December 7, 1979
Page 35065
Mr. MUSKIE. Mr. President, I yield myself 3 minutes.
Early in this debate, Mr. President, I outlined for the Senate the budget implications of the pending bill, as it was reported out of the Committee on Finance. If Senators will recall the charts which I presented at that time, the implications of the bill, as reported, were that we would have a persistent and large deficit through the 1980's, contrary to the budget plan which we adopted in the spring of this year and reaffirmed only a couple of weeks ago.
Mr. President, that Finance Committee bill would have yielded $139 billion. We promptly reduced that by $10 billion to $129 billion. We have since added two increments of revenue to it: $22.5 billion as a result of the adoption of the Bradley-Chafee amendment, and $4.5 billion as a result of the adoption of the Moynihan-Wallop amendment. So we now stand at $155 billion.
Mr. President, the present amendment would cost us, over that decade, $34 billion. That would reduce the net yield of this bill, then, to $121 billion, $18 billion below the bill as it was reported out from the Finance Committee.
Under what pretext, Mr. President? Under the pretext that we would be restoring a tax benefit that we had taken from taxpayers a few years ago in the 1978 Revenue Act.
What are the facts, Mr. President? The fact is that the deductibility of State gasoline taxes was eliminated in the 1978 law in the name of simplifying tax returns. But the value of that tax deduction was restored in the same bill by reducing income taxes for low- and middle-income people, for whom this benefit was intended. So the taxpayers did not lose the tax value of the deductibility at that point; it was preserved, but in another form. Now we would return the tax value of that deductibility on top of the tax adjustment that was made to the 1978 bill, and at a cost to the budget in the next 10 years of $34 billion.
The PRESIDING OFFICER. The Senator's 3 minutes have expired.
Mr. MUSKIE. Mr. President, I yield myself 1 more minute.
We are here on the floor in the name of raising revenues for purposes, which Members consider in the public interest. And here we cannot resist the temptation, Mr. President, we cannot seem to resist the temptation to cut those very revenues out from under our ability to deal with the public needs of this country for the next 10 years.
This is the biggest cut offered yet and has had a very close vote; $34 billion. Mr. President, if we adopt this, we start back where we were when the bill came out of the Committee on Finance.
I urge my colleagues to reject this and other deficit-generating amendments.
Mr. HELMS. Mr. President, who is in charge of the time on the other side?
Mr. DOLE. I yield to the Senator.
Mr. HELMS. I thank the Senator from Kansas.
Mr. President, my friend from Maine knows of my respect and affection for him. But I fear that he has fallen into the syndrome that is prevalent among people in public office today, a syndrome which contends that all the money belongs to the Federal Government and that we, the masters in Washington, will decide how much we are going to let the people keep.
My friend used the words "this amendment will cost us." Then he indicated that this amendment is offered under "the pretext that we" — meaning Congress — "had taken away a tax deduction."
It is not a pretext. It is an absolute fact. That is precisely what was done, and it was done under a parliamentary situation for which there was no remedy. Senators know that.
Then my friend from Maine said we should make no mistake about it, that this amendment will be approved "at a cost to the budget ."
The position of the Senator from North Carolina in urging Senators to restore some equity to the taxpayers of this country — and I am talking about the middle-income taxpayers — is very simple. They deserve to have some relief, and this may be the only relief they are going to get.
On the other hand, the Senate and the House of Representatives vote pellmell to raise Federal spending. Look at the Federal debt today — in excess of $800 billion, and the forecast is that if the trend of Federal spending continues, by 1985 it will be $1.3 trillion; and the interest on that debt is going to cost the taxpayers more than $100 billion.
I think we should bear in mind that a gentleman named Lyndon Baines Johnson was President of the United States at the time the Federal budget exceeded $100 billion for the first time in history, and that was about 15 or 16 years ago.
So the moving finger writes. We know what we are doing. This amendment simply pleads for a bit of equity for the middle-income taxpayer.
Mr. President, I made my remarks last night, but in order that they can be in context again, I ask unanimous consent that my statement on this amendment, as delivered on the floor last evening — page S. 17959 — be printed in the RECORD at this point.
There being no objection, the statement was ordered to be printed in the RECORD, as follows:
Mr. HELMS. Mr. President, this amendment would restore the itemized deduction for State and local non-business gasoline and motor fuel taxes. This deduction was deleted from the Tax Code by the Revenue Act of 1978, which was enacted into law during the frenzy of the final hours of the 95th Congress. The language of my amendment is identical to that of S. 79 which was introduced at the beginning of this session. Cosponsors of S. 79 include Senators Dole, Hatch, Tower, Melcher, Riegle, Ford, Stevens, Schmitt, Garn, Humphrey, Stone, and Morgan.
We believe that Congress should restore the deduction for the following reasons:
First. The absence of this reduction will be felt most severely by middle-income taxpayers.
