SOME OF THEM VERY MUCH WANT TO GO TO A NATIONAL SALES TAX. THE
           SENATOR KNOWS THAT. THEY WANT TO GO TO A NATIONAL SALES TAX.
           THAT WILL HAVE SUBSTANTIAL IMPACT ON A LOT OF FAMILIES, SOD
           GOOD, SOME BAD. SOME WANT ANOTHER FORM OF TAXATION ALL HAVE
           SIGNIFICANT QUEBECSS. THE SENATOR FROM ARKANSAS SAYS LET'S NOT
           DEBATE THE IDEAS, THE SOLUTIONS LET'S DEBATE A MECHANISM TO

           SUPPORT SOMETHING THAT VIOLATES THE BUDGET ACT IN CONGRESS. I
           DON'T UNDERSTAND THAT. I GUESS THAT WE WILL HAVE A VOTE UP OR
           TOWN ON A PROPOSAL THAT SUNSETS THE ENTIRE TAX CODE WITH THE
           AUTHOR TELLING ME HE DOESN'T KNOW WHAT IT OUGHT TO BE REPLACED
           WITH AND THAT WE OUGHT TO JUST FIGURE OUT SOME WAY TO GET FROM
           HERE TO THERE BY SOME PROTRACTED DEBATE AND IT WILL WORK. IT
           WILL EMERGE I DON'T THINK THAT'S A GOOD WAY TO LEGISLATE. THE I

           THINK THE CHAIRMAN THE SENATOR FROM DELAWARE A MAN WHO THE
           SENATOR FROM ARKANSAS SAYS HE HE HAS AFFECTION AS TO I, I THINK
           HE IS RIGHT, THIS IS NOT A GOOD WAY TO MAKE TAX POLICY. THERE
           WOULD BE AN OPPORTUNITY FOR THE SENATOR FROM ARKANSAS TO BRING
           TO THE FLOOR HIS BEST IDEA ABOUT EXACTLY HOW THE TAX CODE OUGHT
           TO BE CHANGED.
           
           HE HE COULD DO THAT AT 7:00 TONIGHT. THE BEST IDEA HE HAS OR
           ANYBODY HAS ABOUT HOW TO CHANGE THE TAX CODE IN THIS COUNTRY.
           THEN LET PEOPLE GNAW ON IT CHEW ON IT AND THEN HAVE A VOTE ON
           IT. THAT'S NOT WHAT THEY CHOOSE TO DO. THEY CHOOSE TO BRING

           THIS A MORE FUSS SHAPELESS PRODUCT, SUNSET THE CURRENT TAX CODE
           AND REPLACE IT WITH NOTHING EXCEPT SOME HOPE IN THE FUTURE THAT
           SOMEONE WILL DO SOMETHING TO PROVIDE THE REVENUE IN SOME
           UNDESCRIBED WAY. WELL, I DON'T THINK THAT'S A GOOD WAY TO
           LEGISLATE. NEITHER DOES THE CHAIRMAN OF THE SENATE FINANCE
           COMMITTEE, A REPUBLICAN. NEITHER DOES THE NATIONAL ASSOCIATION
           OF MANUFACTURERS. NEITHER DOES THE TAX EXECUTIVE INSTITUTE AND
           MANY OTHERS. SO MR. PRESIDENT, OF COURSE I WOULD BE HAPPY TO
           YIELD FOR A QUESTION.
           

           MR. GRAMS: I HEARD YOU SAID IF THIS CODE WERE ELIMINATED AND
           REPLACED WITH A POSSIBLE NATIONAL SALES TAX THAT IT COULD TAKE
           UP TO 30% OF A SALES TAX TO REPLACE WHAT THE GOVERNMENT IS
           TAKING NOW. DOES THAT MEAN THAT HIDDEN BEHIND ALL THESE HIDDEN
           TAXES AND THE CODES THAT WE HAVE, THAT SOMEHOW THE GOVERNMENT
           NOW IS TAKING, FROM THE AVERAGE PAYER, THE AVERAGE WORKER IN
           THIS COUNTRY, 30% THEREOF INCOME JUST TO SUPPORT THE FEDERAL
           GOVERNMENT?
           
