Joe is back. [deval patrick tolet me bring this hearing order. It might be the only hearing the house of representatives has had for the pending legislation. I want to thank our witnesses for joining us. Todays hearing is the first and likely the only hearing on hr one tax legislation. Lets give some historical perspective. 2000 one, when president bush took over from president clinton, cbo estimated the total Budget Surplus would be 5. 6 joined dollars. 5. 6 trillion. What actually happened was the federal government ran deficits totaling 6. 1 trillion. What happened between president taxtons time and federal cuts was simple. Tax cuts in 2001 followed by a tax cut of 120 in 2003. In 2005, there was a tax holiday that also cut back billions of dollars in terms of federal revenue. Each time, like today, republicans promised job growth. They took us to the casino, we win. Ot you really get. The Treasury Department issued a one page and analysis on monday is an 2. 9 growth that entirely contrary to what economists have suggested across the board. The reality is tax cuts do not favor themselves. Even taking into account microanalysis, the republican tax bill would still cost 1 trillion. Frankly, even the Treasury Department one pager includes the tax cuts do not pay for themselves. Something else is very important. In 1981, the reagan tax cuts not only did not pay for themselves but they were promised raised on the idea there would be cut to federal spending and future spending. Neither occurred. We have thousands of baby boomers retiring every day. This package is a bad deal for everyone. It is a bad deal for the 36 million middleclass families who will see their taxes go up. It is a bad deal for the millions of americans who will no longer have Health Coverage and an even worse deal for those who have to foot the bill for those responsible. We can do better. Secretary mnuchin yesterday issued a onepage analysis as it was called of the projected tax cut proposal. We responded by offering the following, a one word answer. Maybe. Toh that, i would like recognize the democratic leader for statement. Speaker pelosi thank you for your leadership and thank you to all of the members of the ways and Means Committee for fighting for the middle class. I think especially lloyd doggett, the Ranking Member of the tax policy subcommittee and mr. Thompson because he knows firsthand how damaging this bill is to our state. I just left the meeting with the governor of puerto rico who was saying on top of all of the other damage, this tax bill is very devastating to any recovery there. In the coast to coast states and territories, this is bad idea. , very today we gather for the vital discussion the republicans have refused, simply refused, to have. A discussion of the cold, hard fact of their tax scam. The tax scam is the product of carelessness and fast dishonesty. Millions of middleclass families. Every day the cruel consequences of this bill is better understood than the overwhelming opposition of the American People grows louder. In denial. E the Washington Post says the former chief of staff of the joint committee on taxation that the tax package in aggregate would mean tax cuts, he said that was delusional and dishonest. It is factually untrue. The only group you can point to that wins yearend and year out and winds in very large magnitude is the very highest incomes. The other issue, of course, is what it does to the deficit and we were toldroom that anybody who tells you this trickledown economics pay for itself is not true. It is nonsense. And even further to use a crude expression that begins with bs describes it. It does not even pay for itself. But republicans do not want to hear about how their tax plan hurts children, teachers, veterans, workers, the coast, the rural heartland, and indian country. It robs from the future. It rewards the very rich. The middle off class. The gop want massive tax cuts for the wealthiest 1 no matter the cost to anyone else. Later today they will go to conference on to modernist dispersions of the gop tax scam, out realityutting of silencing the voices of the American People. We are honored to be joined today by distinguished panel of experts who will share their insights on the consequences of the gop tax scam. We are grateful for their leadership and honored for their presence today. [introducing panel] pelosi we are honored to have them here today. Thank you. I appreciate your holding this hearing. I joined leader pelosi in expressing my deep, deep disappointment that this legislation is before us. It is dangerous. It is reckless. It will adversely affect not only our economy but also the very, very large number of americans because the economy will be adversely affected and all of us will be adversely affected. Appreciate the opportunity to be her along with chairman pelosi and members of the ways and Means Committee and leaders from the caucus. Said, this build that is toore us poses great dangers the American People. Some of those dangers we already know. There is a fallacy of supplyside economics that has been proven again and again. I came here and 1981 and so i have been through a number of billsiterations where tax cutting revenues sharply were be healthy for the gross growth that would follow. Afterwards, we experienced the worst economy in recession that any of us in this room has ever expense. MacroEconomic Analysis, even from the Trump Administration Treasury Department agrees it would fail to meet the president s promise and at more than 1 trillion. We know it fails to focus on cutting taxes for the middle class and instead will raise taxes for 78 million middleclass working people in this country. Giving more than 60 of tax cuts to the top 1 . Speaker ryan talked about the average family of 59 thousand dollars getting a 1182 a year tax cut. But he did not talk about the 1198 per week tax cut. We know what would be a trigger for a 25 billion cut in medicare next month. We know it would eliminate Health Insurance coverage for 13 million americans. Sadly, secretary mnuchin did not memberse ranking invitation to join us and explain why the administration believes any of this is good policy. Luckily, we do have, as the leader has pointed out and i am sure the chairman did before i got here, a distinguished panel with us here today to share their insights into not only the economic consequences of these tax proposals but the human consequences as well. O, i thank all of you many of whom ive worked with before. Certainly the two on your right i have talked to on numerous occasions. Thank you for your input. And i thinkdoctor you as well for being with us. We have an opportunity to learn more. I want to Say Something mr. Chairman. Quote. Nt to give you a i think the message of the moment is that the American People all across the country asking us, even the most liberal state, massachusetts, stopped its health care bill. I think that means there will be no more Health Care Votes in the senate prior to the swearingin of scott brown whenever that may be. He said that senator mitch on january 20. Scott brown was elected to the senate on january 19, the day before. Vote ought not the another in the United States senate on this bill until the peoples voice of alabama is seated. Because the present incumbent was defeated in the primaries and is not the voice of alabama. Hopefully senator mcconnell will have the good sense to follow his own advice or perhaps this was simply transactional ethics. I hope not. Thank you mr. Chairman. Thank you. With that i would like to introduce mark sandy whose work i follow. Thank you i should say that the views expressed here are my own and