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Herger Statement: Hearing on Tax Proposals Related to Legislation to Legalize Internet Gambling

May 19, 2010

Thank you, Mr. Chairman.  Due to other obligations, including work on the President’s National Commission on Fiscal Responsibility, Ranking Member Camp is, unfortunately, unable to attend the hearing this morning.  I know there were many scheduling issues, and he appreciates the Chairman’s attempts to accommodate him, other members of the Committee and the witnesses.

Mr. Chairman, given the fact that just four years ago, the House voted overwhelmingly – 317-93 –  to ban Internet gaming, I have to ask why we are even holding this hearing when so many other more pressing issues confront us.  I should note that 115 Democrats joined nearly all Republicans in supporting the measure.  So it is pretty clear to me that Congress is not about to legalize, let alone legalize-and-tax, internet gambling.  Yet, here we are discussing those very topics.

There are far more pressing issues we should be focused on – like actually creating jobs.  The latest monthly jobs report shows the unemployment rate stuck at nearly 10 percent – 9.9 percent in April.  This is a third higher than the unemployment rate the President promised once his stimulus bill was enacted.

These aren’t just statistics; these are real families and real Americans struggling to find work and put food on the table.  All told, 3.3 million Americans have been added to the unemployment rolls since January of last year.

How does legalizing and taxing internet gambling help these Americans?  What kind of economic agenda does this represent?

For that matter, the House later this week is expected to consider a massive spending bill that also contains a few extensions of current tax law.  This legislation, which we have not seen, is reportedly in the range of $220 billion, with nearly 80 percent of that — $170 billion – unpaid for.   

That leaves about $50 billion in new revenue increases, including a tax increase on “carried interest.”  This tax hike would discourage business investment when we most need to spur economic growth.  It reportedly will also include other new revenue raisers, including on U.S. worldwide companies competing abroad and on the income of S Corporations.

But this committee has not reviewed the specifics of these proposals – meaning this Committee, and the individuals we represent, have not had a chance to understand these tax hikes, how they would directly impact those who pay, and how they could undermine efforts to get our struggling economy back into high gear. 

And beyond that, we are staring at a massive looming tax increase, the expiration of the 2001 and 2003 tax relief, which will expire at the end of this year, and which would result in higher taxes for every American who pays income taxes.  Shouldn’t we be devoting our time to figuring out how to prevent those massive tax increases? 

These are all questions that must be answered, but instead we are here today talking about legalizing and taxing internet gambling.

My friends in the Majority seem to be wagering that the American people won’t notice what’s going on – or rather what isn’t going on – in Congress.  But I think they know the real story: this Congress is not focused on job creation.  With so many Americans out of work, we should not be holding a hearing on legalizing and taxing internet gambling.  Instead, we should be holding hearings on how we get the private sector growing again and creating jobs for American families.

So, while today’s hearing may be interesting and informative, it is no substitute for real action on job creation and economic growth, and nobody should be confused into thinking otherwise.  

I yield back.