Transcripts For CSPAN3 Key Capitol Hill Hearings 20171113

Our nations tax system and relief the tax burden on american taxpayers with the focus on middle class families. Todays markup is the combination of the years long work. Almost every member of our former almost every member has participated in this process. Our former chairman senator max bacchus was engaged in this effort as was his counterpart on the republican side. Ranking member senator widen has done a lot of work on this effort others who have served on this committee, and moej t most of those who are now on the committee have done a great deal of work to advance tax reform, i want to thank all of my colleagues for their work. I have more to say about members contributions in the coming days, id like to take a few moments to talk about some of the highlights in the bill that will be before us today and this week. This legislation will provide much needed tax relief to American Workers and families. It reduces rates across the board, particularly for those in the middle class, who have struggled to get through the past eight years of economic stag nation it provides substantial benefits for parents and familyies the bill modifies the brackets schedule setting up seven separate tax brackets, the lowest at 10 , and the highest at 38. 5 . Theres also an expanded zero tax bracket, meaning more will see their Tax Liability eliminated entirely. While the unified framework that congressional and administrative leaders released last month, we found the additional brackets help us to better target tax relief to lower income americans and to the middle class even with the additional brackets, the system will be much simpler for the vast majority of taxpayer, the bill nearly doubles the standard deduction up to 12,000 for individuals, 24,000 for married couples and 18,000 for single parents. This as i just mentioned effectively expands the zero tax bracket and reduces the tax burden for millions of families, removing entirely the Tax Liability for many others and eliminating their need to itemize deductions. According to projections, more than 90 of taxpayers will use the standard deduction under this plan. In con taft thats in contrast to around 70 today, which makes the process of computing and filing ones taxes a much simpler proposition. The bill also expands to Child Tax Credit from 1,000 to 1650. And substantially lifts existing income caps on the credit allowing many more parents to claim the credit and giving additional tax relief to middle class families. Under our bill, a family of four making the u. S. Median income of around 73,000 a year will seen their federal income. Tas reduced by 40 . In specific dollar terms, thats a reduction of nearly 1500 nor a single year. Thats about 125 more take home pay for every month for a single parent making 41,000 a year theyll receive a tax cut which cuts their over all Tax Liability by a little more than half thats real money that will help tens of millions of American Families make ends meet simply improve their quality of life. Our bill also preserves the mortgage interest deduction, and the deduction for charitable contributions those are two really important provisions that many support and want to keep in place. Weve also gotten a number of letters and heard statements from many of our democrat he can colleagues urging us to maintain a number of other positions in the code. I received the letter last week urging us to quote existing tax incentives, our bill in accordance with the urging of these colleagues keeps 401 ks and individual retirement accounts fully in place. Others have weighed in on the adoption tax credit or the deduction for medical expenses, both of which are unchanged in this legislation. And weve gotten word from colleagues about their desire to keep the earned income tax credit where it is. Ive only mentioned the individual reforms in the bill. If you look at the policies ive mentioned, you should notice that they represent ideas that both republicans and democrats tend to support. In fact, our Ranking Member introduced legislation a few years back that have significantly brought down individual rates across the board in a fashion similar to the approach outlined in our framework. I might add and nearly tripled the standard deduction. It would have also repealed the alternative minimum tax as would the bill were debating today. In those and other respects that previous legislation is pretty similar to ours. On the business side, our bill willer. Thely lower the Corporate Tax rate to 20 . The current 25 Corporate Tax rate is the highest in the industrialized world. Actually its 35 Corporate Tax rate. Thats the highest in the industrialized world. This is a drag on our economy. One of the few factors continually chasing companies cref Economic Activity offshore. If this idea sounds familiar, it should. Members of both parties for years now have called for lowering the Corporate Tax rate, recognizing by being so out of step with the rest of the industrialized world, we put American Companies, the workers they employ and the customers they serve at a march disadvantage. For example, in this legislation, with former senator coates, senator wyden proposed reducing the Corporate Tax rate to 24 . Two years ago, our Bipartisan Working Group on business tax cochaired by senators cardin and thune said that business taxes should be lower. In fact, that recommendation was the first principle of Business Tax Reform listed in their report to the committee. And the senate as a whole. President obama in one of his later budgets proposed reducing Corporate Tax rates to as low as 25 for certain sectors. And last year, president bill clinton even as his wifes president ial campaign was calling for an increase in Corporate Taxes said we should we should lower our corporate rates. He wanted to lower them to be more on a par with our foreign competitors. We placed a rate at 20 in our bill which is slightly below the current average of oecd countries. Our bill also lowers the burden on Small Businesses through a fairly unique approach. For passthrough businesses whose income is taxed on individual returns, our bill provides a simple Tax Deduction for qualified business income leaving regular compensation to be taxed at the individual rates. The mechanism involved uses existing provisions of the tax code which businesses are accustomed to dealing with and have a large body of precedent behind them. The mechanism provides from policing against anyone thinking about mischaracterization of one form of income as another nrs order to unduly lower their tax bill. Our legislation also expands the availability of cash accounting in order to allow more businesses to simplify their accounting methods. It expands section 179 expensing for Small Businesses in order to help owners invest and expand their businesses so they can increase productivity. And hire more workers. The bill also provides businesses with full and immediate expensing for new equipment. Again, to enhance productivity. Create jobs, and grow wages for American Workers. Finally, the bill modernizes our archaic International Tax system leaving us more toward a territorial tax system. Our current worldwide system is another element of our tax code that chases jobs, Economic Activity, and investment out of the United States. Under this legislation, american multinationals will be able to bring funds from their foreign subsidiaries back into the u. S. Without facing Tax Liability. That means an end to the lockout secretary which in turn means more investment, production, and Economic Growth right here in he ever america which, of course, translates into more jobs and better wages for taxpayers. To provide safeguards, our bill also includes provisions to prevent earnings stripping and other practices that erode our tax base. This is another area where both parties tend 0 agree. In 2015, for example, a Bipartisan Working Group on International Tax reform which was coshared by senator portman and the Current Senate minority leader assessed the problems with the current and International Tax system and recommended change entirely consistent with the ones that were proposing today in this legislation. Long story short, our proposed International