corporation. The taxcut legislation that has passed the house and has passed the senate is bad Economic Policy and there are five significant problems with this legislation. Problem number one, it does not sustainably increase Economic Growth in any meaningful way. That is the result of my and the testimony of that conclusion of penn wharton who did an analysis and the conclusion of the joint committee on taxation. This does not result in any significant, sustainable increase in Economic Growth. Problem number two, it does add significantly to the nations debt load and the deficit. ,he joint committee on taxation their analysis is 1 trillion over 10 years. By my calculation, i think future generations it will probably be greater than that. This is at a time when our fiscal situation is critical. Debt to gdp ratio of 55 percent and even without the tax cuts under current law, we will see the debt load increase quite dramatically. So that his problem number two. Problem number three, this exacerbates, makes worse, the ongoing skewing of the incoming Wealth Distribution. Lower middle income, middle income households do not materially benefit and it material way. Households do benefit and a very significant way in the long run from the legislation. We have a very significant thelem with the skewing of income and Wealth Distribution and this makes it worse. Number four, this does not simplify the tax code. There are elements that does that, raising the standard reduction is probably a good idea by itself, it makes life for filing aself simple tax return but you are elements that are incredibly complex. I cannot even get my mind around it. Particularly with regard to taxation of those businesses the legislation is intended to help most significantly, Small Businesses. The unintended consequences here will be quite significant. I am sure they are going to make many mistakes in the legislation that will be difficult to fix and this political environment is going to make life very difficult for many Small Businesses. Problem number five, this cannot be worse timing. If you crack open a macroeconomic text book, this is not what you would do. Deficit finance tax cuts on a full employment economy simply means the reserve will have to respond by raising its rate more aggressively. Businesses andt the economy will get from lower marginal rates will be completely washed out by the ill effects of higher interest rates. This is not the kind of policy we want to implement at this point in time. Thank you. Thank you. Another economist whose work i follow that regularly appears in the wall street journal, jason furman, who was president obamas economic advisor. Thank you very much for including me in what is the only hearing since the most significant legislation to change the tax code in over three decades has been introduced. The only hearing that has been held on this or to go about . That is my understanding. I do not think it is the fault of anyone in this room. I can speak of this from an economic perspective. I can tell you many of my friends or tax law professors look at this legislation and see enormouscomplexity, avoidance opportunities, huge amounts of activity that will nextplace over the decade. I my testimony is about why this tax bill is bad for the middleclass, bad for the economy, and bad for americas economic future. The direct effects of the tax cut are very easy to measure. You can just put someones income in and calculate what it would do to their taxes. Speaker ryan talked about a typical family that would get an 1100 tax cut in the first year of the legislation assuming everything went right for them. Within a few years, the very same family that speaker ryan hauled up would actually be getting a tax increase and a growing tax increase over time. You see that feature in both the house and the senate bill that in the first year, tens of millions of middleclass families would get a tax increase and over time, the tax cuts for higher income households stay while the tax increases for the middle class continue to grow over time. So it becomes an increasingly bad deal for tens of millions of households despite the fact that over 1. 5 trillion was spent on the tax cut. Advocates of the taxcut say, do not worry about the text increase because you will get a raise from your employer. My analysis, drawing out a range of other analyses with this bill, is that this bill would have an imperceptible effect on Economic Growth and as a result, an imperceptible effect on wages over the next decade as well. This was by the joint tax moodyss, movies, and it even a paper came out and said the Economic Growth would be less than 1 10 of 1 per year of the next decade. The bill would also have a number of other deleterious effects. It would have to eventually be paid for, that would come out of the middleclass family. By cutting the state and local deduction, it would reduce taxes on the highest income household and that state. It would lead states to do that in the competition to keep this people there which would lead them in evitable to produce state and local services at a. Ost that is not factored in finally, it would affect the health system, leading their 2 million peoples two have a tax of overh increase rate 10 . We can do better than we are doing today. In my testimony i outlined some of the ways to do it. This however is not tax reform it is a very large unneeded tax cut that would make the tax code more complicated and over the long run, less progrowth. Thank you. I would now like to introduce brenda. Witham a graduate student a phd in molecular biology at the university of pennsylvania. I have been studying prevention the virus thatv, causes aids. It is a great honor to share how this tax reform bill affect me as a tax as a graduate student. I was born in a oahu, hawaii. When people hear this, they a scenario of life in paradise, but it is not so. There are many low income students just like me to wonder if they have a place in Higher Education. While most worry about employers, we worry about how to afford student housing, meal plans, or those expensive winter coats. Concernsy real persist, often picking up parttime jobs on multiple student loads in the hopes that someday our College Degrees there were numerous outreach stem programs that heavily rely on funding from universities. These were the programs that convinced me that a phd was even possible,possible, despite my a. I worked 4 years before i enrolled in graduate schoolas gw pursuing a phd will be a moderate living. In philadelphia, a purely a to financially survive. Yearly expense of 32,000 or less prevents us from buying a home or starting a family. The economic disincentives are drastically reduced, making it feasible for people like me to pursue an advanced degree. The house version of the tax bill would require me to pay texas as well as 70,000 annually, even though i take him less than 27 take home less than 2700 in your. The infrastructure at these universities allows for the groundbreaking mineral coal discoveries, and funded by university endowment. This bill would negatively impact the infrastructure which currently exists for this research. Pursuing a phd requires every ounce of your ambition. The stress from the passage of this bill would disproportionately affect those from low and middle income backgrounds, forcing us to consider whether we could complete our degree. What is more disheartening are the students who experienced economic hardship, who have to give up their dreams of becoming scientists too. Have accessphd i to worldrenowned scientists at the center for aids research, as well as professors deeply invested in my intellectual growth. I am