           

           MR. DORGAN: THE SENATOR OBVIOUSLY MISUNDERSTOOD WHEN I SAID. I
           WAS RESPONDING TO A POLICY BRIEF BY WILLIAM GAIL THAT SAID
           ABOUT THE SALES TAX. I YIELDED AND LET ME HAVE THE FLOOR. I WAS
           TALKING ABOUT COME PAIRING THE INCOME TAX TO THE SALES TAX. AS
           THE SENATOR WOULD KNOW, I THINK, THERE IS A SUBSTANTIALLY
           DIFFERENT BASE. ONE HAS A BASE OF INCOME THE OTHER HAS A BASE
           OF SALES. DR. GAIL AT THE BROOKINGS INSTITUTE AND I WOULD BE
           HAPPY IN FACT I WOULD LIKE THE OPPORTUNITY TO SEND IT TO THE
           SENATOR'S OFFICE FOR HIS PERUSE AL. ON PAGE 4 OF HIS TEN-PAGE

           REPORT THAT DOCUMENTS A STUD HED DONE HE SAYS THE 30% WOULD
           REQUIRE A 30% TAX RATE ON THE MORE FAMILIAR EXCLUSIVE APPROACH
           ON A NATIONAL SALES TAX. HE IS PROBABLY THE PREEMINENT
           AUTHORITY ON THIS ISSUE IN THE COUNTRY. I HAVE MET WITH HIM,
           TALKED TO HIM, ENJOY HIS WORK A GREAT DEAL AND I THINK HE HAS
           DONE A LOT OF GOOD WORK ON THE QUESTION OF WHAT WOULD A
           NATIONAL SALES TAX HAVE TO BE, WHAT WOULD IT LOOK LIKE AND WHO
           WOULD IT IMPACT. ONE OF THE THINGS I FIND MOST INTERESTING
           ABOUT THIS DEBATE, HOWEVER, IS WHEN IT IS ON THE SALES TAX OR
           V.A.T. TAX, THOSE WHO PROPOSE SPECIFICS, OFFER IN BOTH THE

           HOUSE AND SENATE SPECIFIC TAX PLANS TO REPLACE THE CURRENT TAX
           CODE AND ALWAYS COME UP WITH COUPLE HUNDRED BILLION DOLLARS
           SHORT. ALWAYS COME UP A COUPLE HUNDRED BILLION SO DOLLARS
           SHORT. SO WHAT THEY SAY IS I WANT TO SUNSET THE CURRENT TAX
           CODE, THEN HERE IS MY SUBSTITUTE FOR IT AND MY SUBSTITUTE IS A
           COUPLE HUNDRED BILLION DOLLARS SHORT. THEY WON'T SAY THAT BUT
           THAT'S THE WAY THEY ARE ARE EE VATED WITH DOWN FAIRLY I. COUNT
           ME IN ON THAT. IF YOU DON'T HAVE TO HAVE SOMETHING THAT RESPOND
           TO THE REVENUE BASE WE NOW HAVE TO THE NEEDS WE NOW HAVE, GOSH

           MAYBE WE SHOULD COME UP WITH SOMETHING ONLY RAISES 50%. REVENUE
           OR ONLY 10%. REVENUE. THAT'S A WONDERFUL WAY TO DO BUSINESS.
           BUT I SIGH PEOPLE WALKING AROUND HERE THAT WOULD A RAISE THE
           FEDERAL DEFICIT SUBSTANTIALLY. AND IMPOSE DISLOCATIONS ON A LOT
           OF FOLKS AND RAISE QUESTIONS ABOUT WHETHER YOU WOULD HAVE THE
           OPPORTUNITY TO DEDUCT YOUR HOME MORTGAGE INTEREST, AND ALSO
           SOME OF THEM INCIDENTALLY SAY TO PEOPLE, WE HAVE DECIDED TO
           HAVE A NEW FORM OF TAXATION. I WILL BET THE SENATOR DOESN'T
           SUPPORT THIS THOUGH. THE NEW FORM IS THIS. WE DIVIDE AMERICANS
           INTO TWO GROUPS. ONE GROUP THAT WORKS, AND THEY GET THEIR MONEY