Reforms are not just a republican wish list. Theyre some sort of favor to big companies. They are in fact, well within the bipartisan mainstream. All told, the business tax proposals in our bill are designed to grow our economy, increase wages, promote the expansion of businesses, and of course, create jobs. These sections of our bill will modernize our business tax system finally updating it for the 21st century. Thus far, ive only gone over some of the highlights of the bill. Theres more about the bill to discuss which well get to throughout the course of this markup. However, before i conclude, i do want to respond in advance to some of the claims were certain to hear this week about this legislation. There are a number of myths being spread about this bill and what we intend to accomplish. I want to put some of those to bed right now. Friction, im quite certain well hear a lot about supposed process files here today. Well hear that were rushing it and rushing the bill through the committee. And that we havent had enough hearings. Well also likely hear where bills being drafted in secret and democrats being shut out of the process. Let me set the record straight on these points. Under no objective standard is this bill being rushed or forced through. This committee or through either Congressional Chamber as i noted earlier, this committees efforts on tax reform go back years. Let me outline some of the work weve done to lay the groundwork just since i became lead republican on the committee in 2011. In that time span, just short of seven years, weve had about 70 tax hearings, most of which included indepth discussions on ways to improve our code. In the first year, i was joined by all the republicans on the committee in submitting 21 page safz tax reform recommendations to the socalled super committee. This was the start of laying the groundwork. Chairman bachus and i as part of our blank slate approach in 2013 produced ten separate bipartisan options papers discussing concrete policy solutions to fixing our tax code. At the end of 2014, i released an extensive report more than 300 pages long discussing in some detail ideas and principles to be considered during the tax reform debate. The following year, senator wyden and i oversaw the creation of five separate Bipartisan Working Groups, all of whom produced reports which provided the foundation for even more hearings. In other words, weve discussed all of these optics an length. Well also be walking through the bill as part of this markup. Theres quite simply no reasonable basis to claim that more hearings, more discussion and more deliberation have to take place before we can move forward. Virtually every proposal contained in this bill has been the subject of public debate for many years working with colleagues in congress and at administration and after close consultation with committee members, weve put together this chairmans mark. Theres nothing unusual about this process except that with other matters we dont usually spend so many years of study and discussion before putting more concrete proposals together. Furthermore, i have personally invited democrats to participate in this process on a number of occasions. Both publicly and privately. Ive sat in on our committee in front of cameras and microphones and asked colleagues to come to the table with objective minds and without preconditions. Our friends on other side decided it was in their best interests to put some fairly strict preconditions on their involvement. Some of those preconditions did shift a bit over time like the later retracted speeious demand that President Trump release his tax returns before democrats would come to the table. An ultimatum made by key members of the Senate Democratic leadership. But one precondition that never went away was shared by almost every democrat in the senate was the demand that republicans swear off the use of budget reconciliation before any real bipartisan discussions take place. Ef 45 democrats signed a letter in august stating that the public abandonment of budget reconciliation was in their words a prerequisite to any bipartisan ach reform effort. Essentially our colleagues demanded that we empower them to kill any potential tax reform bill. Before they even begin talks. Thats not the kind of statement one usually hears from someone who wants to work in good faith toward shared goals. Its also at odds with the history of the senate. Over the years, the senate has moved many tax bills through reconciliation and in almost all cases, the bills ended up getting votes from both parties. Reconciliation in no way precludes the possibility of bipartisanship and republicans were prepared to follow a similar route with this particular process as was followed in previous tax bills and budget bills. So just everyone is clear, so everyone is clear, it was the democrats own preconditions that kept them from engaging on tax reform. There was an open seat at the negotiating table. They collectively close not to sit on it. Another claim i expect to hear is that our bill is a massive tax cut for the socalled rich. Thats always the claim of democrats. This claim of course, is false. Under the bill, the top rate will be donned by roughly 1 percentage point but the bill repeats a number of tax credits and deductions many of which disproportionately benefit the wealthy meaning that the slightly lower rates will apply to a larger base of income. The joint committee on taxation produced a distribution table than clarifies a number of key points, including the fact that americans at all income categories will receive a tax break under our bill with the middle class getting a larger percentage of the reductions. The joint committee on taxation also found that our bill will not shift the tax burden from the high end on to taxpayers down in lower brackets. In fact, according to jct, those with incomes can of 1 million a year or more will see their share of the overall tax burden go up. So while the bill lowers rates across the board, it actually increases the share of taxes paid by those earning 1 million or more in annual income. Let me just say that again. Our bill increases the share of the overall tax burden paid by millionaires and billionaires. Let me address another jct analysis that includes more good news. Some of my colleagues have latched on to a jct table showing that some percentages of taxpayers in the individual cohorts will see their taxes go up under the bill. I believe the talking point is that 13 million families in the middle class will see their taxes go up next year if the bill becomes law. Lets set aside the fact that it is virtually impossible to create a tax plan that will impact every taxpayer the same way and lets assume for the sake of argument that my colleagues estimates which include virtually no context are correct. Even then the critics of our bill are missing the forest for the trees. They would have the American People believe that he the real story is a relatively small minority of taxpayers could see a slight increase in their taxes with the biggest proportion of overall increases going to upper middle class taxpayers. But to do that, they have to obfuscate the fact that under that same jct analysis, about 90 of those same middle class taxpayers are getting a tax cut at the very least, theyre held harpless under our plan. I know my colleagues prefer to label any republican tax proposal as a massive tax cut for the rich but that is not the case here. Our bill is primarily focused on tax relief for middle and lower income taxpayers. And the analysis by our nonpartisan congressional score keeper has confirmed that the legislation weve crafted accomplishes that goal. Im sure well also hear more about tax breaks for big corporations under the bill. Yet, i would think that anyone who has previously gone on record in support of lowering the Corporate Tax rate will refrain from attacking this bill for doing just that. Of course, i wont hold my breath on that. But if that simple baseline of intellectual honesty were to be observed in this markup, most democrats on this committee would be unable to criticize our effort to lower corporate rates as most of them have endorses a similar approach in the recent past. Im sure