just a graduate student here. The scientist i hope i would someday become. R students in historically underrepresented communities, a local girl who grew up in a small country town, i implore all of you to focus on efforts to increase access to education thatilding upon the paths i took to be the person i am tod ay. With that i would like to cash to tours of duty in iraq. Executive director of the Union Veterans council, and i am a proud combat infantryman. I lead an organization that represents well over one million workingclass veterans and hundreds of thousands of workingclass veterans across the retired veterans across the country. When i turn 18, i signed a line to fight for an idea of america. What i didnt realize is when i came home, i had come home to a different fight. I can only 2009. I found myself without a job, without a degree. I found myself without a future. It is the same story of hundreds of thousands of veterans around this country and this generation. We have come home to a rigged system that rewards the wealthy and overlooks everyone else. Since 2009 when i came home, i was able to find a very good job. I was lucky. I became a pipe welder to be precise. I decided to dedicate my life to veterans, and my fellow brothers and sisters iphone with, and sisters i fought with. A lot of people like to wave a flag and talk about how much they support veterans. The problem is the underlying issues for veterans are the exact same as everyone else in america. I saw firsthand when i came home in 2009 the deployment rate for my age group was twice that of the regular standard of American People. It is difficult when you come home. You spend your first six years of life where you are supposed to be learning a career serving your country. When you come home, a lot of those skills dont coalesce into job opportunities. Programs that i was able to work with veterans and employers to get jobs for veterans, like the returning heroes tax credit, Wounded Warriors tax credit, active military service tax credit. Those tools significantly dropped the Unemployment Rate for veterans in america. The best medicine is not a prescription, it is a job they can go home on friday and have dignity, take their family out to dinner. This bill that paul ryan is toting as an amazing bill for america cuts every single one of those programs. I will say their names returning heroes credit, Wounded Warrior credit, active Military Reserve activeduty reservist tax credit. These things are gone away. We have 18yearold kids about to deploy to afghanistan. We have found that for 16 years. We have to make sure this next generation of veterans is taken care of too. That is not the only thing. I have heard countless stories of veterans when they come home that couldnt afford health care, the basic means to survive. They have been able to receive aca and new the health care programs. These will be stripped away from them with major cuts. Our retired veterans representative thompson is a vietnam veteran. Community isn about to be retired. Community is about to be retired. In the next five years, they will all be retired. [laughter] no, not you. They will be at retirement age. But when they retire, they rely on Social Security. They rely on medicare. They rely on these programs that bill slashes. It is unconscionable, and it is in time that. It is antiveteran. Right now there is that shining city on the hill, but only a few elite have the keys to the city. That door is not white open for everybody. We have a v. A. That is underfunded and understaffed. We are still trying to put america into debt even more. There are issues my community faces. This tax bill is one of them. I have happy to be here. Economist. Sk our two days ago the secretary of treasury put out a onemonth put out a onepage analysis after months of thought, and said we could be given to 2. 9 growth. Economist. Two days ago the secretary of i responded with a onepage press release, maybe. Could you comment the assurance that this proposal will offer at least 2. 9 growth . You can talk about what happens 39you drop that top rate of. 6 to 39. 7. I saw the press release. The question was posed to me, what do you think of the analysis . The press release. Where is the analysis . The press release. Where is the analysis . [laughter] it is a statement. There are numbers. But how you get to those numbers, i dont know. There is no set of the press re. Where is the analysis . [laughter] it is a statement. There are numbers. But ho models or analysis for historical experience that would be consistent with the kind of results that the secretary in that press release stated. The jointk at committee on taxation i think they do very good work, bipartisan work. I think it is important for congress and policymakers to rely on their work, just as they rely on the cbo. I think they do excellent work here. The endalysis shows by of the 10 year budget window, the level of gdp will be no more than 8 10th of 1 higher. You do the arithmetic, 0. 8 divided by 10, annual growth will rise by 0. 08. If we are at 2, we are not going to 2. 9 , we are going to the 2. 08 perimeter. Committee wasint if you read it carefully, their numbers will even end comp being lower than that. Is 2 to 2. 08 maybe. It is not to present to 2. 9 . Is 2 to 2. 08 can you commene top rate and contrasting that with the proposal for relief . Sure. If i could enter the growth one. Mineublican colleague of me that, and said it read like a coded cry for help, and he read it backwards to see if it was a hostage note. [laughter] i did an analysis to see if we get three percent Economic Growth based on past variations in growth. I put the odds at 4 . Which is to say, if you ask me, will it be 60 degrees on boston this year, there is a chance it will be, but only a lunatic would forecast that. Certainly if you made your plans based on the idea that it will be 60 degrees in boston, you are likely to be disappointed. In answer to your question on the tax rate, yes, in a lot of states like california and new york, massachusetts, you would still face a net tax increase as a result of eliminating the total deduction. Moreover, my concern about of state and local deduction is it would lead to a race to the bottom in taxation that would undermine services in those states. That would happen regardless what you did to the top marginal tax rate. Those harmful consequences would still follow. That, i would like to recognize leader pelosi. Rep. Pelosi i am eager to hear comments from members of the committee. I would like to thank witnesses for their testimony as far as what it does to growth, our deficit, to educating. Nothing reduces the deficit more than investments to education. It is hard to understand why they would go down that path, and with what it does to our military, who are there to protect our constitution and way of life. Jasonk jason i thank for his clarity. I want to hear from members of the committee. Thank you very much. As i said, i have been here for some period of time. Voted against the 1981 bill. Under ronald reagan, the debt increased 189 . It was Something Like 950 came. N that it was close to that when reagan left. Under george w. Bush, i heard the same argument about supplyside and dynamic scoring, that cutting taxes would raise substantialit was close to thatn left. Revenues. But in fact what it raised87 dt recession we have ever had. And given those examples, the opposite example where during the clinton administration, we raised taxes slightly, had the best economy anyone has experienced why should we rely on the representation made today . Mr. Zandi i think you are correct that there is no historical evidence that