           BY GOING TO WORK EVERY DAY, AND WE ARE GOING TO TAX THEM
           BECAUSE WE HAVE DECIDED TO TAX WORK, JUST LIKE THE CURRENT
           INCOME TAX DOES, AND ONE GROUP THAT GETS THEIR MONEY FROM
           INVESTMENTS AND WE ARE GOING TO EXEMPT THEN. WE WILL TAX WORK
           AND EXEMPT VFT. A TAX ON WORK AND ZERO TAX ON VESTMENTS. I
           THINK THAT'S THE SORT OF THING THAT WOULD BE TRKS TO DEBATE ON
           THE FLOOR OF THE SENATE. THE QUICKER WE GET TO THAT DEBATE THE
           BETTER. AND THOSE WHO OFFER THIS AMENDMENT SAY WE DON'T WANT TO
           HAVE AT THAT DEBATE WE WANT TO SIMPLY SUNSET THE TABS CODE AND
           DON'T WANT TO DEBATE THE SWEET BY-AND-BY. WE DON'T WANT TO

           DEBATE THE PROSPECT OF WHAT WE MIGHT PROPOSAL PROPOSE. JUST
           ASKING THE SENATOR FROM ARKANSAS WHAT HE PROPOSES, IT OCCURS TO
           ME AT THIS POINT WE DON'T HAVE A PROPOSAL. ALL WE HAVE IS A
           SUGGESTION, GET RID OF THE CURRENT TAX CODE, AND MAYBE TOMORROW
           -- MAYBE THE DAY AFTER TOMORROW WE WILL COME UP WITH AN IDEA SO
           YOU CAN THEN DEBATE THAT ON THE FLOOR OF THE SENATE. I HAVE
           TAKEN ENOUGH TIME, BUT I HOPE THAT WHEN A POINT OF ORDER IS
           MADE, AS I EXPECT IT WILL BE MADE BECAUSE THIS DOES VIOLATE
           BUDGET ACT, I HOPE WITH A POINT OF ORDER IS MADE A GOOD NUMBER
           OF MEMBERS OF THE SENATE WILL AGREE WITH THE NATIONAL

           ASSOCIATION OF MANUFACTURERS, TAX EXEMPT INSTITUTE, THE
           CHAIRMAN. FINANCE COMMITTEE AND OTHERS WHO SAY LET US, IF WE
           ARE GOING TO SUNSET THE TAX CODE, PROPOSE EXACTLY THE AMERICAN
           PEOPLE WHAT WE WOULD REPLACE IT WITH SO THEY WOULD HAVE SOME
           KNOWLEDGE AND CERTAINTY ABOUT WHAT THIS DEBATE IS ABOUT. MR.

           PRESIDENT, I YIELD THE FLOOR. A SENATOR: MR. PRESIDENT?
           
           

           THE PRESIDING OFFICER: THE SENATOR FROM MONTANA.
           

           MR. BAUCUS: . PRESIDENT, I APPRECIATE THE AMENDMENT THAT'S UP
           BEFORE US AND I HAVE THE DEEPEST RESPECT FOR THE AUTHOR,
           SENATOR HUTCHINSON, BUT I MUST SAY THIS IS A VERY BAD
           AMENDMENT. IT'S A PROFOUNDLY BAD AMENDMENT. IT'S A SOUND BITE
           AMENDMENT. IT IS A FEEL-GOOD AMENDMENT. IF PASSED, GUARANTEE IT
           WOULD HAVE PROFOUND ADVERSE CONSEQUENCES UPON OUR NATION. WHY
           DO I SAY THAT?