well also hear about the death tax today, but i hope with that discussion well get an explanation from some of our democrat colleagues including my friend the Ranking Member why they are so critical of our efforts to simply mitigate the impact of the death tax when they voted in the past to repeal the tax entirely. I also hope stlael an explanation for americas farmers and businesses for why their deaths should be considered a taxable event when they choose to pass their lifes work which has already been taxed at least once already to the next generation. Another matter that well likely hear about this week is the state and local Tax Deduction. Im sure a number of our democratic colleagues will argue that the deduction is an absolute necessity. I plan to ask them, why they want to forego middle class tax relief in order to preserve a Tax Deduction that overwhelmingly benefits the taxpayers at the very high end of the income spectrum particularly after theyve been publicly lamenting the very idea of cutting taxes for the socalled rich. I could go on here, but i think my overall point is pretty clear. So far, weve heard a number of attacks on our tax reform bill that just cant withstand much objective scrutiny. Once again, objectivity isnt really in order these days. At this point, one thing should be clear. Our goal with this effort is to provide tax relief and bigger pay collects to low and middle income families and to make america a better place to start and grow a business. There are many in the middle class who are have fet left behind in the sluggish economy under the previous administration. And they feel that they are not being heard. We have an opportunity this week to show that we are listening, that we will act to get the economy moving again, to provide better wages, more jobs, and new opportunities for individuals and families in america. We can act by reforming our broken tax code in a manner that will provide a growing economy for the benefit of all americans on tax relief targeted toward the middle class. I want to once again thank all of my colleagues for their work to get us this far. I have more to say about their individual efforts in the coming days. But before i conclude, i do want to note something that a few observers have recognized. Namely that the mark as originally introduced leaves us with some work to do in order to make the reforms permanent particularly on the business side where job create kers feed to be able to plan many years into the future. We are, of course, aware of this problem and are working to ensure that the reduced rates and additional reforms designed to bring investment back to the United States and create our design to bring investment back to the United States and create more american jobs. These jobs will remain in place past the tenyear budget window. Theres no real pause for concern at this point but i do want to make clear shah were looking at a number of alternatives that will fill the necessary gaps and we have every intention of making the business reforms permanent. Now, with that, ill turn to my good friend and colleague senator wyden, the Ranking Member, for his opening remarks. Thank you very much, mr. Chairman. And mr. Chairman and colleagues,ing what started out as a promise of a significant middle class tax cut has become a multitrillion dollar bait and switch. A massive handout to Multinational Corporations and a bonanza for tax cheats and powerful political donors. For millions in the middle class, this will not be a tax cut at all. It will be a tax increase. So while corporations are celebrating being lavished with a holiday gift of trillions of dollars in tax cuts, middle class families will have to hope theyre lucky enough to avoid a tax hike. They certainly cant afford. The fact is, there is a massive gan between the republican rhetoric surrounding this bill and the reality of what is on paper. The rhetoric has made this bill out to be lasting and substantial tax relief for everybody in the middle class. The reality is, it is neither lasting nor substantial. So in the last few days, the baseless talking point about and across the board guaranteed tax cut has been weighed down with a whole bunch of washington lingo. The new line is, this bill has always been about cutting taxes on average. On average across a variety of income levels. Anybody whos had a bad experience with a used car dealer ought to recognize that that kind of careful hedging is usually covering up one nasty surprise. Now, for the middle class, the bill goes wrong right out of the gate by eliminating the state and local Tax Deduction. State and local taxes are how communities pay for firefighters, how they pay for police and schools and roads and bridges. Americans get to deduct those taxes because of a longstanding principle that says the goust shouldnt reach into their pockets twice to double tax the same earnings. The bill republicans have on offer throws that are principle in the trash can. Now, some republican lawmakers and supporters of this bill want to say this is just a red versus bluish. As if it is okay top of knowingly harm people just because they take a different view of policy. But the red versus blue justification simply does not hold up to the facts. It is not just oregon, california, and the northeast that are going to take a hit if the state and local deduction goes away. Its also going to be millions of people in wisconsin and arizona, georgia, the carolinas, and a lot of places across the country that pulled the lever for republicans last november. This proposal specifically targets communities where the American Dream has sparked an Economic Growth and created opportunity and help more and more people become middle class. So eliminating the state and local deduction isnt about smart Economic Policy. In fact, it is sure to leave many communities worse off. Now, republicans didnt have to go down this road. But because they insisted since day one that they ought to use the most partisan process in washington known as reconciliation, theyve got to squeeze several trillion dollars of tax handouts and corporate goodies into a 1. 5 trillion box. That means telling the middle class in america to pay up. At its core, this plan perpetuates what is most rotten and unfair about the american tax system. The reality is, there are two tax systems in america. Theres one for the cop on the beat. And the nurse in the emergency room. For them, the system is strict. Its compulsory, and their taxes come straight out of every single paycheck. Then theres another set of rules for the powerful, the well connected and the Multinational Corporations that have armies of tax lawyers and accountants. Those folks can pretty much pay what they want when they want to. The proposal before the committee does nothing to fix that imbalance. In fact, it worsens the division and enswrinz the sources of unfairness that leave so many hard working americans feel theyve been kicked in the gut around april 15th. Americans are sick of watching corporations ship jobs overseas, abuse unfair loopholes and shift their. Thes to fake headquarters on zero tax islands. But this bill essentially tells those corporations, you have been putting in lot offices work chasing a rock bottom tax rate so lets go ahead and move the starting line even closer to zero. Even worse, the massive giveaway is just one part of the story when it comes to the Multinational Corporation side of this bill. Under this republican plan, Multinational Corporations will get an even bigger reward for doing business overseas than theyll get for creating red, white, and blue jobs here at home. Imagine, colleagues can, how thats going to sound to the residents of forgotten mill towns or cities where the main street is boarded up and the be factory lights dont come on anymore. There are too Many American who have lost jobs that paid middle class wages and had to scrape together work wherever they could get it just to make ends meet. They are tired of watching the same pattern over and over again. And those who have waited decades for a meaningful raise deserve better than to see corporations reward than to see congress reward corporations that flee the United States. It shouldnt come as a big surprise that the ideas