May 26, 2000

If you ever wondered when the 3 percent federal telephone tax was first imposed, you would be surprised to learn that it began in 1898 to pay for the Spanish American War. That war cost $250 million. Over a century later, Americans now pay $5 billion per year for this tax. That is 20 times the original cost of the war.

When the tax was imposed on telephones, the phone was a recent invention, and a luxury. Today, every American family and business depends upon telephones. This tax is an unnecessary cost on us all.

At a time that we have a savings rate that is negative in this country, at a time that we are trying to encourage investment, and at a time when we are trying to compete in a global market, it is time for us to repeal or change tax provisions that will assist families and businesses. The bill, which passed by a vote of 420 to 2, phases the 3 percent tax out over three years.

The comments of over one thousand constituents show the people of Georgia understand the importance of trade. However, as I noted during Ways and Means Committee consideration of the NTR measure, the people of Georgia also understand that "all that glitters is not gold." The workers and businesses of this country need fair trade, not necessarily free trade.

We always hear about the theory of free trade and free traders, but what people are looking for is fair trade. There is not a worker in Georgia’s Third Congressional District who does not want to make a product and export it anywhere in the world, but they need the support of a trade agreement and legislation that will ensure they have that opportunity. Barriers to American products exist in China and must be lowered. Agreements must be reached to address Chinese tariffs and quotas and its poorly-developed transportation infrastructure which hinders distribution of American products. Agreements must also target unfair Chinese trading practices such as dumping and use of prison camp labor. Because the NTR legislation did not adequately protect Georgia workers from these practices, I could not support it. Trade cannot be one-sided.

China is exporting $70 billion in goods to the United States while buying only $14 billion of products in return. Furthermore, predictions of huge agriculture sales resulting from NTR may be over-stated, according to prominent economists. China has an annual glut of nearly all agricultural commodities and averages an annual agriculture trade surplus of $4 billion. US exports to China, by contrast, have fallen every year since 1995.

Months of studying the effects of normalized trade relations with China convinced me that, on the whole, workers in Georgia’s Third Congressional District will be harmed by the bill. While the district has been attracting heavy manufacturers such as Caterpillar, and e-commerce firms such as Amazon.com, textile mills remain critical to the local economy. Up to 7,000 workers are still employed by mills in the Third Congressional District.

We are the world’s market and we will do business with China, but we need an Administration and Congress which believe in fair trade, not just free trade. Eventually, we must also address the cost of government-imposed regulations, environmental restrictions, and taxes which hinder the competitiveness of American products.

Small businesses are America’s main job creators, but the major killer of these businesses is the "Death Tax." A study of 749 previously successful businesses showed 75 percent failed after the death of the owner. Lack of capital doomed 70 percent of these businesses, which reported that the main obstacle they faced was the demands of paying the estate tax, known by many as the "Death Tax."

Another factor hurting family business is the cost of complying with estate tax provisions. During committee consideration of the repeal bill, I asked Treasury Assistant Secretary for Tax Policy Jonathan Talisman for an estimate of the cost to small businesses for complying with the complicated estate tax regulations. Talisman could not give me an answer.

It just burns me up when the Administration stands and tells us about what you are doing for the world market, but when it comes to the costs of laws, regulations and taxes on businesses, they don’t take any of that into consideration.

The Ways and Means Committee approved the "Death Tax Elimination Act" (H.R. 8) by a bipartisan vote of 24-11. The bill will phase down rates and repeal the Federal estate, gift, and generation-skipping transfer tax over the next 10 years. If passed, H.R. 8 would provide $28.3 billion over five years in tax relief.

The Department of Education oversees more than $75 billion a year in taxpayer dollars and is responsible for $175 billion in student loans, but it continues to fail basic accounting standards. At a task force hearing, we learned the Department misplaced $7.5 billion in funds. We also learned of a contract employee with the Department of Education who was paid $600,00 for work he never did. In return, this employee purchased $300,000 worth of electronics, including a 62 inch television set, for a Department of Education official. The total scheme may have cost taxpayers more than $1 million.

The Government Accounting Office reported that while the Department of Education has improved some of its procedures, it still fails its audit. Education is important to many Americans. This is why we must ensure that taxpayer dollars are used efficiently for the benefit of our students.

The Council for Citizens Against Government Waste, the country’s largest fiscal watchdog group, released its 1999 Congressional Ratings this week, and presented me with an award for working to cut government waste.

Ron Naylor and his family visited and went on a white house tour. We met with Chris Barneycastle, executive director of the Georgia Forestry Association to talk about environmental issues. The Georgia Utilities Contractors Association discussed clean water programs, ergonomics, and tax issues. Members of the Georgia Rural Letter Carriers Association visited to discuss issues important to its members.

As we celebrate Memorial Day weekend, I hope all of us take time to remember the brave men and women who gave their lives so that this nation may live in freedom.

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