           ESSENTIALLY BECAUSE THERE IS A REASON WHY THE TAX CODE IS THE
           WAY IT IS. A LOT OF IT IS NOT GOOD. SOME OF IT IS OKAY. WE HAVE
           TO RAISE SOME REVENUE, OBVIOUSLY, TO PAY OUR BILLS. BUT THE
           REASON IT IS WHY IT IS IS BECAUSE THE AMERICAN PEEL OVER THE
           YEARS HAVE COME TO CONGRESS -- THEY HAVE COME TO MEMBERS OF THE
           HOUSE, THEY HAVE COME TO MEMBERS OF THE SENATE, THEY HAVE SAID
           THESE ARE THE TAX PROVISIONS WE WOULD LIKE. MEMBERS OF CONGRESS
           BY IN LARGE DON'T LEAD. THAT MAY BE NEWS TO SOME OF US STYLES,

           WHEN WE REMIND OURSELVES OF THAT, BY BY IN LARGE MEMBERS.
           CONGRESS DON'T LEAD. THE SENATE DOESN'T LEAD THE HOUSE DOESN'T
           LEAD. WE TEND TO FOLLOW. WE TEND THE FOLLOW THE AMERICAN
           PEOPLE. AND THAT IS GOOD. WE FOLLOW OUR EMPLOYERS. THE PEOPLE
           WOULD WORK FOR. THE PEOPLE WHO ELECT US. THE WHO SEND US TO DO
           THEIR WORK. IT IS THE AMERICAN PEOPLE WHO BY IN LARGE HAVE
           ASKED US TO DO THE THINGS WE HAVE DONE IN OUR TAX CODE. THE
           HOME MORTGAGE INTEREST DEDUCTION HAS BEEN MENTIONED MANY TIMES.

           THAT'S A GOOD EXAMPLE. THERE IS A WHOLE HOST OF OTHER REASONS
           WHY THE CODE HAS THE PROVISIONSTHAT IT HAS. WE ARE AN EXTREMELY
           LARGE, EXTREMELY COMPLICATED COUNTRY. MORE SO THAN I THINK ANY
           ONE OF US HERE REALIZES. THERE ARE SO MANY DIFFERENT PEOPLE IN
           OUR COUNTRY PURSUING SO MANY DIFFERENT ECONOMIC OPPORTUNITIES,
           SO MANY DIFFERENT BUSINESS COME BY FACIALS, AND IT IS EVEN MORE
           COMPLEX AS OUR ECONOMY BECOMES MORE GLOBAL. MORE OPPORTUNITIES,

           OVERSEAS, MORE OPPORTUNITIES IN CONJUNCTION WITH JER SEAS
           MARKETS, IT IS EXTREMELY COMPLICATED, AND VARIOUS PEOPLE IN OUR
           COUNTRY, VARIOUS BUSINESSES HAVE COME TO OUR CONGRESS AND SAID
           THESE ARE SOME OF THE THINGS THAT WE WOULD LIKE BECAUSE WE
           THINK THIS IS GOOD. THAT'S WHY OUR CODE IS THE WAY IT IS. THERE
           IS A REASON FOR IT. NOW, IT IS COMPLICATED. IT IS EXCESSIVELY
           COMPLICATED. WE KNOW THAT. WE HEAR FROM OUR CONSTITUENTS THAT
           IT IS MUCH TOO COMPLICATED. PEOPLE DO COMPLAIN. NOBODY LIKES

           TAXES ANYWAY. I THINK IT IS IMPORTANT TO REMIND OURSELVES THAT
           THERE IS A REASON WHY TO DATE WE DON'T HAVE A FLAT TAX, WHY WE
           DON'T HAVE A VALUE-ADDED TAX, WHY WE DON'T HAVE A NATIONAL
           SALES TAX, IT IS BECAUSE THE AMERICAN PEOPLE WANT US TO HAVE
           WHAT WE HAVE. THAT'S POINT NUMBER ONE. THERE IS A REASON FOR
           WHAT WE HAVE AND IT MUST BE DEALT WITH IN A VERY CONSTRUCTIVE
           WAY AS THE PROBLEMS THAT WE FACE. NUMBER TWO, IT IS THE CENTRAL
           POINT. REPLACE --
           

           A SENATOR: WOULD THE SENATOR YIELD.
           

           MR. BAUCUS: I WOULD LOVE TO YIELD.
           