ive described are a tough sell. But in another return to the old playbook, the administration and republicans have cracked out trickle down fantasy math to justify these corporate handouts. Theyre making big promises about record wage increases. Economy kicking into high gear. The tax cuts paying for themselves. But there is no trustworthy independent analysis or historical record to back up those claims. Treasury secretary mnuchin even claimed that the tax handouts wouldnt just pay for themselves, theyd raise an additional 1 trillion on top of their cost. How he came to that conclusion remains a mystery. Ill tell you, it sure sounds like a lot of hocuspocus arithmetic. The treasury secretary also scrubbed from his departments website a recent analysis that said corporate shareholders, not workers, are the overwhelming beneficiaries of tax cuts. And if youre tired of the political back and forth on this one, you dont need to listen to lawmakers. Listen to the corporate heads themselves who are talking about the investor calls theyre making. Theyre already previewing plans to turn their tax handouts into stock buybacks and other shareholder goodies not the new jobs, not the big wage increases republicans have been promising. You dont have to take my word for it. Look at what the corporations are saying on those investor calls. So the millions of americans who face a tax hike directly caused by this bill will only be its first victims. The hard working people whose jobs are sent abroad because of this bill are going to become victims later on, as well. And now im going to turn to the threat of exploding deficits. Id wager that the republican deficit hawks who steam fly away when this 1. 5 trillion bill was proposed are going to come flying back once its enacted and the deficits pile up. Members of the administration and Top Republicans in congress have already said that i spi entitlement reform is going to be up after taxes. Folks, lets be clear. That is washington speak for going after medicare and medicaid and social security. And its an owed game plan run up a big federal deficit and then insist that theres no choice but to force draconian cuts to the social safety net. As americans, we have seen this movie before. The first big legislative push after the bush tax cuts was an attack on social security. Fortunately, it was stopped. Might be a lot harder this time. If those cuts to our safety net programs happen, you can add seniors and many of americas most vulnerable to the list of victims of the bill. I want to close with a comment on ot process which i consider to be a farce. And i was struck by the chairman saying that democrats could have been at the finance tax table. Colleagues, lets be clear. Nobody on this side even knew where the finance tax table was. We werent invited. We never knew where it was. Now, i see some in the majority now saying that theyre faced with a choice between this unpopular tax bill and looking like they wont be able to be govern. I want to be clear. I dont think those are the only options on the table. They sure werent the only options when Ronald Reagan and a big group of democrats came together to pass tax reform. Talk to bill bradley about it, one of our former colleagues. Best jump shot in the history of the Senate Finance committee. And ill tell you, they werent the only options. Looking at an unpopular tax bill or say he cant govern. When i got together with two respected senior republican senators judd gregg and dan coats, now a member of the president s cabinet. So theres still an opportunity to work on a bipartisan basis. Just the way Ronald Reagan did. It means sitting down and spending the necessary time to make sure by getting ideas from both sides that you havent hurt the middle class. It means democrats and republicans talking together instead of relying on partisan trickery to speed a secretive bill to completion before anybody really catches on. Nobody has got to wave the white flag of surrender and just pass a partisan process and a partisan bill in order to avoid an unpopular bill. Now, twice ive had a chance to talk with Democratic Senators and administration officials. Both times my democratic colleagues and i made clear that we agree with republicans that the tax code is a rotten, broken mess. We expressed our desire for bipartisan reform. And we made it clear as we have now for months that we want to work with republicans to do tax reform done right. The message we delivered was that is real bipartisan reagan style tax reform could pass with 70 or 80 votes. Maybe even more. It could make the tax code a whole lot more fair, put money back in the pockets of middle class families and bring on a wave of new red, white, and blue jobs. Even before those meetings, democrats shared with republicans our principles for reform. A focus on the middle class, a focus on fiscal responsibility, and a focus on protecting medicare, medicaid, and social security. Twice, colleagues, in recent weeks, the president has said hes for those principles. But the fact is, those principles have not been written down by the congress on paper. Whats on offer is a rejection of the bipartisan approach. The bill before the committee has been in the public view less than four days. It came out in fact, just as veterans Day Celebrations were kicking off. This weekend, while i was marching in a parade in albany, oregon, i looked for places to make a few quiet calls to washington to get the latest details. And im sure my colleagues were in the same boat. There has not been nor will there be, based on the process at this point a single hearing on the details of this proposal. Im sure somebodys going to say the committee can have a full debate right now, that this is our opportunity to hash out our differences and work on tax reform. But lets be clear. That is not the way Ronald Reagan did it. That is not what they did when they spent months with top reagan officials going back and forth with democrats like bill brad throw talk about specifics, talk about detailed provisions to make sure particularly the middle class and Small Businesses wouldnt get hurt and that they would pass a bipartisan bill that would give everybody a chance to get ahead. Whats going on now in the Senate Finance committee is an abandonment of the reagan style tax reform process. The first votes are just around the corner. And this bill is going to go through a lot of contortions is in the days ahead. But i think we ought to be clear that as of now, the contortions are going to be about the same bottom line. Getting the biggest possible corporate handout on a strictly partisan basis through the senate. The bill has the power to reshape the American Economy in ways that will leave a lot, and a lot of americans worse off. It is going to raise taxes on millions in the middle class. It will give american Multinational Corporations more relief for doing business overseas than they get for doing business in our country. I dont believe its a radical desay the committee ought to take the time to consider these consequences before we start voting. There is bipartisan agreement that the tax code is a broken mess. So instead of the partisan process that will force middle class families to pay up to finance a handout for the multinationals, it is not too late to do this right. Thank you, mr. Chairman. The opening remarks from Senate Finance Committee Leaders orrin hatch and ron wyden. Senate republicans released their tax reform plan last week. And you can find the bill and the Senate Finance Committee Summary at cspan. Orgs congressional chronicle. The complete returns tomorrow at 9 00 a. M. Eastern to begin going through the measure and well have live coverage here on cspan3. On thursday, the house is expected to debate their own tax plan on the house floor anticipating passage by the end of the week. As Senate Leaders have said theyd like to pass their tax reform package by early december. After that, Republican Leaders will need to combine the house and senate bills with the hope of sending the legislation to President Trumps desk by christmas. Right now, back to todays hearing beginning with Opening Statements from iowa senator chuck grassley. Ing. Senator grassley. I want to thank chairman hatch and his