Alternative Minimum Tax Relief Act of 2008
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Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
Today's bill, Mr. Speaker, represents a clear difference between the two parties in the House when it comes to tax policy. Republicans believe that Congress should not raise taxes on one group of taxpayers in order to prevent a tax increase on another set of taxpayers. To say that another way, we don't believe we ought to have to raise taxes to preserve something that's already in the Tax Code.
Now, we are certainly for continuing to patch the alternative minimum tax. That's been the practice for the last several years. The President, in his budget for the last several years, has had an AMT patch in his budget without increasing taxes on somebody else. So we are certainly for that. But we are not for imposing a tax increase in a like amount on another set of taxpayers. That just doesn't make sense to us.
Without this patch, another 21 million families would come under the AMT, and their average tax increase would be about $2,400 per taxpayer. So we certainly want to prevent that. But in 2007, we had the patch in place; so we did not collect the AMT revenue from those 21 million taxpayers. And yet we collected, last year, in revenues to the Federal Government, about 18.7, 18.8 percent of gross domestic product. The historic average of revenues coming into the Federal Government for the last 40 years has been about 18.3 percent of GDP. So last year with the AMT patch in place, those 21 million taxpayers protected from the AMT, we brought in substantially more in revenues to the Federal Government than we have historically.
So why, then, should we be so intent on increasing taxes to prevent those 21 million taxpayers from paying $2,400 apiece more in taxes in 2008? The only explanation is somebody just wants to get more revenue into the Federal Government. Now, they may say, well, we want to do that because the deficit is really high and we want to get the deficit down. Well, I wonder, if we took a poll across America, how many Americans would say, ``Yes, I want to get the deficit down and I want to do it by raising taxes'' and how many Americans would say, ``Yes, I want to get the deficit down, but I want to do it by controlling spending''? My guess is more Americans would say, ``I want to get the deficit down by controlling spending.'' But the PAYGO rules that are in effect, while they give us the opportunity to reduce spending to ``pay for'' all of these things, not once have we seen a cut in spending being offered by the majority to pay for any of these items. It's always a tax increase.
So, yes, if you want to get the deficit down to zero, you can do it by increasing taxes, and under the PAYGO baseline, if we were to follow it, we would continue to increase the take of the Federal Government from American taxpayers until at the end of a 10-year window we'd be taking in 20.5 percent of GDP, an historic high, or pretty close to an historic high, and certainly only a couple times in our Nation's history have we even approached that level of revenues coming into the Federal Government.
Now, I think it's a legitimate question as to what is the appropriate level of GDP that we should bring in to the Federal Government, and Chairman Rangel alluded to that in his statement by saying that, I believe he said, the President hasn't offered a tax reform plan. That's true, I guess, he hasn't. But you know what? Under the Constitution, the President can't even introduce a bill, much less pass one. That's the job of the Congress.
So if we want to do tax reform, which I think is appropriate, we ought to have this discussion about what is the appropriate level of revenue that we should bring in? What is the appropriate take of the Federal Government of everything that Americans make? Is it 18.3 percent, the historic average? Is it 18.7 percent, what we took in last year? Or is it 20.5 percent? I don't know what the magic number is, but that's a legitimate debate, and we ought to have that debate in the context of writing a new tax system for the United States that is more modern, more efficient, and more competitive. So I hope that the chairman will, in his constitutional prerogative as the chairman of the Ways and Means Committee, undertake that task, have that debate, so that we can solve this problem once and for all of the AMT, the complexity of the code, and the continuing diminution of competitiveness that we enjoy with our tax system, vis-a-vis our competitors around the world.
This bill employs some pay-fors, some tax increases, that I believe would be onerous and would add to the lack of competitiveness in our Tax Code. For example, there is a provision that would, for the first time, ignore tax treaties that we have entered into in good faith with other countries around the world and would impose upon companies doing business, foreign companies doing business, through a United States subsidiary in this country, creating jobs in this country, a 30 percent tax, despite the fact that we have a tax treaty that says that company would get a deduction for that income and would not have to pay that 30 percent tax because they'd be paying taxes in the country where we have a tax treaty.
Now, yes, they say, well, but the ultimate parent is somewhere where there's not a tax treaty, but that still violates the spirit of the tax treaty that we have with the country where the immediate parent of the United States subsidiary resides. That change in our Tax Code would discourage at the margin that capital from coming to this country, being invested in this country, and creating jobs in this country.
Those companies that I'm talking about employ a substantial number of Americans; 5.3 million Americans are employed by those kinds of companies. Do we want to jeopardize those jobs? And 19 percent of all United States exports, helping us a little bit to get the balance of trade going our way, 19 percent of all exports come from companies like that. And just last year they reinvested nearly $71 billion back into their United States operations. That's capital, that's investment that we should want here and not discourage through tax changes like the one in this bill.
