December 6, 1979
Page 34954
Mr. LONG. I yield myself such time as I require.
Mr. President, there are reasons why the deduction for the State gasoline tax should have been repealed, and they remain as good now as they were previously when Congress acted to repeal it.
In the first place, the repeal provides for simplification of the tax code. Everybody has State gasoline tax expenses. But when you simply adjust the general tax rates, knowing you have to raise a certain amount of revenue from all the taxpayers, leaving the deduction puts them to needless bookkeeping expense to arrive at the same amount of tax. In other words, you can draw your tax bills one of two ways. You can provide a great deal of deductions, which require a great deal more bookkeeping and a great deal more itemization, and then have a higher tax rate on the amount of income left to be taxed; or you can provide less tax deductions and have a lower tax rate.
By having less tax deductions, you have a simplified tax law, less bookkeeping in filling out one's tax return, and paying whatever one owes Uncle Sam.
Reinstating the deduction would require additional bookkeeping for every taxpayer who itemizes. The proposed deduction would not benefit the great majority of taxpayers who do not itemize. Rather than moving toward making more people itemize on their tax returns, we should be moving toward simplification, making less people itemize, and generally reducing the rates.
In terms of energy conservation, there is no reason to have a special tax advantage to encourage people to use more energy. Insofar as it encourages them to expend more energy, it is a move in the wrong direction.
We have had thoughtful editorials in newspapers such as the Washington Post and the New York Times, saying that we should have a high tax on gasoline so that people will be discouraged from using more energy, rather than encouraging them to use it by a policy of trying to keep the price low in the United States. There is logic in that.
In fact, I am told that the administration is thinking about suggesting to us that we put a 50-cent tax on gasoline and use that tax to reduce other taxes, such as health insurance taxes or some of the social security taxes people would pay otherwise, so as to discourage the use of energy in a way that would not cause any increased burden on the taxpayer when you look at his overall tax burdens.
Furthermore, if this amendment were agreed to, it would cost $1.2 billion in the first year, but it would reduce the revenue in this bill by $34 billion. Senators who feel that we have put too much tax on the oil industry already should take into consideration that if this amendment is agreed to and we reduce the revenue in this bill by another $34 billion, that will put a great deal more pressure on the House conferees to insist that the taxes on this industry be made much higher in conference than the House would insist on otherwise.
So if one feels kindly toward the energy producers and wants to encourage them, he should vote against this amendment; because it would set the stage for the House to insist that we either make back this $34 billion, or a substantial portion of it, by putting on more taxes, or more than the House would have insisted on otherwise.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. LONG. I yield for a question.
Mr. MUSKIE. I appreciate the comments made by the distinguished Senator from Louisiana, and I associate myself with them.
I ask the Senator this question: He mentioned the proposal that is floating around, to add a 50-cent gasoline tax for conservation purposes as well as associated revenue purposes. What would be the loss in revenue if this amendment were to become law and that gasoline tax would be voted?
Mr. LONG. Under this proposal, we would lose $1.2 billion a year, at first, I assume that in the average year, in full operation, it would cost us $3.5 billion, because over a 10-year period, it would cause us to lose $34 billion.
Mr. MUSKIE. And that is with the tax rate at what figure?
Mr. LONG. That would be like about a 3½ cent tax on a gallon of gasoline.
Mr. MUSKIE. So if the gasoline tax went up 50 cents, the 10-year loss in revenues would be astronomical.
Mr. LONG. We are talking about a deduction. This amendment proposes simply to provide a deduction against the income tax what one has paid in gasoline taxes to the State government.
Mr. MUSKIE. I see. All right.
Mr. LONG. But in any event, Mr. President, we hope that next year we can postpone or call off or find some way not to have the big social security tax increase go into effect in 1981. This would make it more difficult to do that. We are committed to try to have a balanced budget. This would make it more difficult to do that. We would like to consider a tax cut for people in all walks of life, an income tax cut, and we would like to try to do something to encourage capital investment. This would make it more difficult to do that.
If this is to be considered, Mr. President, at a minimum it should be considered in connection with some revenue measure next year and not added on this bill at the last moment. As I say, this could only lead to a determination on the part of the House conferees to insist on even higher taxes on energy producers than the House of Representatives would otherwise hold out and require and insist on when we go to conference and try to settle our differences on this bill.
So for those reasons, Mr. President, I hope the amendment will not be agreed to.