(Washington, DC) ? Senator Fred Thompson (R-TN) and Representatives George W. Gekas (R-PA) and J.D. Hayworth (R-AZ) today announced they are introducing legislation, the Taxpayer?s Defense Act, which would require federal agencies to obtain congressional approval in order to establish or raise taxes.
“Our objective is clear and simple: no federal agency should set or raise a tax without the approval of Congress and the President,” said Senator Thompson, who is introducing the Senate version of the bill with Senator John Ashcroft (R-MO). “While it is not widespread, we are seeing more and more instances of federal agencies creating and enforcing taxes without input from Congress and the President. These taxes take money from everyone who has a telephone, accesses the Internet or uses electricity. And more importantly, these taxes are imposed without accountability.”
The bill would establish a process to ensure that only Congress allows new taxes to take effect. First, before it could take effect, a tax?setting rule or regulation would be submitted to Congress by the agency. Programs as they currently exist and IRS rulings would not be affected. Second, the Majority Leader of each House would introduce a bill (by request) to approve the rule and allow it to go into effect. Such a bill would be subject to expedited procedures, allowing a prompt decision on whether or not the tax should take effect. Third, the tax could take effect once the bill was passed by both Houses of Congress and signed by the President.
Senator Thompson added, “At a time when we?re debating how to manage the budget surplus, estimated to be in the trillions of dollars, I?m baffled as to the rationale behind these agency-imposed taxes. After all, elected officials, specifically members of Congress and the President, must be the ones to determine whether any new or increased tax is in the public interest and then be accountable to the public for those decisions. Unelected, unseen agency staff should not be imposing taxes or setting tax rates.”
In addition to preventing federal agencies from establishing or raising taxes without the approval of Congress, the bill would:
Promote the accountability of political leaders and federal agencies for tax decisions;
Reduce hidden taxes;
End taxation without representation
“First among the powers that the Constitution gave to the Congress was the power to levy taxes,” continued Thompson. “Just like the founders of this great country, we can not permit taxation without representation.”
Some federal agencies have been given — or have discovered on their own — the authority to tax. Federal agency taxes pass the costs of government programs on to American consumers in the form of higher prices. These secret taxes often are regressive ? hitting many who struggle to get by while putting a drag on the economy. Examples of agency-imposed taxes include:
Federal Communications Commission Tax on Long Distance Telephone Service
The FCC?s Universal Service Tax is a tax on long-distance service paid by every caller in the country. This tax is currently collected through higher phone rates to a tune of over $2.5 Billion dollars per year. Funds are collected and distributed by a private corporation that the Government Accounting Office (GAO) has said was formed in violation of federal law. In addition, the corporation is not subject to laws protecting public funds. These taxes are used to fund a variety of spending programs. This tax undoes rate reductions brought about by the 1996 Telecommunications Act.
Commerce Department Tax on Internet Domain Names
With the authorization of the Commerce Department, a company called the Internet Corporation for Assigned Names and Numbers (“ICANN”) plans to collect a tax of $1 dollar on every Internet domain name. This private company will use the tax proceeds to fund its operations, which so far have included meetings in Brussels, Singapore, and Berlin.
National Science Foundation Tax on Internet Domain Names
In September of 1995, the National Science Foundation authorized a $30 dollar tax on registration of domain names for the Internet. Sixty million dollars was collected before a federal judge put a stop to this illegal tax.
Nuclear Regulatory Commission Tax on Energy Generation
Congress has required the Nuclear Regulatory Commission to recover 100 percent of its budget authority from fees. This means that nuclear utilities and their customers pay for applications, licenses, inspections, renewals and — unlike any other energy provider — all other benefits that the Commission provides to the public. This artificially raises the cost of nuclear-generated electricity to consumers around the country.
USDA?s Research and Promotion Tax on Food
The USDA?s Agriculture Marketing Service runs a wide variety of research and promotion programs, which tax food commodities in order to fund advertising and promotion of commodities. These relatively benign taxes must be approved by majorities of the farmers who pay, and the activities the taxes fund are generally beneficial to farmers? interests. But farmers can not save consumers money by choosing not to pay.
Proposed Federal Energy Regulatory Commission Tax on Electricity
The Administration?s proposed electricity restructuring legislation contains provisions for an invisible $3 billion dollar tax on electricity generation. The “Comprehensive Electricity Competition Act” would give the Secretary of the Federal Energy Regulatory Commission the power to tax electricity. This tax would raise the cost of electricity to consumers, while hiding the real cost of government.