massive tax cuts will pay for themselves. Are perfectu gave examples. The early 1980 reagan tax cuts significantly increased deficits and debt. In fact, up through the 1986 tax reform law, it was about raising taxes to address the ballooning debt that we suffered because of those early cuts in tax rates. Similarly with the bush tax cuts in the early 2000, you can remember back there was a concern we would run out of treasury bonds. I remember the fed chair testifying, that is our biggest problem, which opened the gates for the tax cuts. A more careful analysis would try to control for everything going on and tease it out. Even when you do that, very difficult to come to the conclusion that these tax cuts on a static pieces will pay for themselves, and economy will be much better down the road. 100 point, because you brought if you goother point, cuts, thee reagan tax nation dept to gdp ratio was 25 roughly. In the early bush administration, when we had those tax cuts, it was 35 . Today the debt to gdp ratio is 75 , the highest it has been since world war ii. Even without tax cuts, debt stands to rise quite considerably. The historical record is just not consistent with the idea that this will be a boon to Economic Growth. Certainly that these tax cuts will pay for themselves. We had a scheduling conflict. So we will yield some time. Thank you. Who is backeld, from the frontline of alabama. [applause] oury question is to economist. I know that you have had the opportunity to advise president s. If you were looking to provide economic our economist. I know that you have growth, whu be advising this administration to be doing . At the end of the day, we know we have gotten out of our worst recession since the great depression, and we are on the rise. Unemployment has not been as low as it has been in decades. What would you advise this administration to do . I agree not only the chances of Economic Growth paying for itself through this tax cut not only is it as impossible as 60 degrees in boston it is almost impossible as a democrat winning a senate seat in alabama. [laughter] rep. Sewell but things do happen. I would look to know what you you were advising this president on better Economic Growth. First of all, i would make more investments in education. That would be at every level of education, from preschool, where the United States is way behind other economies, k12, where our scores are much lower than they should be, through college and graduate. If you look at the source of americas competitiveness, the silicon valley, that is not a function of tax rates or regulation, that is a function of education. We need that across the board. Second of all, investments in infrastructure. We talked about the types of jobs veterans will come back to. Area, and many others. Third, i would reform the tax code, but would not do it in a way that increases the deficit, and many others. That encourages people to work, including workers without children. And finance that in part with tax increases on higher income households. I think that would have little to no effect on growth. I think that would have little to no effect on growth. Finally, over the medium on, we need to bring down our budget deficit, and we need to do it in a way where this bill would take us in the opposite direction. All great policies and suggestions. All would be very helpful. One way to increase Economic Growth in a Sustainable Way quickly is to increase immigration substantially. There has been a lot of talk about skills, educated workers that is pretty obvious. If you are a foreign student that graduates from the university of pennsylvania and by the way, that is a great school to get a phd at. [laughter] mr. Zandi congratulations. Have a visa the day that you graduate. You should stay. Have a jobs. You will create income. You will createwe want you here. As an employer, i employ people all over the world. My biggest problem is finding people here. I am hiring in prague because i cannot bring people to. He United States to work someone would say, i know more ton szandi, i am going create my own company, but they are doing it in the suburbs of prague. We need immigrants of all skills. Blem for the next decade or two is not finding people. We should work very hard to increase immigration. We had a great piece of legislation that passed the senate in 2013, doubles immigration. That is a slamdunk win for the economy. That is the fastest quickest way to get to 3 growth. By the way, that is the only way if you want to get there. You will not get there with tax cuts to corporations. Ideals back to the gentleman i yield back to the gentleman from georgia. I would like to introduce you on behalf of representative evans. I have many colleges and universities in my district. Every, georgia tech emory, georgia tech, georgia state. You raised concern that i have heard from many of these students. I have a simple question. Easieris deal make it for a person to pursue a dream of a Higher Education . Does this bill lighten the load of debt that students all over america faced today . Absolutely not. There are hundreds of thousands of students who dont, from independently wealthy dont come from independently wealthy families. As the university of pennsylvania student also involved in studentfamilies. Government, we have pulled graduate students to ask whether or not they would have to drop out of their programs, despite being in their 4th or 5th years. 6 out of 7 students that we pulled said they would consider dropping out of their programs. This devastating considering you would risk five years of your life only to give up all of that because of this tax reform bill. Rep. Lewis thank you for being here. Will, thank you for your service. Thank you for not giving up, for keeping the faith. Many of us are utterly opposed to this bill, and we will do whatever we can to stop it. Thank you for your testimony. I yield back. Thank you all for coming. I want to help zero in on two key points. One of them is i think the th. Most outrageous from the republicans it claims the middle class is the main beneficiary. Mark, you have already talked about this a bit, this myth that has been paytered about lower taxes for themselves, and so would the increase to the deficit. Let me start with you, jason. Thepge 2, you say based on committee of taxation, the house and senate bills would raise taxes by more than 100 on 36 million, and 22 million households making less than 22,000 a year respectively. That is an astonishing figure. Tell us where this comes from. This was an analysis the joint committee on taxation did. It is 100 or more, and second of all, they are assuming Corporate Tax cuts go to every household. If you look at which household irs, tensheck to the of thousands more way to get a check. Part of this comes from the change in state and local taxation. On page y, mark whatever the number is. I wrote the testimony. I know where it is. [laughter] , you talk about debt loads that they were much lower prior to tax cuts. These are extraordinary. 