           MR. DASCHLE: A NUMBER OF SENATORS ARE ATTEMPTING TO DETERMINE
           THEIR SCHEDULES FOR THE EVENING, AND I WOULD LIKE TO PROPOUND A
           UNANIMOUS CONSENT REQUEST IF I COULD THAT THE SENATOR FROM
           MONTANA HAVE 15 MINUTES -- THAT IS 15 MINUTES COMPLETE GIVEN
           THE COMMENTS HE HE HAS ALREADY MADE. THE SENATOR FROM SOUTH
           DAKOTA HAS FIVE MINUTES AND THE SENATOR FROM MAINE HAVE FIVE
           MINUTES AND THAT FOLLOWING THE ALLOCATION OF THAT TIME, A VOTE
           BE TAKEN ON THIS PARTICULAR AMENDMENT. AND THAT A MOTION TO

           WAIVE BE MADE AT THAT TIME.
           

           THE PRESIDING OFFICER: IS THERE OBJECTION?
           WITHOUT OBJECTION, SO ORDERED.
           

           MR. DASCHLE: I THANK THE SENATOR FOR YIELDING.
           

           MR. BAUCUS: I THANK THE SENATOR FROM SOUTH DAKOTA. THERE IS A
           REASON, ONCE AGAIN, MR. PRESIDENT, WHY THE CODE IS THE WAY IT
           IS. AND WE SHOULDN'T GLOSS OVER THAT TOO LIGHTLY. SECOND, THE
           ESSENTIAL PROBLEM WITH THIS IS WHAT IS THE REPLACEMENT?
           AND I MUST SAY THAT THE GRASS IS ALWAYS GREENER. IT IS PART OF
           HUMAN NATURE TO THINK THAT SOMETHING ELSE IS ALWAYS NECESSARILY
           BETTER THAN WHAT WE HAVE. SOMEHOW A SALES TAX OR VALUE-ADDED

           TAX OR FLAT TAX IS GOING TO BE BETTER THAN THE CURRENT CODE WE
           HAVE. AND WE ALL KNOW IF WE STOP TO REFLECT AND THINK A LITTLE
           BIT THAT SOMETIMES YOU GET WHAT YOU ASK FOR, AND YOU DON'T LIKE
           IT. IT DIDN'T TURN OUT TO BE WHAT YOU EXPECTED IT TO BE. SO ALL
           OF US AND PARTICULARLY THOSE WHO IN MY JUDGMENT ARE, AND I MUST
           SAY THIS SOUNDS HARSH, WHO ARE BEING PAN DERD TO WITH THIS
           AMENDMENT, AND ARE SOMEWHAT TEMPTED TO BELIEVE INTO IN THIS
           AMENDMENT, SHOULD ASK THEMSELVES REALISTICALLY, WHAT'S LIFE --

           HOW DOES LIFE REALLY WORK, AND ISN'T IT REALLY TRUE THAT
           USUALLY WHEN PEOPLE PROMISE SOMETHING GREAT ON DOWN THE ROAD,
           IT IS NOT NEARLY AS GREAT AS IT IS PROMISED TO BE. OR TO MAKE
           THE SAME POINT A LITTLE BIT DIFFERENTLY, THAT IF WE ARE GOING
           TO ACCOMPLISH SOMETHING THAT'S GOOD, GENERALLY IT IS THROUGH
           HARD WORK, IT IS THROUGH ROLLING UP SLEEVES, IT IS NOT
           DEMAGOGUING, NOT GRANDSTANDING OR PLAYING TO THE CROWD. THAT'S
           BASICALLY HOW WE GET SOMETHING DONE THAT'S GOOD AND MAKES

           SENSE. IF THIS AMENDMENT IS ADOPTED IT IS GOING TO CAUSE DEEP
           UNCERTAINTY IN AMERICA. WE ARE PROUD IN OUR COUNTRY WITH ITS
           ECONOMIC GROWTH IN THE LAST FOUR OR FIVE YEARS. LOW INFLATION,
           LOW INTEREST RATES, GENERALLY LOW UNEMPLOYMENT RATES. ECONOMIC
           GROWTH RATES HIGH. THE STOCK MARKET IS GENERALLY DONE WELL
           EXCEPT FOR A LITTLE BIT LATELY. NOT SO WELL IN THE 4R569 WEEK
           OR SO. IF THIS AMENDMENT PASSES, JUST THINK OF ALL THE PEOPLE
           AND ALL THE INSTITUTIONS THAT ARE GOING TO NOT BE ABLE TO PLAN
           VERY WELL FOR THE FUTURE, AND ALL THE UNCERTAINTY THAT THIS IS

