Articles
Speech by Chairman Richard Neal Before the U.S. Chamber of Commerce Taxation Committee Meeting
Washington, DC,
November 7, 2007
November 7, 2007 Speech by Chairman Richard Neal Before the U.S. Chamber of Commerce Taxation Committee Meeting After 15 years of service on the Ways and Means Committee, I now find myself in the ranks of seniority. And with seniority, come perks. I am the Subcommittee Chairman of the Select Revenue Measures Subcommittee, which handles tax issues. This Subcommittee works by referral from the Chairman, so it helps that I have an excellent relationship with Chairman Rangel. And I intend to keep it that way. The Subcommittee has been extremely busy thus far this year, with a broad range of hot tax topics, such as energy incentives, housing credits, aviation taxes, and my favorite, the burden of the AMT. That issue will be shortly before the House. Just a few months ago, Ways and Means held a hearing that the Chairman referred to as the “Mother of All Tax hearings.” Four panels and 10 hours of debate on meaty tax issues, such as AMT, international tax, and some domestic business tax issues too. Shortly following, Chairman Rangel invited Secretary Paulson to come before the Committee, behind closed doors, and talk tax reform. The Secretary expressed his desire to cut the burden on businesses operating in America. Chairman Rangel took him at his word. And from that was born the Mother of All Tax Bills. Despite Chairman Rangel reaching out to Republican Members on our Committee and giving them a preview the day before the bill was filed, it was immediately denounced as a tax hike. Rather than accepting this invitation to begin a conversation about tax reform, it was panned by their spin-meisters within minutes of the briefing. The German author Johann Goethe wrote that, “Daring ideas are like chessmen moved forward; they may be beaten, but they may start a winning game.” I find these words instructive and I hope you will too. We can’t just have a knee-jerk, theological reaction against a bill that cuts taxes on some and raises taxes on others. We have to look at the whole and see the end game, as Goethe warned. If we want to accomplish fundamental tax reform, we have to let go of concepts such as tax cuts paying for themselves. We have to be realistic and responsible about our budget. Just last week, CBO told Congress that even if U.S. troop levels in Iraq and Afghanistan are reduced by more than two-thirds from the average numbers, the cost to the taxpayers of those conflicts could reach $2.4 trillion in 10 years. This includes military expenditures, spending on veterans (of which there are now 30,000 wounded), and interest on the debt. All of our war expenditures are deemed emergency spending and, thus, not subject to offsets. As much as we gripe about pay-go, it is a responsible position. The more we dig into debt with this war, the more difficult each tax bill becomes.
We all love cutting taxes. We all loathe raising them. But it is our responsibility to do both and it is why the Democrats emerged from the 1990’s with a pretty good track record. As you know, the “Mother” bill contains a revenue neutral repeal of AMT, something that I have sought for the last decade. It provides tax cuts to 90 million Americans and asks only one million taxpayers to pay a little more. It contains a major reduction in the corporate rate along with revenue raisers from the same sector. I expect the Committee to hold a series of hearings on these ideas and many of you will be invited to share your thoughts as will the Members of the Committee. I assure you, as someone who represents a state well-represented by health care, financial services, and manufacturing, I do not want to see any tax reform that does not, on balance, improve their outlook. In the meantime, however, this week we will proceed with a $50 billion “patch” to AMT, plus extension of some popular expiring items. We are fully aware of the mid-November deadline at the IRS to get the filing season underway. As you know, when the Republicans were in charge, the R&D credit lapsed for almost all of 2006 before being retroactively extended. Companies rightly complained that even though the credit extension reached back, companies were harmed. This Congress simply must do better for individuals and business taxpayers. Let me conclude by talking about trade issues. Today, we take up the Peru Free Trade Agreement, and I believe it will pass the House with a comfortable margin. Already, a number of senior Democrats who said they had never supported a free trade agreement have announced support for this one. Passage of a more effective Trade Adjustment Assistance program was important for many of us in the House. This is an opportunity for this Democratic majority to voice its support for free trade. And hopefully, more opportunities will come. I am happy to take your questions.
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