30 under bush. That compares to 75 today. You have just about one minute. What is the significance of this . It means we have less of a cushion. Part of the reason why the budget level has increased over the period is we had the great recession. That was the recession where theployment hit 10 , deepest since the great depression. We needed all of the fiscal resources along with what the Federal Reserve did to navigate through the incredibly dark period. Here we are on the other side of that. The textbook would say, 4 unemployment, profits are good, we should be working to bring down thenload debt load, so if we have another major problem, we have a cushion. We just dont have that. In fact, whenever cushion we do have left, we are using it in this way, which does not help middle income households, and is not lift Economic Growth. Why are we doing this . It is just the opposite of what a macroeconomic textbook any textbook would say. Rep. Levin did you bring your big sign, why . I will get my desktop publishers to work on that for you. Thank you for all of your testimony. I think it makes it more apparent that what we have is not just a bill, but a giant lie wrapped in lies. It is understandable whys uchin,ry secretary mnc instead of honoring repeated invitations to come before the committee, has been kept in a secure undisclosed location, unresponsive. Indeed, like all members of the Trump Administration, none of them have had the courage to come here and answer questions about this tax bill, perhaps not wanting to disclose how much of willenefits of the bill end up in the pockets of the trump family personally. The testimony you have given makes clear this will not grow jobs, will not grow our economy. I want to ask you about one other aspect we have not addressed, and that is the extent to which this bill will onlyjobs, will not grow our outg commodity exporting of american encourage thejobs abroad. I know that was a central theme john way todate candidate trump candidate trump would prevent jobs going abroad. But ron johnson has been quoted saying that this bill keeps an incentive to keep manufacturing overseas. Isnt it true that multinationals will get a tax break abroad, that would not be available to them for investment they could make in america . Yes. Under the bill, there would be a lower tax rate on production of receipt production overseas. Up bill would fail to recoup to 100 billion of dollars a year lost to income shifting. It does not regain on an ongoing permanent basis, and evening revenuet basis, any from the international sector. Is indeed becoming widely accepted that as much as 100 billion every year is being lost to the treasury through revenue from the international sector. These tax dodging schemes . Yes. The bill would do nothing to recover that revenue. Do you believe permanently exempting profits earned abroad will just increase the incentive for more of these shenanigans . Yes. This bill includes whole new opportunities for Profit Shifting we have not figured out yet, but lawyers will quickly. Schemes . While it is not a bill to encourage job growth, certainly it will be hypergrowth for Tax Accountants and lawyers to find ways around this. Is there any way a multinational could lower its earnings bill to zero if it locates some of its production, say, in an economic competitor like germany . You are exactly right. The way it is structured looks at the minimum tax on a global basis. If you are below the threshold in sun country, like the cayman islands, you can invest in another country like germany, averagely two, and not have to pay any tax against that provision. That was a design choice in the veil. I know it was not written that way. You have followed the paradise papers. Like the Panama Papers before them, they show an immense amount of tax dodging. This bill would appear to only reward those people with more loopholes thank you for having this hearing. It has already been said that we are doing this tax bill and there has not been a single hearing and the house. This will have incredible implications to every american and this is the first time we have been able to hear from yourt witnesses, so thank all for being here and sharing your expertise with us and the American People. Time that we encountered this was almost 30 years ago. Indication, we will not be revisiting this for another 30 years. Writing a tax bill that could potentially do with us for that long, without having hearings, is shameful. So thank you. And sir, thank you for your and to thecombat American People and veterans of community. We need to remember that this does have, as you pointed out, and impact on veterans but also on veterans families. There is more than just of veteran out there. There is a whole family behind them. This bill is going to hurt them. You talked about the high more heroes provision and the work opportunity credit which had bipartisan support when it passed. It really removed barriers that veterans faced to get into the workplace. I understand there are 100,000 veterans that are currently taking advantage of it. The bill also eliminates deductions for Small Businesses and are making their facilities accessible for people with disabilities. But referencep veterans when talking about those with disabilities. It hurts them and their families. Hurts veteran Small Business owners who are trying to do the right thing by hiring veterans into those businesses. Underi. Bill we passed pelosi when she was the speaker has done a lot, but we need to remember that the g. I. Bill does not cover everything. Veterans put their lives on the line for our country and future and they come back, there is a need to get an education. This bill directly hits veterans and their families in the education areas by the student reducing thend by interest they can deduct for student loans. To add insult to injury, we are hearing now from the speaker that after this has passed a they are going to come back and look at cutting Social Security, programs medicaid, the that they call in title bit programs in order to pay for this that they call entitlement programs in order to pay for this. I cant even begin to guess how many veterans rely on the Veterans Health care. They are calling these entitlements. So they are talking about not only hitting you and the people who you represent in the bill, but then coming back and taking a second bite by reducing the services you and your family rely on. You made a lot of excellent points. I think many times when you hear the word veteran, especially for a lot of people who decided not to come to this hearing, it seems we just magically appear when there is an opportunity for a photo. Fromhe reality is, we come the working fabric of america. 89 of all veterans at work right now make less than 100,000. This is the middle class. That, whilee people millionaires are making tons of money off of the stock market, they are in small towns in illinois. Many veterans, especially when they come back to minority communities, they come back to work manufacturing jobs. I was just in chicago with a rally with a large number of laidoff veteran workers who had their jobs outsourced. What thequite sure most unpatriotic thing you could say is, we sent a veterans job overseas because we could pay a worker there a dollar an hour. It is appalling. Our veterans, especially vietnam veterans, they were in the same wage bracket. They rely on things like Social Security and medicare. Raised not to be a gambler. And this is a giant gamble with 1. 