Considered Forthwith: Joint Committe on Taxation (HCR info)

(9 am. – promoted by ek hornbeck)

Welcome to the 22nd installment of “Considered Forthwith.”

This weekly series looks at the various committees in the House and the Senate. Committees are the workshops of our democracy. This is where bills are considered, revised, and occasionally advance for consideration by the House and Senate. Most committees also have the authority to exercise oversight of related executive branch agencies.

And we’re back. This week, I will be looking at the Joint Committee on Taxation. With the upcoming Finance Committee mark up of the Baucus bill, this little known committee will be in the spotlight. This is the committee responsible for studying the impact of tax policy and has calculated the revenue projections for the Finance Committee bill (opens a .pdf file).

The Joint Committee on Taxation is not a traditional committee. Its members are specifically drawn from other committees and its role is established by statue in the Internal Revenue Code.


There are always ten members of this committee. Five are from the House Ways and Means Committee and five are from the Senate Committee on Finance. There are three members from the majority party and two from the minority party from each of the committees. In the first year of the Congress, the chair of the Ways and Means Committee chairs the joint committee. In the second year, the chairmanship goes to the Finance Committee chair.

The members for the 111th Congress are:

House: Charlie Rangel, chair; Fortney Pete Stark; Sander M. Levin; Dave Camp; and Wally Herger

Senate: Max Baucus, vice chair; John D. Rockefeller IV; Kent Conrad, Chuck Grassley; and Orrin Hatch

Statutory Role of the Committee

As noted above, the Joint Committee on Taxation does not have a specified jurisdiction under the rules of the House or Senate like the other committees. Instead, the committee’s role is spelled out by statute. From the committee’s website:

The statutorily prescribed duties of the Joint Committee are:

   * To investigate the operation and effects of internal revenue taxes and the administration of such taxes;

   * To investigate measures and methods for the simplification of such taxes;

   * To make reports to the House Committee on Ways and Means and the Senate Committee on Finance (or to the House and the Senate) on the results of such investigations and studies and to make recommendations; and

   * To review any proposed refund or credit of income or estate and gift taxes or certain other taxes set forth in Code section 6405 in excess of $2,000,000.

Under Internal Revenue Code section 8021, the Joint Committee is empowered to:

   * Obtain and inspect tax returns and return information (as specified in sec. 6103(f));

   * Hold hearings, require attendance of witnesses and production of books, administer oaths, and take testimony;

   * Procure printing and binding;

   * Make necessary expenditures. In addition, section 8023 authorizes the Joint Committee (or the Chief of Staff), upon approval of the Chairman or Vice-Chairman, to secure tax returns, tax return information or data directly from the IRS or any other executive agency for the purpose of making investigations, reports, and studies relating to internal revenue tax matters, including investigations of the IRS’s administration of the tax laws.

In addition to these functions that are specified in the Internal Revenue Code, the Congressional Budget Act of 1974 requires the Joint Committee to provide revenue estimates for all tax legislation considered by either the House or the Senate. Such estimates are the official Congressional estimates for reported tax legislation.

The members of the committee do not actually do the legwork on all of the actual study. Instead, the committee employs a staff of PhD economists, lawyers, and accountants to make the specific projections on expected revenue of any changes in tax policy.

It is worth noting that Congress passes a new revenue bill every year. At any time, these provisions could be struck out, thus eliminating this joint committee. This is probably unlikely to happen, but a possibility nonetheless.

America’s Healthy Future Act Of 2009 (AKA: The Finance bill)

On September 16, the joint committee released its ten year revenue projections if the Finance Committee bill were to pass as is. Use this link to go to a page that will open a .pdf file to see these numbers.

According to ten-year projections, the Finance bill would generate $348.8 billion in revenue over the next decade (starting in 2010) to help pay for the proposed “insurance exchanges.” The vast majority of this new revenue — to the tune of $214.9 billion would come from:

35% excise tax on health coverage in excess of $8,000/$21,000 indexed for inflation by CPI-U; levied at insurer level; employer aggregates and issues information return for insurers indicating amount subject to the excise tax; nondeductible; high 17 state transition relief

This is the tax on the so-called “premium” health insurance plans.

The bill also calls for “fees” (read: taxes with a different name) on health insurance providers, clinical labs, and manufacturers and importers of medical devices and brand name drugs.

And here’s me thinking that health care reform was supposed to reduce health care costs.

The Congressional Budget Office took a more comprehensive view of the Baucus plan. According to CBO, this plan would reduce deficits by $49 billion over ten years and:

By 2019, CBO and JCT estimate, the number of nonelderly people who are uninsured would be reduced by about 29 million, leaving about 25 million nonelderly residents uninsured (about one-third of whom would be unauthorized immigrants). Under the proposal, the share of legal nonelderly residents with insurance coverage would rise from about 83 percent currently to about 94 percent. Roughly 25 million people would purchase coverage through the new insurance exchanges, and there would be roughly 11 million more enrollees in Medicaid than is projected under current law.