staff for their tireless work in putting together the chairmans mark. When i do that, i think i speak with some authority on the point that it takes a lot of the work to put it together because i chaired this committee at one time when chairman baucus was the Ranking Member. And we operated under the same reconciliation process thats being discouraged at this particular time and we put together a mark to cut taxes in 2001 and did and we were able to, through the hard work of my staff and the hard work of senator baucus staff put together something that got 25 of the Democratic Caucus to vote for. So bipartisanship is very much au opportunity under reconciliation. So we now have a once in a Generation Opportunity to modernize our tax code in a way that will provide significant middle income tax cuts. While making the tax code simpler, fairer and more pro growth. At the heart of this legislation is making good on a commitment to enact significant tax cuts for middle income taxpayers. On average, middle class families will see their tax bills shrink by nearly 1500. Their Child Tax Credit will increase from 1,000 to 1650. Which will help ease the financial strain for working families. By nearly doubling the standard deduction, many lower income taxpayers will be removed from the tax rolls entirely. Moreover, the tax Filing Season will become much more simplified for millions of americans. Small businesses will also see significant tax cuts from the rate reductions on the individual side but also from innovative passthrough business income deduction. This tax relief willive senty advise investment back into the business creating jobs and spurring Economic Growth. With Small Businesses responsible for a majority of new jobs, this is a crucial component of the pro job pro growth tax framework. The chairmans mark will also bring our Corporate Tax structure into the 21st century. Our high Corporate Tax rate, and outdated worldwide tax system has put American Companies at a real competitive disadvantage globally costing american jobs. Our Corporate Tax system has been strained to its breaking point as we have battled corporate inversions and foreign takeovers without action, we can expect this trend not to only persist but to grow in the coming years. I know my democratic colleagues have expressed concerns that were moving too fast. But we have been discussing tax reform for years and the time for action is right now. The good work on the part of both republican and democratic chairmen of this Committee Past have helped lay the groundwork to get us where we are today. I also understand that our democratic colleagues have vehemently objected to the use of reconciliation but past practices of this committee prove reconciliation does not have to be synonymous with partisanship. I know this from experience. And ive already referred to my work with chairman baucus and also Ranking Member baucus. The result of that we passed reconciliation legislation out of this committee with strong bipartisan support by an a vote of 135. So there is no reason for this to have to be partisan process today. I yield. Senator cantwell. Mr. Chairman, ill try to do my best but this is pretty important legislation. First i want to say, i dont agree with many of the president s economic strategies. I dont believe in his notion of fear and isolationism. I dont believe in his notion of discussing things that are going to start trade wars. I dont believe in his lack of support for a functioning Export Import Bank that will help u. S. Manufacturers build products and seek homes and find their acceptance in international markets. I dont support his notion that the ferc ought to mandate that consumers in ohio or pennsylvania or kentucky pay higher electricity rates by forcing them to adhere to purchasing coal because he wants to bring coal back. And i dont support his notions of cutting invasion in r d in various sectors of our economy. I sure dont think you have to apply the same kind of ferc logic on coal to oil and say that the only way that amazon or microsoft can get a tax break is if we destroy the great wilderness of the arctic wildlife refuge. So no, i too had high hopes for what would be a discussion about our Corporate Tax rate having Many Companies in my state that have to compete on an international basis. I hope that we were going have that discussion. When my colleagues on the other side of the aisle said it needed to be deficit neutral i listened. I said okay, this is interesting. When we said they are going to close corporate loopholes to pay for a corporate rate reduction, i listened. And i thought, well, maybe this is where were going to go. Were going to sit down in a collaborative fashion and Work Together and mr. Chairman, you and i do have a good working relationship. But the notion that the president had a meeting of the finance members to cop down to the white house and i wasnt invited because i happen to represent a state that he didnt win is a ridiculous idea. So the notion that where we are today and my main objection is that instead of doing those things that we talked about on the Corporate Tax rate, looking at some of these things like carried interest or like in kind exchanges or the fact that golf courses get tax breaks, instead a big clunk of this bill is being paid for on the backs of middle class families by taking away their deductions. Their local sales Tax Deduction from a state like mine that doesnt vin an income tax, from their property taxes not being able to be deducted or the mortgage deduction and i know theres differences between the house and the senate bill. But this isnt simplify indication of our tax code. Its simply raising taxes on middle class families in my state. And its raising taxes on millions of americans across the United States to give a break to the corporations. So its a very different structure than we talked about. Now, most objecting because mr. Chairman, you and i have worked very hard on trying to make more affordable housing, but by getting rid of these deductions on property taxes, on home mortgage, the notion that youre getting rid of private activity bonds in the house legislation and that youre making changes to the low income tax credit in this senate bill is just making it housing more expensive. At a time when we have a Record Number of americans who are in unaffordable housing situations. So i look at our challenges and i know that you some of our colleagues talks about the Small Business corporate Small Businesses getting. Its so complex. Its so challenging. I dont know what Small Businesses are going to benefit from this. So mr. Chairman, i hope that we can slow down. The reason i mention the housing and i will wrap up is that housing used to be 15 of gdp. In the few hearings we did have on this, now its only 12 of gdp. This billy know you think this notion of returning investment from overseas not a bad idea. Something we could talk about. But we are just returning it and its going to go into the dividend pool. Theres nothing in there that says it should go to infrastructure investment. Theres nothing in there that says it should go for roads or housing or even job training. I can guarantee you its not worth giving a tax break to corporations if you cant find a qualified workforce or they have to live an hour and a half away because housing is so expensive. Mr. Chairman, thank you for the additional minute. I think five is a very good target and i appreciate, i hope well slow down. I hope well have the courage to Work Together in a regular order process. Thanks, senator. Senator crapo. Thank you, mr. Chairman. Everyone here has heard me say. Times that if we had tried to, we probably couldnt have created a tax code that is more unfair, more complex, more expensive to comply with, or more anticompetitive to our own American Business interests than the code were working on. And finally, we have an opportunity to move forward with meaningful reform. And once again, the attack is made that its just an effort to try to raise taxes on the poor or the middle class and cut taxes for the wealthy. Rhetoric is flying all over the place. Lets just look at some of the facts. We all have in front of us or should the distributional charts that have been put out by