Second. Its elimination will help undermine the incentive for taxpayers to make use of itemized deductions.
Third. Its re-enactment will have no perceptible effect on energy consumption.
Fourth. It was deleted without adequate deliberation by Congress.
Beginning this year, individuals who itemize will no longer be allowed to deduct State and local excise taxes imposed on gasoline, diesel, and other motor fuels which are not used for business purposes. If Congress fails to restore this deduction, the middle-income taxpayer will bear the greatest burden in additional taxes. According to US. Treasury Department figures, over 70 percent of the revenue raised from the repeal of this deduction will come from taxpayers making less than $30,000 a year. In 1983 alone, the elimination of this deduction will, according to the Treasury, take an additional $2.2 billion from the pockets of the American taxpayer who must also face spiraling prices.
Concern about the conservation of energy and the reduction of oil imports has been one argument advanced to support the deletion of the gasoline deduction. In our opinion, the elimination of this deduction will have little effect in assisting our Nation achieve its energy goals. Instead, it will create an unfair tax burden not just for taxpayers in western and rural States who must drive greater distances, but also for suburban commuters who must drive their automobiles to work.
We promised our constituents a tax cut and then turned right around and deleted a meaningful deduction. We disguise our actions by claiming that it will somehow help cure our energy crisis.
If this measure is designed to save fuel, how can Congress allow business to maintain its fuel deductions? Or will business be next?
When the elimination of this deduction was considered by the Finance Committee last fall, it was added to the tax bill during the final hours of markup. When the tax bill reached the floor of the Senate, an amendment to restore the deduction was ruled "out of order" because it would have lowered projected revenues below the legal limit set by the budget resolution.. The Senate, as a whole, was not allowed to vote on the measure. Because of this parliamentary technicality, the Finance Committee's supposed "recommendation" became law without adequate review by the Senate.
In 1977, an amendment to delete this deduction was soundly defeated by a vote of 65 to 12. We believe the outcome last session would have been much the same — had the Senate been allowed to vote. H.R. 3919 presents a convenient opportunity to reinstate the deduction (to take effect in 1981), and I urge support for the amendment.
Mr. DOLE. Mr. President, I understand that the last vote was 82 to 1, which means 17 Members were not present on that vote. I assume that we could take last night's vote and take the number of absentees and figure out that probably the motion to table would be agreed to. However, I understand that the Senator from North Carolina has a number of other amendments, addressing the same problem, on which we will be voting next week.
Mr. HELMS. I think we should vote a number of times on this question because I feel that strongly about it, I say to the Senator.
Mr. DOLE. As the Senator said last night, most of the benefits go to the working people of this country, those who earn between $15,000 and $30,000 or $40,000. To get $34 billion must be stretching everything. I do not understand how we start out with the first-year cost of $1.2 billion and end up with $34 billion for the cost of this amendment, over a 10-year period.
It must be considering a lot of things that the Senator from Kansas is not aware of — that everybody will suddenly itemize their deductions, I suppose. If that were the case, maybe it could add up to $34 billion. I hope the motion to table will be defeated.
I yield the remainder of my time to the Senator from Alabama (Mr. HEFLIN) .
Mr. HEFLIN. Mr. President, I want to put myself on record today as supporting the amendment offered by the Senator from North Carolina (Mr. HELMS) which would restore the tax deduction for State and local taxes on gasoline, diesel fuel, and other motor fuels.
Mr. President, the American public probably today is not even aware of the fact that the Congress acted last year to take this deduction away from them. This will be the first year that the average American taxpayer will not be able to deduct these State and local taxes and until the general public begins to fill out its tax returns after the first of the year, I am afraid most of them will not realize that the law has been changed. I think when the middle-income American taxpayer learns that Congress has in effect raised his taxes by disallowing this deduction, there will be a hue and cry throughout the country that will reverberate into these halls.
Mr. President, as I understand it, this deduction was deleted from the Tax Code by the Revenue Act of 1978. I was not a Member of this august body at that time; but had I been here, I would have done everything within my power to make sure that this deduction was not taken away from the American taxpayers. In my judgment, the deduction is well justified, and its removal by Congress was, in effect, a tax increase placed upon the American taxpayers in an indirect fashion.
Mr. President, the business community of this country is allowed to deduct almost every conceivable expense as an ordinary and necessary business expense; but the working man of this country, who is often forced to commute to and from work over long distances every day, is not allowed to deduct the expense of operating his automobile to commute back and forth. I think that perhaps we should consider putting the working man on a more even par with the business community in this situation so that our tax laws will be seen by the average working man and woman as being more fair and equitable. This amendment represents a step in the right direction, since it would at least allow the working man who must drive long distances to and from work every day the opportunity to deduct the gasoline taxes he is required to pay in order to earn his livelihood.
In my judgment, the restoration of this tax deduction will be neutral so far as fuel consumption is concerned. It merely places the law back like it was before the ill-advised action of Congress last year.
