Letter to Congressman Randy Forbes

Congressman Forbes,

In regard to tax reform, I'd like to add the following suggestions:

• Lower the corporate tax rate.  Companies (especially large corporations) are going off-shore to corporation friendly nations in order to avoid our elevated tax rates.  This is literally robbing the American people of the benefits of our own prosperity.  I'm sure you're aware of the report done by 60 Minutes on this very subject so I won't go into all the details.  Lowering the corporate tax rate would bring those revenues back where they belong.  Of course everyone should pay their fair share but our tax laws have been manipulated to give the appearance of "taxing the fat cats" but those cats didn't get fat by being dumb.  Lower their taxes in this country and they'll bring their headquarters and tax revenues back.

• Pass legislation that requires companies that do business here to pay taxes here.  I, as an employee of any company, have to pay taxes in every state that has an income tax if I work there.  I won't belabor the details here either.  Simply put, companies, of any size and no matter the location of their corporate headquarters, should be required to pay corporate taxes to the U.S. government if they do business in this country.  It is an insult, a travesty that a huge corporation can earn billions of dollars off the American people and maintain an office in Switzerland staffed with a receptionist and call that their headquarters in order to avoid paying taxes.  But I don't blame them.  It's our own government that made this possible and allows it to continue.  We will never know the untold trillions of lost tax revenue due to this lapse.  If I, as an individual, were caught moving my money off-shore to avoid paying taxes, I'd be arrested and convicted of tax evasion.  I was actually audited by the IRS after taking a perfectly legal business deduction which was misinterpreted by the auditor.  I had to spend a lot of time and do a lot of research in order to prove to a government agency that I had applied their own policy correctly.  They took the easy road and tried to intimidate me into paying thousands of dollars in interest and penalties.  Imagine the number of American citizens that might not be as confident dealing with the IRS or have the means to conduct research on tax law.  So the IRS is going after thousands of people like me who pay their taxes and take deductions based on existing policy because, frankly, it's easy.  People like me don't have a staff of tax attorneys at our disposal.  But I digress.

• Two words:  Flat Tax.  I don't know what the ideal rate would be (I've heard 17%) or what the cutoff income should be (17% above poverty level, perhaps) but I believe a flat tax would solve more problems than any other single measure.  Like you, I don't believe in propping up portions of our economy with government intervention.  In this case, I think we should bite the bullet; sacrifice the IRS and all its government jobs as well as the whole tax industry for the long term benefits of relieving ourselves of the drain on our economy of supporting this white elephant (the IRS) and the increased tax revenue realized by the elimination of loopholes.

• Not related to tax reform but a good idea nonetheless:  Teach fiscal responsibility in high school, every high school.  This suggestion is about 40 years too late but better late than never.  Children have to learn about the government, why shouldn't they be required to know about money and how to make the most of it.  This, alone, would be the biggest stimulus to the economy since war.

Regarding the other measures delineated in your reply:

• Congressional Accountability in Pay (H.R. 3136):  I see this as specious at best and probably utterly useless. Here's why:  Unless I'm greatly misinformed, most members of congress do not rely solely on their congressional salary and a large portion of them are independently wealthy.  This would ultimately be unfair to the members who do rely on their salary.  Furthermore, I doubt this is the correct approach to spending anyway.  A spending increase may be appropriate in some cases, such as when revenue increases as a result of measures such as those above.

• Balanced Budget Amendment (H. J. Res. 1):  What has congress been waiting for?  This has been a carrot dangling in front of Americans for years.  Pass it and get busy enforcing it. Period.

• 414 Plan (H.R. 2924):  Honestly, where do I start with this one?  This is the kind of thing that makes us lose confidence and respect for politicians.  What's really being said here is this:  Make it legal to take possession of private property and/or force people to vacate their homes, businesses and land, ruining lives and livelihoods in the process in the name of...no, not progress, but compensating for the fiscal incompetence of congress. Or, suspending regulations needed to maintain ecological stability or preserve wildlife.  A better approach might be to eliminate wasteful unnecessary projects like repaving sections of perfectly good road.  With all the bureaucrats running around the country, why can't we have some that are advocates for the people, that scrutinize projects for necessity independent of local, state and federal influence.  This would practically eliminate pork barrel projects and subsequently, billions in waste.  In my opinion, this measure would create a sort of corporate WPA.  I believe we're inviting trouble with this one.

• REINS Act (H.R. 10):  If "Executive" means President, then yes, I agree.  Another check on the executive power is a good thing.  Essentially, if I understand it correctly, this gives congress veto power on executive orders in certain cases.

• Ending Stimulus and Bailout Spending:  Sounds good but where is the proposed legislation?  Where are the TV and radio commercials spouting the evils of bailout spending and stimulus packages?  The government is not in business and business should not be in the government.  Show me a bill that says that.  I agree it was wrong to bail out corporations effectively preventing a market correction.  The damage was done, regardless of intervention, to the tune of 27 trillion dollars in the real estate derivatives market alone.  The government is powerless over an economy of this size.  Any so called bail out is a burden on the people and comparable to giving the failed gambler more money.  Being accountable means suffering the consequences of one's actions.  It also means thinking about your actions beforehand and being careful when they can affect a lot of people.