5 trillion. You are spot on. Thank you. Does this bill reward corporations who send jobs overseas . Way thatdesigned in a you would get a lower tax rate if you chose to locate your factory overseas rather than the United States. Thank you. I just want to thank mr. Thompson for emphasizing the veterans issues. Duckworthmmy , to hear aid the point her speak to it, the veterans are being so outspoken about this legislation. Thank you for your testimony. Remind voters we begin at 120. We have several other members to be heard. Thehank you mr. Neil and organization. Mr. Neil started out the conversation having conceded that with the statement that this was a lost opportunity. As evident in all your testimonies, that is clearly a case. This was a lost opportunity for the country area when we hope we can regain. For the country. One we hope we can regain. I want to turn my question to our two expert witnesses on the economy. It seems to me, outside of the fact that we can address the other side, they seem to have amnesia when it comes to National Debt or only want to talk about it when a democrat is in the white house, it seems to me that the apparent lack of focus on the deficit was amewhat disguised, almost tactic on the part of someone beinghe underlying theme what they were going to do with entitlements. Social security and medicare are the insurance that people pay for. When we find in this provision that theref will be an automatic cut without intoe having taken place the medicare of 25 billion a year, i would ask our experts how they would try to rectify we are shocked by the fact that our colleagues turned around and said, we are going to be going after entitlements. Not infrastructure or anything that could put people back to work. What is your sense about what this means for medicare . I want to thank you for your Social Security legislation. Terms of, the simplest thing would be to not pass this bill. The second most desirable thing would be to have revenue turnases that would pay to off the request for medicare. If you cant get either of those, you have to figure out what the third best solution would be. I dont think there is any good answer to that question. The issue is the growth in health care costs. I think we made some progress on that. The Affordable Care act, at least the evidence we have, is suggested that it was working and slowing the growth in health care costs, thus reducing the cost of medicare and medicaid. Where our focus should be. How do we make the Health Care System work more efficiently and effectively and deliver the kind of care we need at a lower cost. The Affordable Care act seemed to be going down that path. Ising to preserve that possible in the current would be context helpful. That is the kind of reform we need. It is not cutting. It is how it it is trying to figure out how to deliver better benefits. It is doable. That is what our energy should be spent on. Thank you, i yield back. I appreciate you being here. Footnote, on infrastructure, when these people are advancing, one of the most unpopular tax cuts in history, its proposals like i have to raise the gas tax look more attractive, especially because we have a broad way broad base of support that would pay for that. I would hope that we can focus for a second on what i think is the largest transfer of wealth in our history from people who are going to be our future transferred to people who need it least. One aspect that i find intriguing is that they are changing the way that taxes works. For going forward, as i 80 rstand it, for the way of people get their income, will people who could afford accountants and lobbyists can recharacterize how they earned their income and have access to our lower rate. In aajority gets stuck boat and people who can game the system are going to get a substantial rake. Eak. Ubstantial br can you comment on this shift . Yes. Is something that is not only unfair, but it is economically insufficient. Inefficient. When you tax them at different rates, you have a lot of effort going into exploiting the loopholes. I would like to point out that in the Obama Administration, there was an effort to reef or the Corporate Tax code. Reform theo Corporate Tax code. Part of that was making sure that we lower the tax rates for c courts. It was a very complex issue and i thought they did a very good job at getting at the issue. That was a process. Jason turned gray and it was probably because he works on that or many nights. I really think on the other side of this we are going to have a lot of mistakes and the result be a significant amount of gaming and unintended consequences. It will be very difficult to go back and fix those things. Everybody wanted to fix things in the Affordable Care act because it was a take his of legislation. We could never get that done. That is what is going to happen here. Living with ao be piece of legislation that is very unfair and inefficient. Thank you. Thank you to the group who has come before us, you have distinguished ourselves. See million households will a tax increase next year under this bill area this is not a middleclass will. It increases to 47. 5 million in 10 years. Families in the middle will on average see no benefit from the plan. Who benefits . Benefit all of the tax will go to millionaires and billionaires. The top 1 10 of 1 of earners will see tax cuts of 100,000 per year. This is bad for new jersey. See a only four states to tax increase under the bill. Tens of thousands of taxpayers in every county in new jersey plan a deduction and more than one third to dr. Property taxes. There third d duct deduct their property taxes. Paired with a weakening of the mortgage interest deduction, it is predicted to hurt. Harms local communities. This tax bill punishes those who work, labor, and it rewards capital. Those who already have assets and wealth built up. I have a question for brenda. I spoke with a lot of graduate students at rutgers. This billevastated if goes through. Thank you for being here. I know you are in the midst of exams and it is a big sacrifice to come down here and speak to us. Perfect example of a citizen contributing to america. You are not a drag on society. You worked and went to school. Gop tax bill would charge her upwards of 15,000 in taxes. The children with born to americas richest parents. They may spend money recklessly because they never have to work a day in their lives. The gop tax bill rewards them with 3 million each. In your opinion, do we need more kids born with silver spoons, if we are investing our limited resources to one group, who shouldnt be who should it be . Good question. As i spoke earlier as being a student who did not come from independently wealthy families, i think about an analogy we use in science called the bottleneck effect. Pile of coins that represent people with different economic stances. Some are wealthy, some not. A mix. You also have the neck of the bottle. At the end there is an opening. At the opening you have all of the opportunities for the individuals in the bottle. Think about this bill, i think about the neck of the bottle the coming smaller and smaller. Only individuals who have access immediately to the neck of the bottle will be able to escape and pursue whatever they desire after their education. Thank you. Thank you for being here today. Ms. Sanchez is recognized. Based on the onepage press release and the one word answer , i want toing member i know this is territory you have probably covered a lot but people need to hear it. Do tax cuts pay for themselves . No. Is that forof thumb , everyollar in tax cut dollar per cut will raise . 25 in revenue. Do any of the Economic Analysis of the house or senate bill show that growth could remotely offset the cost of this bill . Analysis havee of shown that the growth would not offset the cost of the bill. I dont think i have seen any analysis. I dont think so, either. And yet the mantra of the Republican Party seems to be, we are going to give out these huge cuts for the wealthy and magically somehow they will thatkle fairy dust and will help pay for the tremendous cost of the bill. Ask, we are who you looking at an increase in the. Eficit of 2. 