Mr. President, I have stated over and over on the floor of the Senate that the American taxpayers deserve a break. Americans have always believed in a fair and equitable tax system, and they do not mind paying reasonable taxes so long as they are called upon to only pay their fair share.
What American taxpayers object to are paying taxes which are disproportionate and then seeing their tax dollars wasted by the government. I think this tax deduction is fair and equitable, and I urge the Members to support this amendment.
The PRESIDING OFFICER. The time of the Senator from North Carolina has expired.
Mr. BENTSEN. Mr. President, will the Senator yield me a minute and a half?
Mr. MUSKIE. I yield.
Mr. BENTSEN. Mr. President, I can understand the Senator from Alabama saying what he has said, but let me describe what happened and how we worked this out in the Finance Committee.
We did this by taking this in consideration as we increased the tax brackets, and we particularly did that with respect to middle-income people. We did it to try to bring about simplification in the tax law. We had our charts, our tables, to see just how much they were getting by itemization on the gasoline tax and the deduction for it. So we gave consideration for that and some other measures, as we widened the tax bracket to try to go at least part way in making them whole.
There was simplification and trying to see that we gave equity, so that they do not pay more in taxes and do not spend as much time on those tax returns.
In addition, we had another problem, in that, obviously, many people were guessing as to how much mileage they had traveled. We finally had numbers coming together that had to be, in their totality, more than people could possibly have driven. That is the sort of thing we were catching in the tax returns.
So it was not taking something away from them. We balanced it off. This was not taking a deduction away. We included that in the tax bracket.
Mr. MUSKIE. Mr. President, I yield the remainder of my time to the majority leader.
The PRESIDING OFFICER. The Senator from West Virginia, the majority leader, is recognized.
Mr. ROBERT C. BYRD. Mr. President, I will offer a motion to table, shortly. I hope the motion to table will be adopted.
This is a measure which should not be adopted in a precipitous fashion on a bill that is designed to deal with the phenomenon of excess oil company profits. The bill before us is part of comprehensive approach to this Nation's energy problems. It is not and should not become a Christmas tree or a general revenue bill. We must concentrate our efforts on devising a windfall profit tax bill that produces energy while using some of the unjustified profits that will accrue to the oil companies as a result of decontrol and skyrocketing oil prices for the greater public good.
This is not the time or the place to serve special interests.
There has been much discussion in the past few days about energy conservation. Restoration of the itemized deduction for State and local gasoline taxes would only encourage people to drive more and to use more energy. It is becoming apparent that we may soon be required to consider a higher Federal tax on gasoline as a means of achieving the level of conservation that may be required of all our citizens. Who knows? This type of special tax advantage which would only encourage energy use is inappropriate in this climate.
The experts from the Finance Committee and the Budget Committee have indicated that adoption of the Helms amendment would cause a revenue loss of something like $34 billion over the next 10 years. While this amendment is not directly related to the windfall profit tax, we must remain cognizant of the urgent need to pass a fair and meaningful bill. The drain on revenues which would result from the Helms amendment cannot be justified as we work to achieve the proper balance on the windfall tax bill.
Mr. President, I move to table the motion — I withhold that.
Mr. HELMS. Mr. President, will the Senator yield?
Mr. ROBERT C. BYRD. Yes. I withhold.
Mr. HELMS. I do not have time remaining. May I ask unanimous consent for 1 additional minute to ask a question of the distinguished Senator from Maine?
Mr. ROBERT C. BYRD. Yes, with the understanding again that I be recognized to make a motion to table.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from North Carolina is recognized.
Mr. HELMS. I thank the Senator from West Virginia and I thank the Chair.
I just ask the Senator from Maine if in the interest of time — I do not want him to answer this orally — but would he put in the RECORD how he arrived at the $34 billion figure?
Mr. MUSKIE. Yes. May I say, first of all, that the table was produced by the Finance Committee staff and the joint committee which makes these estimates and was reconfirmed by the Budget Committee. We shall be glad to put the analysis in the RECORD.
Mr. HELMS. I thank the Senator.
I yield back the remainder of my time.
Mr. ROBERT C. BYRD. Mr. President, of course, as I said, I cannot yield the floor to other Senators, but I intend to make a motion to table at this time. If there be no objection, I yield to Mr. BENTSEN to make that motion. I can make the motion and would be glad to, but I yield to him if there is no objection for that purpose. And I so ask unanimous consent.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BENTSEN. Mr. President, I move to table the motion.
The PRESIDING OFFICER. The question is on agreeing to the motion to lay on the table the motion to reconsider the vote by which the amendment of the Senator from North Carolina was rejected.
Mr. HELMS. Mr. President, I call for the yeas and nays. .
The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
The result was announced — yeas 44, nays 42, as follows:
[Roll call vote tally omitted]