           GOING TO CREATE. THE LIST GOES ON FOREVER. WE CAN BEGIN WITH
           BUSINESS. BUSINESS HAS ALL KINDS OF TAX PROVISIONS. WE CAN
           ARGUE OVER THE MERITS, BUT THEY ARE THERE. LET'S TAKE THE
           BUSINESS EXPENSE. THE BUSINESS NOW HAS. ARE WE GOING TO KEEP
           THE NECESSARY -- ORDINARY AND NECESSARY BUSINESS EXPENSE OR NOT?
           IF YOU ARE A BUSINESSPERSON YOU WANT TO BE ABLE TO DEDUCT YOUR
           COSTS. BUSINESSES WON'T KNOW IF THEY CAN DEDUCT COSTS ANYMORE.
           THEY WON'T KNOW BECAUSE THEY DON'T KNOW WHAT THE NEXT LAW WILL

           BE. IT GOES ON FOREVER. WHAT ABOUT THE FOREIGN PROVISION SNS
           THEY DON'T KNOW IF THEY WILL BE THERE. THEY DON'T KNOW WHAT THE
           DEDUCTIONS ARE GOING TO BE FOR DEPRECIATION. THEY HAVE NO IDEA. SO WHAT'S A BUSINESS TO DO?
           LET'S TAKE AN INDIVIDUAL, HOME MORTGAGE INTEREST DEDUCTION HAS
           BEEN MENTIONED MANY TILES. JUST THINK FOR A MOMENT WHAT'S THAT
           DO TO THE REAL ESTATE MARKET?
           WHAT DOES IT DO TO HOME BUILDERS?
           CARPENTERS?
           ELECTRICIANS?
           WHAT DOES IT DO TO PEOPLE WHO DEPEND ON HOMES OR BUILDING NEW
           HOLES OR BUYING NEW HOMES?
           THEY DON'T KNOW IF THE MORTGAGE INTEREST DEDUCTION WILL BE

           THERE. OH, YOU SAY IT MIGHT BE, WELL THAT'S WHAT THIS SPONSORS
           SAY, THEY DON'T KNOW THAT. NOBODY KNOWS THAT. NOBODY CAN SAY
           THAT FOR SURE WITH ANY CERTAINTY. LET'S TALK ABOUT RETIREMENT.
           WE HAVE 401-K'S. RIGHT ABOUT THIS ROTH I.R.A. WE PASSED A SHORT
           WHILE AGO?
           A LOT OF AMERICANS ARE WORRIED ABOUT THEIR RETIREMENT SECURITY.
           THEY ARE WORRIED ENOUGH ABOUT SOCIAL SECURITY. THEY WANT TO BE
           ABLE TO INVEST IN I.R.A.'S, 401-K'S, THIS AMENDMENT SAYS NOPE,

           DON'T HAVE THOSE ANYMORE. THEY ARE GONE. SO WHAT DOES ONE DO?
           SHOULD HE INVEST IN A ROTH I.R.A.?
           INVEST IN SOMETHING ELSE INDEPENDENT OF THE CODE?
           MAYBE REAL ESTATE. WE ALREADY POINTED OUT THAT REESTATE MIGHT
           BE IN JEOPARDY BECAUSE OF WHAT WE MIGHT BE DOING HERE. MAYBE
           INVEST IN GOLD OR SOMETHING. WE DON'T KNOW WHAT THE COMMODITIES
           MARKET ARE GOING TO BE AS A CONSEQUENCE OF THIS AMENDMENT. THIS
           AMENDMENT CAUSES SUCH UNCERTAINTY. LET'S TAKE THE PRESIDENT'S
           BUDGET. WHOEVER IS PRESIDENT AFTER THE YEAR 2000, HE OR SHE,

           DOESN'T
{END: 1998/07/28 TIME: 18-15 , Tue.  105TH SENATE, SECOND SESSION}