November 19, 1979
Page 33092
Mr. HARRY F. BYRD, JR. Mr. President, I thank the Senator from Maine for making that suggestion.
I cite this letter to show how complex this legislation is. We would really, I believe, be doing the public a disservice if we attempt in the Chamber of the Senate to rewrite a major part of the tax code. I think that the Finance Committee has a grave responsibility in this matter. As a member of the Finance Committee I certainly feel that way. I feel that way because, while I was not a conferee, the proposal in regard to the carryover basis was put on in the committee of conference at the 59th minute of the 11th hour, one might say, and virtually no one knew what was in the proposal. As it turned out it just has caused total turmoil — and I do not think that is too strong an expression — total turmoil throughout our Nation by those who have to administer or comply with the estate tax laws.
I am leaving out now entirely the merits or the demerits of the proposal. I contend that virtually everyone is adversely affected by the carryover basis provision, except those with eternal life. I have not run into many of those individuals. I guess maybe possibly there are some around but I happened not to have run into them. So when we deal with this issue we are dealing with something that affects virtually everyone.
I hope that we do not do what we did in 1976, attempt for a short period of time without any hearings to involve ourselves in trying to rewrite a most complex and difficult section of the tax laws.
Mr. MUSKIE. If the Senator will yield, what the Senator is clearly saying, as I understand him, is that his amendment today is simply the first step in a thorough review of the policy question involved, including whatever proposals that may come before his committee or subcommittee for rewriting or revising the policy that is involved. This is the first step. It is not the final step of what the Senator has in mind.
Mr. HARRY F. BYRD, JR. That is right. What this would do if it is approved by Congress is repeal the existing law. Then I would recommend and suggest that those who have legislation to deal with the subject submit that legislation in January; let us have hearings, as I have already committed myself to do, on it in March for 1 day, 2 days, a week, whatever length of time is necessary, to consider whatever legislation has been presented and give all the groups and all the individuals who have an interest in this an opportunity to present their viewpoint.
Congress does not have to accept the viewpoint, of course, of the various organizations. But I do believe that they should be given an opportunity to point out where in their judgment the flaws lie and why in their opinion it will not work, just as does this 65-page memorandum — and I must say I have not studied it — that I received as chairman of the subcommittee.
Mr. MUSKIE. I appreciate very much this opportunity to discuss the issue with my good friend from Virginia, and I hope that what we put into the RECORD may be helpful to our colleagues as we approach that review process which the Senator so correctly described.
Mr. HARRY F. BYRD, JR. I thank the distinguished and able Senator from Maine whom I regard as a very wonderful friend.
Mr. MUSKIE. I thank the Senator.
Mr. HARRY F. BYRD, JR. Mr. President, I ask unanimous consent that the name of the distinguished Senator from Oklahoma, the Presiding Officer, Mr. BOREN, be added as a cosponsor both of the original proposal and of this pending amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HARRY F. BYRD, JR. Mr. President, I yield to the able Senator from Iowa who has had such a keen interest in this matter for a long time. As I recall he campaigned extensively in Iowa just a little more than a year ago and from my conversations with him he found that the farmers and the small businessmen as well as those involved in estates and the legal profession are greatly disturbed by the carryover basis provision. I yield to the Senator from Iowa (Mr. JEPSEN) .
Mr. JEPSEN. I thank the Senator.
Mr. President, the Tax Reform Act of 1976 marked the high point in the drive for tax reform. While there are certainly innumerable aspects of the tax law which deserve reform and revision, the drive for tax reform which culminated in the Tax Reform Act of 1976 was really just a euphemism for soaking the rich. The goal of the reformers was quite simply to increase the tax burden on the "rich" so that taxes could be reduced for the poor. Since it was not feasible to. increase statutory tax rates on the rich it was decided to attack "loopholes," and thereby raise the effective rate of taxation on high incomes.
The fuel for this tax reform effort was the erroneous notion that many, or even most, people with high incomes, pay very little if any taxes. The logical corollary to this is that the poor are paying more than their share.
The true situation is quite different. According to the latest IRS figures those in the upper 50 percent of gross income classes, with incomes of $9,561 or more in 1976, paid 93.3 percent of all individual income taxes. Those in the top 25 percent of gross income paid 72.3 percent of income taxes. And those in the highest 10 percent of gross income paid 49.9 percent of all individual income taxes. By contrast, those in the lower half of gross income classes paid a mere 6.7 percent of total income taxes in 1976.