So, Mr. Speaker, I would say to the Members of this body that we ought to reject the majority's offering that they put forward today to save 21 million taxpayers from coming under the AMT because they would impose a like amount of tax increase on another set of taxpayers. Let's not increase taxes on any set of taxpayers, certainly not in this fragile economy.
We will later offer a motion to recommit that corrects the error, that strips the bill of the pay-fors, and it would allow this body to vote on a clean AMT patch to save those 21 million taxpayers from the increased tax burden but not increase taxes on somebody else.
With that, Mr. Speaker, I yield back the balance of my time.
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MOTION TO RECOMMIT OFFERED BY MR. MCCRERY
Mr. McCRERY. Mr. Speaker, I have a motion to recommit at the desk.
The SPEAKER pro tempore. Is the gentleman opposed to the bill?
Mr. McCRERY. I am opposed to the bill in its current form.
The SPEAKER pro tempore. The Clerk will report the motion to recommit.
The Clerk read as follows:
Mr. McCrery of Louisiana moves to recommit the bill H.R. 6275 to the Committee on Ways and Means with instructions to report the same back to the House promptly in the form to which perfected at the time of this motion, with the following amendments:
Page 4, after line 5, add the following new section:
SEC. 103. CHARITABLE MILEAGE RATE TREATED THE SAME AS MEDICAL AND MOVING RATE.
(a) In General.--Subsection (i) of section 170 (relating to standard mileage rate for use of passenger automobile) is amended by striking ``14 cents per mile'' and inserting ``the rate determined for purposes of sections 213 and 217''.
(b) Effective Date.--The amendment made by paragraph (1) shall apply to miles driven on or after July 1, 2008.
Page 4, strike line 6 and all that follows through line 2 on page 37 (all of title II).
Mr. McCRERY (during the reading). Mr. Speaker, I ask unanimous consent that the motion be considered as read.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from Louisiana?
There was no objection.
The SPEAKER pro tempore. The gentleman is recognized for 5 minutes.
Mr. McCRERY. Thank you, Mr. Speaker.
The majority's use of PAYGO has really twisted the logic of this bumper-sticker-turned-budget-tool into a pretzel. In the last 2 weeks, when PAYGO stood in the way of more government spending, it was ignored or openly waived. But, today, the majority insists on new permanent tax increases in exchange for a 1-year extension of needed tax relief. That is not a good deal for anybody--a permanent tax increase to pay for a temporary tax relief.
The motion that we have before us would save us from that fate. It would remove the tax increases in the bill, including the particularly misguided higher taxes on energy production that would discourage production here at home, that would further increase our energy insecurity, that would reduce our energy supplies, and that would increase prices.
Is that what we want to do? Do we want to increase the price of gasoline? That is what the effect of this would be. This is a tax increase on oil and gas companies--the companies that produce the oil, the gasoline that we buy. Do we think that, if we increase taxes on them, they are just going to absorb that? Of course not. They will pass it through to the consumer, which will mean higher gasoline prices.
This is a terribly misguided part of this bill. The motion to recommit would get rid of that ill-advised tax increase. So we get rid of all the pay-fors in the bill. That's the first thing that the motion to recommit does.
The second thing we do is we do provide some relief in this bill from high gasoline prices to volunteers who use their vehicles to help charities carry out their work. A lot of charities are telling us that they are losing volunteers because of the high price of gasoline.
Now, the IRS has some authority to modify the tax deduction that people can get from using gasoline in certain situations. So the IRS did, this week in fact, implement a midyear increase in the standard mileage deduction rates, increasing to 58 1/2 cents the allowable deduction for expenses incurred in operating a vehicle while carrying on a trade or business, and raising to 27 cents per mile the deduction for gasoline costs associated with transportation primarily for and essential to receiving medical care and for travel while moving.
But the IRS could not raise the deduction that can be claimed by individuals who use their car for charitable purposes, such as for delivering Meals on Wheels. That has to be done legislatively. So our motion to recommit would do just that. We would set the allowable deduction for gasoline expenses for charitable purposes at the same rate for medical care and for travel while moving, 27 cents per mile.
Meals on Wheels is one of those charities that has told us that they are losing volunteers because of gas prices. Nearly half indicated that increases in gas prices had forced them to eliminate meal delivery routes or to consolidate their meal services.
Mr. Speaker, these high gasoline prices are, in fact, having a very deleterious effect on charities and on Meals on Wheels in particular. I won't go into some of the details that we have been given by Meals on Wheels about the state of some of our seniors, but needless to say, it's not a pretty picture.
So this would give those charities some relief, Mr. Speaker, and it would allow them, we think, to get some of those volunteers back in active service to relieve some of these problems that we have.
So, Mr. Speaker, our motion to recommit does two things. It takes out the tax increases in this bill, leaving in place the AMT patch to give tax relief to those taxpayers who would otherwise be subjected to a $2,400-apiece increase in taxes, and number two, it increases the deduction, the mileage deduction, for vehicle use for charitable purposes.
Mr. Speaker, I urge its adoption.
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