Incidentally, I also believe Cost Plus and No Bid contracts should be eliminated not only from federal but all state and local governments as well.

I sincerely appreciate your reply and your efforts in congress and in our state.  I hope you'll carefully consider the suggestions.  I can't claim ownership of the ideas except the one about teaching fiscal responsibility.

Respectfully yours,

On Tue, Nov 15, 2011 at 6:07 PM,  wrote:

November 15, 2011

 

 

 

 

Thank you for contacting me to share your suggestion on how to balance the budget, and specifically tie spending to Members of Congress service. While the specific suggestion you mentioned has not be introduced for consideration, you may be interested in legislation I have introduced to rein in spending and balance the budget including a bill that reduces Members' pay depending on the level of government spending. While the House has passed a number of bills that would bring down the deficit, and encourage job growth, we need to change the will of the Senate where these measures are not acted on at all or just die.

 

I believe in the simple truth that we should not spend what we do not have, and we must make it a priority to put our nation back on a path of fiscal prosperity. As public servants, we have a lot of work to do to bring down our national debt and reduce deficit spending. Congress can make some important first steps to show that we are committed to returning America to a firm fiscal footing. Below are ways we can start to meet these goals:

 

• Congressional Accountability in Pay: Just like families and businesses across America, Members of Congress need to be accountable for their fiscal decisions. I have introduced H.R. 3136 that would tie Member of Congress' salaries to the growth in federal spending - the more they spend, the less they make. For instance, if federal spending increases by 7%, congressional salaries are cut by 7%.

 

• Balanced Budget Amendment (H. J. Res. 1): I have cosponsored H. J. Res. 1, a balanced budget provision that would amend the Constitution of the United States to control spending by prohibiting the federal government from spending more than it receives in revenues. Specifically, H. J. Res. 1 would require that Congressional spending not exceed national revenues, unless approved by 3/5 of each House, require the President to submit a balanced budget to Congress, cap spending for any fiscal year at 18% of U.S. economic output, require a 3/5 majority vote to increase the national debt limit, and prohibit an increase in taxes without approval from 2/3 majority of each House.  This bill passed the Judiciary Committee on June 15, 2011, by a vote of 20-12, with my support, and is currently awaiting consideration on the House floor. The House is expected to vote on a Balance Budget Amendment shortly.

 

• REINS Act (H.R. 10): I have cosponsored the Regulations from the Executive in Need of Scrutiny (REINS) Act. This bill would require Congress to take an up-or-down vote on every new major rule before it could be enforced on businesses and the American people. By requiring congressional approval of all major rules (i.e., those having an economic effect of at least $100 million), the REINS Act would ensure legislative accountability.

 

• Ending Stimulus and Bailout Spending: I believe that Congress should never have provided the funds that were used to bail out industries like Wall Street and the auto industry that so dramatically increased spending. I am one of only 17 of 435 Members of Congress to oppose not only that bill, but every other government bailout and stimulus bill under both Presidents Bush and Obama. I was not confident these so-called stimulus plans would help our economy or create the jobs that need to be restored. The bailouts and stimulus spending have only exemplified the conflicts and problems that arise when the government tries to control both sides in the free market;  however, it is the taxpayer that ultimately pays the price for these actions.

 

• 414 Plan (H.R. 2924): I have introduced this legislation to expedite the construction of roads and bridges in order to create jobs and provide needed transportation improvements. Rather than investing more money in "stimulus"-type projects that fail to produce tangible results, the 414 Plan addresses the growing problem of regulatory impediments that stall the highway construction process to an average of 13.1 years. This is accomplished by temporarily suspending burdensome regulations hindering states, localities, and the construction industry from completing transportation projects and improvements in a timely and cost-effective manner while still maintaining rigorous safety and durability standards.

 

• Tax Reform: In our efforts to solve this fiscal crisis, we must ensure that everyone pays their fair share. However, I cannot support a plan that would increase taxes at a time when our country most needs those revenues in the economy and not in government coffers. Taxing small businesses in particular, many of which are taxed at the top individual tax rate, would bring to a grinding halt the very engine of the American economy. I do support reforming the tax code to remove loopholes and inappropriate tax shelters; however, I support retaining deductions such as the child tax credit and mortgage interest deduction. I believe such reforms are necessary to achieve a fairer, broader, and more transparent tax system.

 

I believe that real solutions to our nation’s fiscal situation must include cutting spending, paying our bills, and balancing our budget. As we move forward to address our fiscal challenges, I am eager to see the division caused by unproductive partisan politics erased by a renewed purpose to pursue legislation important to the families and individuals of Virginia and our country. I look forward to working with anyone committed to crafting policies that help, not hinder, economic growth, job creation, and reduce the national debt.

 

I appreciate you sharing your suggestions and hope you will continue to communicate with me as we continue to address our fiscal issues. For more information on what is happening each week in Congress, please visit http://forbes.house.gov to subscribe to my weekly e-newsletter.  If I may be of assistance to you on this, or any other issue, please visit my website or feel free to contact me in my Washington DC office at (202) 225-6365.  With kind personal regards, I am

 

Yours truly,

 

 

 

J. RANDY FORBES

Member of Congress

 

JRF:TW