take 55 percent of everything you saved.'' So for most of these small businesses that are built from scratch and most of the family farms that are built over generations as my great aunt and uncle did, over generations, the Federal Government comes in and says, you know what, like in the case of my great aunt, Lilly, you know what, you got 5,000 acres--I'm sorry, she had around 2,500 acres, valued originally at the time of her death at around $2,000 an acre, it was approximately a $5 million estate. And so we're going to take 55 percent of that, we'll give you an exclusion and take 55 percent of that. But within a year the values, because there was a lot of dumping of land around there, FDIC, dumping land, values fell six, $700, so the IRS took every single acre of that farm that took over a hundred years and generations to build. It is immoral. It is immoral for this body to say, you worked too hard, you saved too much, you accumulated things for your family, so we're going to take over half of it. That's outrageous. It needs to stop.
But the gavel was handed to the Democratic majority in January of '07, so we have to give some credit where credit's due, despite what my friend across the aisle said about Bush giving us $4 gas. Actually he was trying to do things like drill in areas that would have brought down the price of gasoline. Yet this administration and this majority, this majority beginning January of '07 began to take actions, it seemed like it was basically monthly, where we were putting more and more land off-limits to drilling, off-limits to production of minerals and oil and gas and things that people relied on to have lower gas prices.
So let's give credit where credit is due.
Then I heard on Greta Susteren's show, when she interviewed Donald Trump, he had the solution to creating more jobs in America. He said, What you have to do is create more jobs in America. He kept saying, What you've got to do is just create more jobs in America. It's like what comedian Steve Martin used to say, I'm going to write a book on how to have $10 million and not pay taxes. Okay, I'll tell you how it goes: First you get $10 million, and then you just don't pay taxes. I mean, to say the way to solve the problem is to create jobs, well, of course. But eventually she pinned him down and asked him, what specifically would you say to do? He said, I would put a 25 percent tariff or tax on everything that we buy from China and that will solve the problem. As smart as that man is and as well as he has done, obviously he hasn't spent his life in government service because unless you are able to figure out things I haven't that you can do legally, you don't make a lot of money. You know, $170,000 sounds like a lot, but not compared to what you could do. But 25 percent tax on everything we buy from China? He doesn't realize that triggers all kinds of penalty provisions of all kinds of treaties that we have? He doesn't realize what that would do in starting a trade war that we probably could not win? Shocking.
You want to get jobs going, the thing to do is to eliminate the 35 percent tariff on every American good produced by an American company in America. Get rid of the 35 percent tariff--because that's what a corporate tax is now, let's be real about it; it's a 35 percent tariff on every American corporate good that we sell. You cut 35 percent
off the price of American goods produced in America by American companies and they will be able to compete worldwide.
Madam Speaker, thank you for the time. I hope we will eliminate the 35 percent American tariff on American goods.