Extensions of Remarks 20735 Extensions of Remarks an Amendment to H.R
Total Page:16
File Type:pdf, Size:1020Kb
July 24, 1984 EXTENSIONS OF REMARKS 20735 EXTENSIONS OF REMARKS AN AMENDMENT TO H.R. 3678 TO The U.S. Army Corps of Engineers which promoted energy independence AUTHORIZE CORPS OF ENGI and the administration both strongiy the solar and conservation tax credits NEERS DISPOSAL OF HOPPER support this amendment which would were denied. Medicaid benefits, which DREDGING EQUIPMENT authorize the Corps of Engineers to provides health care for many of the dispose of inactive, retired, or excess Nation's needy, were tightened. HON. JOHN B. BREAUX dredges which are under its control. I urge my colleagues to read this ar OP' LOUISIANA Such disposal shall be through sale ticle. Congress will no doubt have to IN THE HOUSE OF REPRESENTATIVES or lease to governments under the draft another law in the 99th Congress Tuesday, July 24, 1984 Corps of Engineers foreign technical to reduce the deficit by a greater assistance program, to Federal or amount. Will this mean yet another e Mr. BREAUX. Mr. Speaker, Con State maritime academies for training box of goodies for the privileged of gress in 1978 enacted Public Law 95- purposes, or through sale of such ves this Nation? 269. One of the primary purposes of sels or equipment solely for scrap to The article follows: this legislation was to induce the pri foreign or domestic interests. The vate dredging industry to build corps' contracts for sale or lease of its TAX DODGERS FINDING SHELTER ON CAPITOL modern, technologically advanced retired dredges shall also contain a HILL equipment instead of having the Gov condition that such dredges shall not <By Jerry Knight> ernment expend large sums of public be resold for use within the United In the wee hours one morning a few days funds to build new Government-owned States for the purpose of dredging.e ago, when Congress was struggling to reduce dredges. the federal deficit, a bunch of ~illionaire The private dredging industry has tax dodgers proved that taxes are not as in responded by investing hundreds of THE SPECIAL INTEREST TAX evitable as death. ACT OF 1984 Not if you have friends who are writing millions of dollars in new hopper the tax law. dredges and other new dredging equip With most of Congress and the media ment. Not only has private industry HON. RICHARD L. OTIINGER asleep, House Ways and Means Committee provided the funds for construction of OF NEW YORK Chairman Dan Rostenkowski slipped into a new dredging fleet but it has also es IN THE HOUSE OF REPRESENTATIVES the tax bill a provision that gives a small tablished in the marketplace that it group of accused tax cheaters-most from can do the work at a substantially Tuesday, July 24, 1984 Rostenkowski's home state-privileges en lower cost than was previously done e Mr. OTTINGER. Mr. Speaker, I joyed by no other taxpayers. The law of this land is that every taxpay by corps-owned equipment. would like to bring to my colleagues' er must bear the responsibility of proving Industry's response to Public Law attention an article "Tax Dodgers the deductions claimed on the annual Form 95-269 and its performance in carrying Finding Shelter on Capitol Hill" from 1040 are legitimate. If the Internal Revenue out the national dredging require the July 2 Washington Post which Service questions the deduction you took ments for the Corps of Engineers, is a roots out only one of the dozens of for medical expenses, you have to prove you classic case of the great virtues of our special interest tax breaks included in were sick. free enterprise system. the final version of the Deficit Reduc But that rule of law will not apply to some The amendment which I have of tion Act of 1984. This bill, designed to 200 wealthy commodity traders who have been accused by the Internal Revenue Serv fered will promote and protect the in reduce the $200 billion deficits by rais ice of perpetrating one of the most costly vestment by private industry in its ing $50 billion over the next 3 years, is tax dodges ever discovered. new dredging fleet and equipment. If riddled with designer tax exemptions For these privileged individuals, there will the corps' retired dredges were offered specifically tailored for some of the be a presumption that certain deductions for sale for use in the United States at wealthiest corporations and individ they have claimed are legitimate. Only if a fraction of the cost of construction uals in the Nation. At a time when the the IRS can prove otherwise will the deduc of new modern equipment, it would deficits are threatening the financial tions be denied. discourage contractors from building stability