Time is ripe for tax reform and transparency

Today, U.S. Representative Mike Quigley (IL-05) spoke of the need of tax reform and transparency.

Below is a video and a transcript of this speech:

Speaker: The chair recognizes a gentleman from Illinois, Mr. Quigley, for five minutes.

Congressman Quigley: Thank you Mister Speaker.

Mister Speaker, I rise today to urge my colleagues to come together and improve our broken, misguided, and convoluted tax system. The time is ripe for tax reform. We currently spend almost 1 trillion dollars through the tax code each year “ all of which is off budget “ meaning it is not scrutinized each year by appropriators.

Once a tax break is written into the tax code, it usually remains, unlike discretionary spending programs which are reexamined for their necessity each year. To put this in perspective, 1 trillion dollars would be the single largest government spending program. Larger than the Pentagon's budget, larger than Social Security, and larger than Medicare or Medicaid.

As we desperately search for ways to reduce the deficit, we are making deep and painful cuts to discretionary spending. All the while, we are spending close to 1 trillion dollars through the tax code with little oversight.

I have introduced a bipartisan bill with Congressman Renacci, which would bring greater transparency and oversight to tax expenditures. But in addition to greater oversight, we also need reform.

While many of these tax expenditures incentivize worthwhile behavior, such as homeownership and increased savings and investment, there are others, such as the yacht interest deduction, which clearly need to be reconsidered.

We are cutting funding for the National Institutes of Health, head start, and meals on wheels, while subsidizing yachts. Lets put this into perspective. If one of my constituents takes out a loan to buy a car, to get to work or take the kids to school, the interest on that loan is not tax deductable. But if they were to buy yacht, the interest on that loan, would be tax deductable.

Clearly it's time to reexamine our tax code and get our priorities in order. I have a bill that would end this tax break for yachts. But rather than tackling these tax breaks individually, we need a wholesale rewrite of the tax code.

Our tax code is the product of years of small tweaks and layers of changes. We need to step back and ask ourselves: If we were start all over and rewrite the tax code today, what would it look like? With such limited resources, what do we need? What behavior should we be incentivizing?

Due in part to these years of additions and changes, our current tax code is deeply recessive. According to a report released last week by the Congressional Budget Office, the richest 20 percent of households in America receive over 50 percent of the tax breaks. The top 1 percent benefited the most, receiving approximately 17 percent of all funds flowing from tax breaks.

It's time for a reexamination of our tax code, who benefits from it, how much we spend, and where our priorities lie.

Not only is the time ripe for reform because of our fiscal situation, but at a time of frequent partisan gridlock, tax reform is one area where the two sides agree. Members from both sides of the aisle have said tax reform is essential.

I commend Chairman Camp and his counterpart in the Senate, Chairman Baucus, for their efforts to reform our tax code. I hope they will continue their bipartisan work, and give the two houses a package of reforms we can live with.

I have no illusion this will be simple, or that everyone will like everything in the package, but that's the beauty of democracy. We don't have to agree on everything, but everyone's voice has to be heard, we have to compromise, and in the end we vote. I hope we get to vote on a tax reform package that is big, bipartisan, and balanced - and soon because reforming our tax code could save us billions, lower tax rates, and help reduce our deficit.

As we sit down to address our fiscal woes, everything has to be on the table, including the trillion dollars we spend each year in tax expenditures.

Thank you Mr. Speaker and I yield back.

Speaker: The gentleman yields back.