our own tax writers and assistants. The jointtach committees distributional reports show that taxes will go down. The amount of taxes in dollars will go down for every single income category in america. And if you look at these distributional charts, you will see that the largest percentages of reduction are in the lower and middle class income categories. The same charts also show that the average tax rate will go down for every single income category in america. And once again, a greater percentage of reduction for those in the lower to middle income categories. Yet, we will continue to face the attacks that what we are doing is trying to raise taxes for those in the middle and lower income categories so that we can feather the nest of the wealthy. The opposite is the case. If our tax reform can save millions of additional lower and middle income families from having to save their receipts and dig them up each year again at tax time, dont tell them thats not a meaningful benefit. If the simplify indication of our tax code can further save those lower and middle income families from the need to potentially pay hundreds of dollars can a year for someone estoes prepare their returns because the code is complex, dont tell them thats not a benefit. If every single bracket of income earners in america gets a tax reduction and the biggest percentage of tax reduction goes to those in the middle and lower income categories dont they will them that were raising their taxes. If pro growth effects of making American Business more competitive around the world can result in higher wages and more Job Opportunities for lower and middle income families dont tell them that we are feathering the nest of the wealthy. The reality is, we are going to address the true problems with our tax code and it is going to help all americans have a stronger healthy america, a stronger family, stronger wages, better growth, and an ability to Start Building ourselves out of our fiscal crisis. Theres another very important effect of comprehensive reform theyve got to fully explore. Some have suggested that our current fiscal situation means it would be irresponsible to do any kind you have tax reform that increases the deficit on a static or current law basis. Actually, the opposite is the case. This is precisely the time we need to focus on the dynamic opportunities for growth in our economy. On our current path and our own cbo analysts told us, if we dont change our course, we will see our rate of growth in this economy stay at its stagnant level of below 2 . And other analysts have said that if we will take a dynamic approach to fixing this broken tax code and making ourselves more competitive, we will see rates of growth that could significantly increase. Again, helping not just individuals and families but helping this nation become much more competitive economically. I see that my time is running out. I had some charts and some analysis here to go through. I guess ill do it at another time when we have an opportunity to discuss it. Mr. President , its time to fix our code. We know longer need americaing to have the most complex, the most expensive and the most anticompetitive code in the world and one that pushes down our own citizens ability to grow and achieve their American Dream. Thank you, senator. Senator bennet. Thank you for the opportunity to make an opening statement. When i left washington last thursday hardly anyone had seen the republican tax plan and one Holiday Weekend later, we are now here marking up the most consequential tax policy in 31 years. With no hearings. Not a single hearing on the legislation. Mr. Chairman, America Needs tax reform. I join the finance committee because i believe that. We havent reformed our tax code since i was in college with a smith corona typewriter. Our economy has transformed since then. But our tax code remains froze innocent past. We should clean up special interest loopholes. We should help our businesses compete in a global economy. We need comprehensive and bipartisan reform. But in a break with the tradition the committee has made no serious attempt to bring both sides together. Instead, the majority wrote a deeply flawed proposal that he adds 1. 5 trillion to our debt. In 2014, a republican member of this committee wrote it doesnt take a mathematician to see we are sitting on a ticking time bomb of debt. Another said our nations growing debt is cost cog us jobs and Economic Growth today, and it is an unfair burden to pass on to our children and grand children. I agree. And i think its important in this context to review how bearrived at this point. In 2000, president clinton left a 5. 6 trillion projected surplus to his successor. At that time, Congress Held hearings how to invest in our future and pay down our debt. Some members of the senate were here for that. Then president bush on the same argues that were hearing today signed two major tax cuts one of which was after we invaded iraq and prosecuted two wars without paying for them. Then he signed Medicare Part d without paying for that. A number of people voted with president bush on all of those steps who are still here today. When president obama came to office in 2009, he inherited a collapsing economy and a 1. 2 trillion annual deficit. Then amidst the worst economic crisis since the great depression, a lot of Republican Leaders all of a sudden remembered their fiscal conservatism citing the debt nearly all of them opposed the economic recovery pag to stabilize our economy and save millions from unemployment. Over the next eight years, despite bipartisan efforts to rein in the debt, leadership consistently rejected a balanced approach. As a result, rather than confront our fiscal challenges washingtons taken the easy path by cutting investments in our future, in education, research, innovation and infrastructure while at the same time burden our future withtarilyions more in debt. This should seem deeply unfair to americans in their 20s and younger to know that we are investing less in them than our parents and grandparents invested in us. And then we have the nerve to say you need to pay back the debt that we accrued investing in ourselves. For years, republican members of this committee have raised alarms about our debt. I believe they are sincere. But i struggle to comprehend how they can square that view and support their plan. As our debt grows, we will spend billions more not on schools, roads or invasion but on interest cost. Were about to blow another hole in the debt without helping the middle class which is what makes it even worse. By 2019, the senate plan would actually raise taxes on 19. 4 million households earning under 220 2,000 while providing no benefit to 54 million households. When deficits swell as they surely will, cuts to medicaid and pled care are sure to follow. Further burdening working families struggling to make ends meet. That is not what the American People want. We need to stop this and right write a bill worthy of this committee. Thank you for allowing me to take a few additional seconds. Senator roberts. I want to thank you, mr. Chairman, for your leadership and your perseverance and your patience. In laying down this mark and for the staff, as well. It is abundantly clear that the complexity antiquated Corporate Tax system act as a break on our economy that directly affects the jobs and wellbeing of allamericans. We have before us a comprehensive plan to address these issues cleaning up and modernizing the tax code to help generate more growth. The bill before us does exactly that. Providing meaningful tax relief for families and Small Businesses. I am especially pleased with the rates the legislation would go put into place on the individual side. We have done a good job pushing these rate reductions down to lower and middle income families. This would provide a net tax cut for familiesness kansas of about 2500. We accomplish this by reducing individual tax rates, raising the standard deduction and increasing the child credits in the tax code. I want to turn to agriculture. I am cleesed that the chairmans mark reflects the importance of agriculture to our economy. The agriculture industry has a number of provisions in the tax code that recognize the uncertain and