II. HOW THE JOINT COMMITTEE FULFILLS ITS STATUTORY MANDATE

A. Overview

The Joint Committee is closely involved in every aspect of the tax legislative process. Among other

things, the Joint Committee staff (1) prepare hearing pamphlets, committee reports, and conference

reports (statements of managers), (2) assist the office of legislative counsel in the drafting of

statutory language, (3) assist Members of Congress with the development and analysis of legislative

proposals, (4) assist Members of Congress in addressing constituent issues and problems, (5) prepare

revenue estimates of all revenue legislation considered by the Congress, (6) review proposed large

income tax refunds, and (7) initiate investigations of various aspects of the Federal tax system. These

staff activities are described in greater detail below.

The role of the Joint Committee in the legislative process has expanded as the complexity of the

Federal tax system has increased. Members of Congress, particularly Members of the tax-writing

committees, have increasingly relied on the nonpartisan, technical expertise of the Joint Committee

staff to assist them in making objective and informed decisions with respect to proposed revenue

legislation.

B. Specific Characteristics of the Joint Committee

There are four distinct characteristics of the Joint Committee that, together, create its unique

contribution to tax legislation.

1. Nonpartisan

The two tax-writing committees, other committees with concerns regarding taxation, individual

Members of Congress, and committee and Member staffs rely on the Joint Committee staff to

provide objective and confidential technical analysis and assistance on tax legislation.

The Joint Committee staff does not operate either as a majority staff or as a minority staff. It does not

have the duty of representing one particular point of view on an issue. Consequently, it is able to

examine critically tax policy in all its aspects. It can take a long-range view, without having to focus

on the day-to-day exigencies of the legislative process. For example, the Joint Committee staff has

undertaken studies to update and simplify particular aspects of the tax law, even where there was no

short-term pressure for legislation.

2. Joint

The Joint Committee provides vital continuity from the beginning to the end of the tax legislative

process. This continuity minimizes the necessity of "reinventing the wheel" as proposals move

through the various stages of the tax legislative process. This continuity also ensures that proposals

are consistently evaluated throughout the tax legislative process from the perspectives of tax policy,

technical accuracy, administrative feasibility, and revenue impact.

This continuity is particularly valuable during conference, after both the House and Senate have

passed their own versions of tax bills. There are often significant differences between the Housepassed and Senate-passed versions of major tax legislation. The Joint Committee staff are, however,

intimately familiar with both versions and therefore provide crucial assistance to the conferees in

reaching workable compromises. The Joint Committee staff's involvement at every prior stage of the

legislative process facilitates the identification of possible compromise proposals and the technical

resolution of proposed compromises. This function of the Joint Committee staff complements, but

does not duplicate, the work of the tax staffs of the tax-writing committees.

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3. Solely tax

The desire of the Congress to exert comprehensive control over tax legislation has created the need

for an extraordinarily high level of technical expertise, including such specialized topics as

international taxation, pensions, insurance, trusts and estates, tax administration, tax-exempt bonds,

excise taxes, and mergers and acquisitions. The types of objective analysis for which this expertise is

needed include legal analysis of the operation of present law as well as proposed changes,

predictions as to the behavioral responses of affected taxpayers, economic analysis of the effects of

tax proposals on both the aggregate economy and specific sectors, and revenue estimates.

The complexity of the tax laws places a high premium on objective technical advice. Because the

Joint Committee is devoted solely to tax issues, its focus on fulfilling its statutory mandate is

undiluted by the need to respond to other legislative pressures. The Joint Committee staff is large

enough to respond to the needs of the tax writing committees, but is also small enough that it can

respond quickly to the exigencies of the tax legislative process.

4. Independent

Because of the importance of tax legislation and its wide impact on large numbers of businesses and

individuals, the Congress has historically insisted on special independence from the executive branch

when writing tax laws. Separation of powers considerations reinforce the need for independent

congressional expertise in all events. The members of the party that does not occupy the White

House need a source of independent tax analysis and advice. Also, the Congressional tax committees

need a source of independent, nonpartisan technical tax advice even when the party controlling the

Congress (House and/or Senate) is the same as that controlling the Executive Branch.

One manifestation of independence is the extensive Congressional analysis of revenue proposals

submitted by the Administration. At the technical level, tax legislative language and the

accompanying committee reports typically are drafted in great detail, leaving correspondingly less

room for interpretation by both the IRS and the courts. Access to an objective source of analysis and

assistance in formulating legislation permits the Congress to retain independence from the tax

expertise of the executive branch.

Moreover, the independence and neutrality of the Joint Committee staff serve to facilitate exchanges

of information with the IRS, Treasury, and other government agencies, with interest groups and their

representatives, and with taxpayers generally. Through access to the Joint Committee staff, taxpayers

are assured a professional review of their suggestions or complaints about tax proposals. Public

confidence in the independence of the Joint Committee staff is important in adding credibility to the

information it provides Congress relevant to the formulation of legislation.

As one dramatic illustration of the benefits of the Joint Committee's independence, consider the Joint

Committee's examination of President Nixon's 1969-1972 income tax returns. In December 1973,

President Nixon requested that the Joint Committee review certain transactions as reported on those

returns (which he released to the public), in light of what he called possible "continuing public

questioning" of their proper tax treatment. In recognition of the objective nature of analysis

conducted by the Joint Committee, President Nixon requested that the Joint Committee determine

whether, in its judgment, certain items had been correctly reported; the President stated that he would

pay the IRS any additional tax liability which might be determined to be due. President Nixon stated

that the Joint Committee study would "resolve these issues to the full satisfaction of the American

people."(1)

After an exhaustive study by its staff, including extensive review of documents and interviews with

some 30 involved individuals, the Joint Committee published a 210-page staff report concluding that

additional tax liabilities totalling more than $440,000 were due for the years 1969-1972. At the time

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the report was issued, both the Senate and House tax-writing committees had Democratic majorities.

If a report finding substantial tax deficiencies due from President Nixon had been issued by

committees controlled by members of the opposing political party, no matter how scrupulously such

committees had sought to be evenhanded, there might have been a public perception that political

considerations had in some way influenced the findings. The existence of the Joint Committee, with

a nonpartisan, professional staff carrying out its functions under the supervision of Members from

both bodies and both parties, assured the public (as President Nixon stated) that there would be a fair

and comprehensive analysis of the issues.

C. Conclusion

The Joint Committee today continues to carry out its legislative mandate professionally and

effectively. The authors of "Renewing Congress," a report issued in 1993 by the Renewing Congress

Project of the American Enterprise Institute and the Brookings Institution, state that the traditions of

"non-partisan, career professionalism that are still typified today by the staff of the Joint Committee

on Taxation" are, in their view, "eroding" elsewhere in the Congress.(2)

1. The Joint Committee on Internal Revenue Taxation, Examination of President Nixon's Tax

Returns for 1969 through 1972 (JCS-9-74), April 3, 1974, page 1.

2. Mann, Thomas and Ornstein, Norman. A First Report of the Renewing Congress Project.

Brookings Institution and AEI, 1993, at page 69.

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