Opening Statement of W&M Oversight Panel Chair Houghton at Hearing on Tax Code

OPENING STATEMENT

[2] In trying to prepare his own return, he said, "This is too difficult for a mathematician. It takes a philosopher."

[3] These troubling words were spoken long before enactment of what is named the individual alternative minimum tax. The AMT is computed on Form 6251. It is a baffling calculation of adjustments and preferences.

[4] They were also spoken long before the notorious Schedule D. This schedule is used to calculate capital gains and losses -- a form which is 2 pages and 54 lines long. According to the IRS, it takes an average of 6 hours and 41 minutes to fill out schedule D. And it is required even if a taxpayer receives as little as $10 in capital gains income from a mutual fund.

[5] The whole process began many years ago with a simple Constitutional amendment. It consisted of 32 words: "The Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." Incidentally, the Revenue Act of 1913 which enacted the income tax was 15 pages long.

[6] This copy of the Internal Revenue Code is printed on tissue thin paper. It covers over 2,300 pages. The regulations springing from this particular code fill many volumes. The court cases would fill a library.

[7] As we all know, our tax system is unique. It relies on voluntary compliance with our tax laws. They must be intelligible. No one should have to skip a day of work to complete any tax return. Nor should 56 percent of taxpayers have to pay someone else to complete their returns.

[8] Two of my subcommittee colleagues, Mr. Coyne and Mr. Neal, have introduced bills to help simplify the tax code. Mr. Portman has introduced a bill to simplify the pension provisions of tax law. He also helped bring about enactment last year of key changes in the way we consider tax legislation, in order to help reduce complexity. Today I will be introducing a tax simplification bill as well.

[9] We have a great deal of talent and many good ideas springing from this subcommittee. Today's witnesses have some important thoughts to share with us as well. Before calling on the first witness, I would like to yield to our ranking Democrat, Mr. Coyne, for his opening statement.