3 trillion that is a tremendous cost which i have no doubt my republican counterparts will be aghast at the huge deficit increase and then they will jump into, wow, we have these crazy deficits and we have to find a way to reduce them, so we are going to have to any guesses what that might be . Justwouldnt guess i would look at the president s congressional budget. Cuts to medicaid, education, infrastructure. And had you think those cuts are going to impact working families, seniors, the middle class that the bill is supposed to help . It would have a very adverse effect. And we have only been looking at the direct consequences, not the negative indirect consequences. Isso this bill, which supposed to help the middle class, actually means that middleclass families are going benefits getting fewer and end up basically paying for this huge tax benefit to corporations and the wealthiest individuals in the country, correct . Yes. The launch is, how does it make you feel to think that you will actually be paying for the tax cuts for the wealthiest in the country . It is devastating. To think i have spent the last to help finding cures for hiv, to think that republicans dont value that, it is really disheartening. Thank you. And i would like to thank you for your service. Au said patriotism, being patriot, you do not measure it when youudly you cheer send our troops off to war. Patriotism is how we treat the service men and servicewomen when they come back. With the work you do, i want to thank you for that you were clear about how devastating cutting all of these Educational Opportunities and tax credits to help put veterans back to work where they can earn and support themselves and families, if you have anything further to add i would love to hear your take on it. Quickly, senator duckworth was in a rack was when she was shot down. She lost her legs and most of her arms. She has a quote she says. I know the true cost of war. She learned about that at walter reed. We have to invest in our veterans, not just on the battlefield, but when they come home. A nationshington said ability to fight and get people to serve will be directly a result of how they treat their veterans. Unfortunately, this bill does not treat veterans the right way. I for one will fight to make sure that the next generation gets a fair shake. Thank you. We recognize mr. Higgins. Thank you. I would like to say two examples. Deliberate fraud. Bill is being perpetrated by the white house and against the American People. There is not any credible evidence to support the wild housetion that the White Council of economic advisers. Ake to support these taxcuts they stated explicitly that these Corporate Tax cuts will trickle down to each American Household, resulting in annual income increases between 4000 and 9,000. It is not true. And nobody believes them or it. Additionally, the u. S. Treasury secretary said that these tax cuts will pay for themselves in fuel, an additional 2 trillion in Economic Activity over the next 10 years. It is not true. Tax cuts have never come close to paying for themselves. Not once in human history. We have all been him whose old houseled by the white because of the enormous Tax Liability for american corporations. Of total they are 9 federal revenue. Representing 310 billion. That is it. Corporations are recording record profits. Of 35 dy says the rate is too high and they are right. The problem is, the effective Corporate Tax rate is 18. 6 . Others put it at around 20 . Look back to 1950. We had Economic Growth of 8. 4 . Corporate tax rate was 40 . That moreems to me light has to be shown on the issue of Corporate Tax breaks and the argument that is being final thought and that i will let this go american corporations today have 2 trillion of money hidden in Foreign Bank Accounts to avoid taxation. Their responsibility. Somebody said corporations are people. For those who believe this, these people are not paying their fair share. Additionally, u. S. Corporations cash it inrillion of in u. S. Treasury bonds. If they wire to give the wanted toousehold give the American Household and income increase every year, they have plenty of cash to do it. And i think it is so easy to expose the blatant fraud in all of this. Theirers me is argument here about tax policy and ideological priorities. But when you have officials in the white house including the treasury secretary that make arguments like this, there is a lot of people that have a lot of things going on that do not have the core competence, the ability to determine what is right and what is wrong. We should expect good Accurate Information coming out of the white house and from these high officials. I have run over. Mr. Larson will assume the chair after the votes. Thanks to all of you for being here. There are 6 million open jobs across the country and at a time when we have 6. 8 million americans who are looking for work and if we want to have an economy, it seems like this would be a problem we should be tackling, that we have a responsibility to tackled this problem and that includes from our tax policy. I wanted to hear from you, the Ryan Mcconnell plan makes no investments in research but makes it harder for a best and brightest minds to do cuttingedge work that has powered our economy and made the u. S. And unmatched leader in innovation. Is this designed for students and researchers . This tax bill is not designed for students or researchers. Also can they continue to do research in the United States . Many of them have discussed leaving to study abroad so they can complete their phd in a space where they know they will be supported by the government. Thank you. The Ryan Mcconnell plan makes it easier for corporations to invest in things such as a factory full of robots but makes no investments in people. It makes it harder for to go to college, get a stem degree or the training you might need that for inquip americans demand jobs. Is this designed for the toy for century . No, it is not. Andou just said, education Human Capital are at the center of Economic Growth and this would reduce those rather than increase them. Lines the pockets of wealthy corporations and individuals with no apparent benefit for the rest of the country and it makes our fiscal challenges worse. Is this a tax bill designed for investment in infrastructure, health care, research, or any of the countless things that help make our economy and our middleclass stronger . No. Legislation has not got any of those things. So clearly from your testimony, the plan does not just fail to address the challenges that American Workers are facing, it makes it even harder and chairman brady likes to talk about the bill leapfrogging to the front of the pack. Bill, can see from this it is not the frog anywhere but backwards. Thank you and i yield back. Chair thank you. Bill, it is notchairman the chair s. S. To chu paying a tax of 39. 