volatile nature of the income associated with farming operations. Farmers have no control over the weather and face highly unpredictable markets. That is true today. This is the thirds year of depressed prices and tighter credit. They also face under the critical and linked issue uncertainty in trade policy. A policy that is still very much a work in progress within the administration. I am happy to say that this chairmans mark keeps the ag tax provisions but will also help farmers by creating a much more pro growth tax system, lowering the tax burden and simplifying the tax provisions relating to our agsector. For the average naerm kansas, the rate reductions more rebust depreciation rules and the new structure for pass through entities will enable that farmer to put significantly dollars in his or her bank account, money which can be used to build their businesses enabling them to meet the challenges of troubled and hungry world. This legislation also transitions our current International Tax system to a territorial system. This is particularly important because it will address concerns i have long had with the International Competitiveness of our Corporate Tax reform. I have real concerns that the current archaic International System has made our Home Grown Companies targets for takeovers by foreign competitors leading to job loss, not to mention the drain on our federal treasury. Now, is this a perfect bill . By no means. But it is a very good bill that i firmly believe will lead to more Economic Growth. Mr. Chairman, through the process you have laid out, we can improve this good bill to make it the very best bill under very difficult and partisan circumstances. Thank you. Thank you, senator. Go to senator cornyn at this time. Mr. Chairman, thank you for the excellent job youve done spearheading this effort. Its a culmination of years, as you point out, years of work by the committee, including 70 hearings on how the tax code can be improved and streamlined to work better for taxpayers. We can also recall the ten option papers issued as part of the blank slate approach launched in 2013 to scrub the tax code and produce policy solutions to modernize it. Many of us expressed, including here today, outrage at the use of reconciliation to provide tax relief to millions of americans. But this process argument should not be a reason why bipartisan support shouldnt be reached or cannot be reached. In fact, the last 15 reconciliation bills that were signed into law, of those 15, 12 of them had bipartisan support in the senate for final passage of the conference report. And when i hear our democratic colleagues say that they werent included in the process, that was their choice. They simply walked off the field. They are really just complaining about the fact they cant take their ball with them. In many ways, though, the tax cuts and jobs act is already a bipartisan bill. At least in some of its most significant aspects. Democrats say they want tax relief, too. Former president barack obama, the minority leader, and a number of the members of this committee have also repeatedly called for lowering the Corporate Tax rate in order to make our goods more and businesses more competitive in a global economy. Now, the Ranking Member in effect calls it a handout. This bill does lower the corporate rate, as barack obama and Chuck Schumer and others have called for in the past. And the Ranking Member has on a number of occasions highlighted his bipartisan reform plan, which proposes to increase the standard deduction for millions of taxpayers. Well, this bill does that. Theres also room for further agreement. If our friends across the aisle want to quit complaining and would like to join us in helping middleclass americans, middleincome americans pay their bills and save for retirement, we would invite them to do so. This is that opportunity. They should join our tax Reform Efforts and help americans keep more of the money they earn in their pocket so they can spend it the way they see fit. Finally, this legislation includes a number of commonsense proposals that will simplify the tax code, reduce complexity, and make the system fairer. We like these ideas because as our colleagues have suggested, these provisions will enable us to lower tax burdens on Small Businesses and working families who deserve a fair shake in the tax system. Thank you, mr. Chairman. Thank you. Senator portman. Thank you, mr. Chairman. Look, this is an exciting opportunity because our tax code is so broken, and i have heard from my colleagues on this side of the aisle, and they all seem to say the same thing, which is this is a mess. This tax code, which hasnt been reformed in any substantial way in 31 years, is desperately in need of an overhaul. And they also support middleclass tax cuts which is what is going on here. So we should try to Work Together. I remember the working group that i cochaired. I remember sitting in on a lot of those 70 hearings we talked about. We had five working groups, by the way, and they were all bipartisan, and the working group where cochaired was on international. We said two things, we have to lower the business rate so its not the highest rate in the world, because until we dethat, youre going to continue to see jobs and investment go over seas. We have to switch to an International System that keeps us up with the rest of the world so we can be competitive. That means our workers arent competing with one hand tied behind their back. Thats what this does. Now, there might be some specifics where we have some disagreements, but i have to tell you, this has never been partisan before. It was part of the simpson bolls commission. So my hope is that on these proposals we can achieve a level of bipartisanship and we can actually get this done because it is so needed. So critical. By the way, back in 1986, last time we reformed this tax code, pete rose was still playing for the cincinnati reds. Thats how long ago it was. When we did the international side, it was back in the 60s. The International Code could qualify for aarp benefits, its so old. We need this desperately. I heard a lot of talk today about middleclass tax cuts not being in this proposal. I gotta tell you, theyre here. Thats what all the analysis says. In ohio, were going to see a cut for middleclass families, theyre going to see tax relief thats significant. Were told that the median Family Income in ohio is going to see a tax cut of about 2,400 a year. I was asked in the hall by some reporters, well, why is that meaningful . Its meaningful because a lot of people i represent are living paycheck to paycheck. This will help with the car payment, to save for vacation, to save for retirement. Its really important. And my democratic colleagues have claimed that somehow thats not real tax relief when we say nationally the number is about 1,500, thats a 40 cut in peoples taxes. For the single parent income of about 41,000, median income, its about a 55 reduction in federal income tax. Thats significant. So its in here. But dont believe me. I know everybody believes the media, so lets see what politico has to say. Middle class biggest winners in senate tax plan, study says. Guess what the study is . Its from the nonpartisan joint committee on taxation. Theyre here today. Theyre the ones who do this analysis for us. We dont always agree with them, but boy, theyre not partisan, i can tell you that. Heres their distribution tables. We all have them. Theyre public now. You can go on jct. Gov. Heres one right here. What this shows is the middle class tax cuts are real. People are talking earlier about the firefighter making 50,000 to 75,000 a year. 18 billion tax cut in this package for people between 50,000 and 75,000 a year. Tax rate goes down under this proposal, it goes from about 14. 8 in tax to an average of about 13. 