of our Nation, it is uncon Outraged IRS and Treasury Department officials say that never before has Congress new dredges and defeat the purpose of scionable that Congress' tax writing turned the tax law upside down for the ben Public Law 95-269. committees can justify including such efit of a special-interest group. The Corps of Engineers needs this goodies which will cost the Federal Rostenkowski's midnight amendment authorizing language in order to pro Treasury billions of dollars. could force the government to throw out ceed with their plans to dispose of The article's author, Mr. Jerry court cases that took five years to prepare their old dredges at the earliest possi Knight, focused on a tax dodge for the and that the IRS was all but certain to win. ble time. The cost to the corps to constituents of members of the House These are not small potatoes cases. The IRS retain these retired dredges has grown Ways and Means Committee. This tax says one Chicago commodity broker owes It about $8 million and many of the 200 owe significantly. has cost the corps over break has been afforded to 200 or so more than $1 million apiece. If all the cases $3 million during the last few years to commodity traders in Chicago at a have to be dropped, it will cost the govern retain these old dredges. cost of $300 million to the Govern ment $300 million. The corps is anxious to dispose of its mEmt. While this may seem like pea Worse yet, Rostenkowski's bailout means retired or excess dredges with the ex nuts relative to the size of the Federal that two taxpayers who arranged virtually ception of the hopper dredges Hains deficit, it translates into million dollar identical commodity deals to avoid paying and the Markham which will be re breaks for these individuals. · taxes will be treated differently. tained in a standby readiness status at Yet while the wealthy Americans Ordinary investors will have to show they were trying to make money, not simply its facilities in Cleveland, OH, until with friends on the tax writing com create losses to claim as tax deductions. But the Chief of Engineers determines mittees are able to dodge taxes, most thanks to Rostenkowski, "professional com there is no longer any need to retain Americans will find themselves sad modity traders and persons who regularly these dredges on the Great Lakes and dled with greater IRS bills. For in trade commodity futures contracts" will be notifies Congress accordingly. stance, the extension of vital programs presumed to have a profit motive. e This "bullet" symbol identifies statements or insertions which are not spoken by the Member on the floor. 20736 EXTENSIONS OF REMARKS July 24, 1984 In many cases that distinction will mean gladly carried water for the mistreated mil of the Arrow, and has earned his Boy the brokers who invented this tax dodge will lionaires among his constituents. Scout life guard medal. get away with using it, but their clients will To their credit, Reagan administration have to pay taxes. representatives from the Treasury objected I would like to commend the par The transactions at Issue are so transpar to the fix. But with a multibillion-dollar def ents, Scout leaders, and friends of ently designed only to avoid taxes that the icit bill at stake, they could not afford to these two young men for encouraging IRS has won virtually every case it has publicly challenge the powerful committee them in their pursuit of excellence. I taken to court challenging the deals known chairmen over a pet loophole. wish to congratulate Scott and Prem as "commodity tax straddles." The commodity straddle fix is an indict and wish them continued success in It takes a legal brief and a couple of ment not only of the people who pass tax the future.e charts to explain the details of even a laws but also of the entire tax-writing proc simple straddle, but the basic idea is easy: ess. So long as tax laws are drafted in mid At the end of the year you set up two paral night madness, these sordid little para lel deals by simultaneously buying and sell graphs will proliferate like Steven Spiel DON'T NEGLECT THE PORTS ing commodity futures contracts. On one berg's Gremlins. Shake some money on deal you will make money; on the other you them and they multiply. will lose about the same amount. You do The incident also is an embarrassing ex HON. GLENN M. ANDERSON the losing deal in December and claim your ample of the way the press covers the legis OF CALIFORNIA losses on this year's taxes. You complete the lative process. The $300 million fix was re profitable deal in January and recover all ported as routine tax-writing by most media, IN THE HOUSE OF REPRESENTATIVES the money you lost.