6 could reclassify themselves as a passthrough entity and then enjoy a lower rate of 25 . I understand that tax lawyers are publicly excited about this measure. They are saying this is an and it isew concept like a new paintbox, we have a new tool to play with. Patricia cohen in the New York Times said expect the best it is like a new paintbox, we have a new tool to play with. Paid dentist to turn into corporation so they can take advantage of the 20 Corporate Tax rate instead of having to pay our tax rate of 40 on some of their income. Look for a wave of promotions as lawyers turn into partners to qualify for 23 deduction. Explain how the passthrough provisions will become a new tool for tax lawyers to play with . You said it very well. Three of my predecessors at the council of economic pfizers havepassthrough provisions will become a new tool for tax lawyers to play with . Been publicly negative about the passthrough provisions for the reasons that were at the heart of your question. There is bipartisan agreement that this would be a new complicated unfair, and loophole in the tax code. I think a little over marginal rates loophole in the x code. For businesses is a good idea. If it is paid for lead to stronger Economic Growth. Well done reductions, lead toigned forms can stronger Economic Growth so it is doable. One of the most complicated parts of doing it right, getting it right is this issue around the taxation of C Corporations versus passthrough entities. It takes a lot of thought and a careful designed to ensure that , get thet result in result youre talking about. That is what i fear. It has been done so quickly and there is so many changes so rapidly. It is not clear that this will be done in a way that is effective, efficient, results in the economic benefits that i think would result from reduction in marginal rates for businesses. It is a place to look. Administration was spending a lot of energy and time. It is unfortunate in this environment we are making these kinds of choices so quickly because there will be mistakes and we will see the kinds of things youre talking about. The gaming and that loses the , in everyll respects respect. Thank you. I yield back. Any questions . Recognized as it would be member of the ways and Means Committee. Thank you, mr. Chairman. You talked about and come any quality and it will get worse before it gets better because we have gone from a pension plan, iras and 401 k s where everyday people will be leaving behind millions of dollars. And if this goes a couple of generations, you will have where people are born with Million Dollar states. If you got through the Corporate Tax and the estate tax, your 1. 5 a tax, everyone else has increase. They do get the opportunity to pay for it when the time comes. We were told we could not afford 88 billion for Americas College promise treated 1. 52 in dollars for tax cuts earlier. We were faced with the pension crisis, the loss of tens of billions of dollars but one of the things we keep hearing is you keep talking about tex tax cuts paying for themselves as if they are tax cuts in general. It depends on how it is designed. Seems to me this is the worst thing you can do. For growth. If they were aimed at lower and 1. 52 in, youtaxes, would get some growth. They are better known as consumers. They will spend the money. What relative growth would that be for this design of tax cuts, a better design of tax cuts, or infrastructure are the things that you could do with the jobseducation, number of to low income teenagers and the kinds of things that stimulate growth. What relative growth could you get from 1. 52 in dollars . 1. 5 trillion. You make a good point. Some of the work we did back in the crisis around [indiscernible] february 2009 legislation that help to stimulate the economy and in the great recession. That was a carefully designed plan where there was a lot of thought given to the relative impacts, the socalled multiplier impacts and they do very on the tax side and spending side and it depends on where you are in the Business Cycle and much slack in the economy. A carefully designed tax plan would take that into account. I do not think that is what this tax bill is about. It is not designed from that perspective for sure. Do you want to comment . And with i would give the money to you and let you spend it. College and infrastructure and other such things. And want to thank our witnesses and colleagues for joining with us in making the argument against this tax proposal. Adjourned for him is adjourned. Forum is adjourned. [indistinct conversations] [captions Copyright National cable satellite corp. 2014] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] cspans washington journal live every day with news and policy issues that impact you. Coming up thursday morning, Ohio Republican congressman warned davidson discusses the Alabama Senate race and upcoming fiscal battles. Texas Democratic Congress and Henry Cuellar talks about government spending. Be sure to watch washington journal live at 7 00 a. M. Eastern. Join the discussion. The story from the hill about n a specialwho wo election for a u. S. Senate seat. He said he had a gracious phone call with President Trump in which the president invited him to visit the white house and congratulated his campaigns victory. It was very gracious call, i am very much appreciate it. He congratulated me on the race that we won and congratulated me and my staff on the manner in which we handle this campaign and went forward. We talked about finding the Common Ground to work together. Mr. Jones said during a News Conference in alabama. Jones said he received phone ,alls from Mitch Mcconnell Senate Minority leader charles schumer, senator richard shelby, and senator luther strange, who is in the senate seat as a special appointee. Read more at the hill. Watch cspan3 thursday at 10 30 a. M. Eastern for the coverage on net neutrality. The vote is to roll back rolls past during the Obama Administration and it is intended to reduce regulation of ,he internet on cspan3 cspan. Org, or listen to it with the free cspan radio app. On american cspan3. V on generals we love to hate. On general johnson. Johnsons critics argue that his timidity with the enemy and his combat this with the confederate government enrichment so undermined the southern war effort as to make him a country but a confederate defeat. To these critics, johnson was the real mcclellan of the west. [laughter] a man who lacked the moral will to commit troops to battle unless he could be absolutely certain of victory, and since those circumstances never ever,ed, he seldom, if sought battle at all. Sunday at 4 00 p. M. Eastern reports fromca, president lyndon johnson. The president s oldest johnson became the bride of charles robb. Historically it was the First White House reading waiting and 53 years. And at six. The 200 year history of the Willard Hotel in washington, d. C. , whose guests included abraham lincoln, world war ii soldiers, and the first japanese delegation to the u. S. In 1860. Ask a family can conducted quite a bit of business while he was here. He stayed for 10 days and the first was held at the hotel. When he introduced himself and his wife, he said and wanted to introduce you to the long and the new presidency. American history tv all weekend every weekend only on cspan3. The Federal Reserve is raising its inch mark lending rates i. 25 of eight percentage point and acknowledged the economy had gained momentum by raising their Economic Growth forecast and lowering the unexpected employment rate for the coming years. Janet yellen made the announcement during a News Conference and noted that this is her last News Conference as chair. Ms. Yellen good afternoon. Today the committee decided to raise the target range for the federal funds raised by point 25 of one percentage point bringing it to 1. 252 1. 5 . Our decision reflects our assessment that a gradual removal of Monetary Policy accommodation will sustain the strong labor market while fostering a return of inflation to 2 consistent with the maximum employment and price stability objectives assigned to us by law. The decision i will review recent Economic Development in the outlook. Following a slowdown in the first quarter, Economic Growth steps into a solid 3. 25 pace in the second and third quarters of the year. Household spending has been expanding at a moderate rate. Business investments have picked up. Favorable Economic Conditions abroad supported exports. Overall, we can continue to expect the economy will expand. T a moderate pace while changes in tax policy will likely provide some lift to Economic Activity in coming years, the magnitude and timing of
comparemela.com © 2020. All Rights Reserved.