In other words, the Finance Committee plan only barely covers more than half of the uninsured and a good portion of the newly enrolled end up in Medicaid. So much for hitting those lofty goals of universal coverage. Moreover, 8.25 million brown people who have not yet become citizens (including mothers delivering newly minted full citizens) are frozen out of the system. Of course, this should assuage any knuckdragger fears that we are treating non-citizens like human beings.

Revenue streams for HR 3200

In case anyone is under the delusion that the Finance Committee bill is somehow superior to the House version, here is the link to the report on HR 3200, the tri-committee bill.

A ten-year analysis of the House bill (which includes a public option) shows that total revenue should amount to $583.1 billion. The majority of this new revenue ($543.9 billion) would come from tax increases on the wealthiest Americans. Specifically, the bill calls for:

Impos(ing) a Surcharge for Certain AGI at the Following Rates: 1% for $350,000-$500,000 for Joint Returns for 2011 Through 2012, 2% in 2013 and Thereafter; 1.5% For $500,000-$1,000,000 for Joint Returns for 2011 Through 2012, 3% In 2013 and Thereafter; 5.4% for $1,000,000 and Above for Joint Returns for 2011 and Thereafter; Income Thresholds are Indexed for Inflation


In the case of unmarried individuals, heads of households and trusts and estates, the income threshold dollar amounts are 80 percent of the above dollar amounts.

News Flash: If the public option really does cost $1 trillion over ten years, the House bill covers 54.4 percent of the costs just by increasing taxes on the rich to pre-Bush era levels. These figures do not include cost reductions in other programs nor do they take into account premiums that one would expect enrollees to pay. Naturally, the point is to make insurance affordable. Consider this. If 47 million uninsured people enroll and are charged $100 per month for the public option, the math works out like this:

47 million uninsured x $100/month = $4.7 billion per month

$4.7 billion/month x 12 months = $56.4 billion per year

$56.4 billion/year x 10 years = $564 billion over ten years

$564 billion + $583 billion = $1.147 trillion.

And that is assuming 1) no other cost savings and 2) that it actually would cost $1 trillion to run a not-for-profit health insurance program.

Game, set, match.

Role in the Markup

Click here for a full round up of the joint committee staff’s role in committee mark ups, Floor debates and conference committees.

During markups of the Senate Finance and House Ways and Means committees, the Joint Committee chief of staff (Thomas A. Barthold) usually testifies first and describes what the bill would do. During the remainder of the markup, the staffs of the joint committee and the Finance/Ways and Means committee are on hand to assist Members with drafting the language of any amendments. When the markup is complete, it falls to the joint committee staff to write the final report, including revised numbers to reflect amendments made during the markup.  

The “report” in this instance is a summary of what the bill does and how much is costs. Most bills that are reported out of committee (that is, voted on and passed in committee) are accompanied by a report summarizing the bill for Members not on the committee and often arguing for its passage.

A little history

The Joint Committee on Taxation has a rather colorful beginning and involves a Senator from Michigan getting into a very public fight with the very wealthy and connected Treasury Secretary.

In the 1920s, there were charges of “inefficiency and waste” in the Bureau of Internal Revenue (the forerunner of the modern Internal Revenue Service). In 1924, Senator James Couzens (pronounced “cousins”) introduced a resolution to create a select committee to investigate these charges.

The committee found that there appeared to be no system, no adherence to principle, and a total absence of competent supervision in the determination of oil property values.

The next year, Senator Couzens directly accused the BIR of giving preferential treatment to large corporations, costing the government millions of dollars every year. The bureau then notified Senator Couzens that he owed $10 million in back taxes. Treasury Secretary and Gulf Oil principal owner Andrew Mellon was thought have personally directed the retaliation. Mellon was the third wealthiest person in the country in the 1920s and Gulf Oil specifically benefited from the alleged favoritism by the bureau.

The select committee’s work led to the 1926 Revenue Act and the creation of the Joint Committee on Internal Revenue Taxation. The idea was to allow Congress to get a handle on how tax law was (and is) administered. The House envisioned a temporary panel to help improve tax policy. The Senate strengthened the committee’s role and made it permanent with a professional staff. The committee’s first work was recommendations for simplifying the tax code in 1927.

The statutory role of the joint committee has changed very little over the years. They have taken on a handful of extra roles, including investigating tax issues for nominees to executive offices, providing assistance on negotiating treaties that involve tax revenue (i.e. tariffs and duties), overseeing the tax system, and creating and archiving tax-related documents.

That wraps it up for this week. Next week will probably be the House Committee on Transportation and Infrastructure.

For more information, see my past work:

House Oversight Committee

Conference Committees

Senate and House Budget Committees

Senate Energy and Natural Resources Committee

Senate and House Armed Services Committees

Small Business Committees

Senate Environment and Public Works Committee

House Select Committee on Energy Independence and Global Warming

The Committee Primer

House Education and Labor Committee

Senate Finance Committee

Senate HELP Committee

Senate Judiciary Committee

House Energy and Commerce Committee

House Ways and Means Committee

House and Senate Appropriations Committees

House Intelligence Committee

House Judiciary Committee

House and Senate Ethics Committees

House Science and Technology Committee

House Financial Services Committee

House Rules Committee

The Role of Committees

This story is posted on Daily Kos, Congress Matters, Progressive Electorate, Docudharma, and my own blog.


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