7 in tax. Again, these are the real numbers. Take a look at them. Go online yourself and take a look at them. And youll see that every single income group in the middle class gets a tax cut. Again, its meaningful and substantial. But let me finally say that i think watts going to be just as meaningful and maybe more meaningful for most of the families i represent is the fact theyll be able to have a better job. Thats why we have to reform and revamp this International System. Outrageous that we currently have jobs and investment going overseas because of our tax code. 4700 companies, according to a recent study by ernst and young, would be American Companies today if we had this kind of a code in place over the last 13 years. Instead, theyre Foreign Companies. Three times as many u. S. Companies are bought by Foreign Companies as u. S. Companies buying them. Why . Because of our tax code. We should be outraged by that. Its our responsibility to fix it. No one else can. And by the way, who gets hurt . American workers. The Congressional Budget Office, another nonpartisan group, said the workers in america have lower wages and lower benefits because of this broken tax code that weve got to fix. Thats what this proposal does. Again, its consistent with efforts that have been in the past bipartisan. My hope is we can get this done for the people we represent. We can dedo it in a bipartisan way. At the end of the day, lets come together and do something good that actually helps to fix a tax code that everyone acknowledges is broken. Thank you, senator. Senator toomey. Thank you, mr. Chairman. Let me just echo senator portmans one of his points. It is simply an objective matter of fact that this tax reform will result in a substantial middleclass tax relief. You dont have to take any of our words for it. Its been documented. Its part of what we solve for. Thats just a fact. Were going to lower the burden of taxes on the vast majority of americans and the overwhelming majority of working class and middle income folks. But thats not all were doing here. Were also going to make our business tax code finally competitive. And i believe were fixing exactly what needs to be fixed at this time, mr. Chairman. You know, lets remember the eight years of the Obama Administration coincided with the worst economic recovery in american history. President obama got the policies he wanted. Massive spending bills they called a stimulus. Repeated tax hikes. Government virtual takeover of health care. Huge unprecedented wave of new regulation. They got what they wanted. And it resulted in extremely feeble growth. In fact, something on the order of 2 . We were told, just get used to it. This is the new normal. Nothing we can do about it. This is what the American Economy does these days. It couldnt be more untrue. Mr. Chairman, theres enough inevitable about a weak American Economy. Theres enough inevitable about a lack of strong growth. We need to fix whats broken and we can restore the growth and prosperity we have been waiting for. Well, what was broken in this period, one of the things that was broken, and this is well documented, this is not speculative. This is a matter of objective fact. There was a collapse in the growth of productivity. That was almost certainly caused by a growth in the collapse of stock. That combined caused a lack of wage gains. We saw all of it. Were fixing these problems. Were fixing these problems, mr. Chairman, to a large degree. On the business side, were going to lower tax rates and allow for immediate bold deductions of new capital when it gets put to work, when new plants and equipment are bought. People are going to expense that, be able to expense that immediately. What is that going to do . Its going to allow American Workers and business to becompetitive. To be competitive and win in a competitive global economy. And when we encourage and incentivize business to purchase more of the plants and equipment that allows them to grow, were going to encourage enhancement of productivity. Thats how productivity grows. Thats when capital gets put to work. When productivity gains are restored, thats where wage growth comes from. Thats what this bill is going to do, mr. Chairman. And let me say a word about the deficit that some of my colleagues suggested a great concern about a deficit, which i dont recall at the time when they were passing big stimulus spending bill. But heres a fact. This bill is going to reduce the size of our deficit. If this is enacted into law, well have a smaller deficit. Heres why. The tax reform bill contemplates a trillion dollars in foregone revenue relative to the current policy that the federal government is pursuing. So how much extra growth will it take to generate the tax revenue to fill in that hole . And keep in mind what a profound restructuring of the tax code this is. The answer is, according to joint tax, less than four tenths of 1 of Economic Growth. Now, if youre in the camp that believes its not possible for america to have strong growth anymore, if thats your camp, then you should be very skeptical about that. I am not in the camp that believes american Economic Growth is a thing of the past. I think its entirely possible for us to have Economic Growth that will exceed by far the four tenths of 1 it will take to completely fill in this hole. So mr. Chairman, i want to commend you for your work. Im looking forward to getting this product finished. Were going to lower taxes for middle income taxpayers. Were going to enact the most progrowth business reforms in over 30 years. And in the process, were going to have smaller deficits, and thats going to result in a higher standard of living for the people we represent. So thank you, mr. Chairman. Thank you, senator toomey. Ill now turn to senator lets see whos next here. Senator brown. Tax reform should be about one thing. Putting money in the pockets of working people in ohio and across the country. Thats what the president says he wants. Thats what i want. Thats what most of us in this room want. Unfortunately, thats not what this bill does. Instead, this bill, the Ranking Member said, this bill hands a trillion dollars to wealthy Multinational Corporations, some of the same corporations that have sent american jobs overseas. It asks working people to trust that somehow that money will end up increasing their wages. The only problem is it wont work and it never has. Over the last 40 years, corporate profits have gone up, executive salaries have gone up, gdp has gone up. Worker productivity has gone up. Corporations today have record amounts of cash and the stock market continues to hit recordbreaking highs. But what about the wages and benefits of American Workers who created that wealth . They have been flat and in too many cases, they have declined. If record corporate profits or tax cuts, if record corporate profits have resulted in worker pay raises, why would Corporate Tax cuts be any different . History shows they wont. We have seen this game before. The New York Times recently reported in 2004, Multinational Corporations peddled a similar bill of goods on capitol hill. Gave us a tax holiday, well bring the billions of dollars back that we stashed overseas. Well bring it back to america. Well create 500,000 jobs. Well give workers significant pay increases. Congress, a decade plus ago, bought what they were selling. And in 2005, the times reports that 299 billion did in fact come back from overseas, flowed back into the United States. But the jobs never came. The pay increases never came. Instead, that money went straight into the pockets of Corporate Executives and Corporate Board members and shareholders. In fact, according to the senates own report, the same corporations that took advantage of the tax holiday actually laid off American Workers exactly the opposite of what they promised. The top 15 korgz corporations alone cut 20,931 american jobs. Many of them in my state. At the same time, at the same time those companies, again, they promised to bring the money back to invest, to create jobs and pay higher wages. The same time, those companies increased annual compensation for their top five executives by 27 . Wall street got paid. American workers got cheated. Lets not do that again. The solution is pretty simple. You cut out the middle man. Instead of giving money to corporations, in hoping some of it trickles down into the pockets of working people, lets just give the money, lets just focus the tax cut on working people. If we want to cut taxes for the middle class, maybe we ought to cut taxes for the middle class. Thats how we grow our economy. Thats how we create jobs, not through stock buybacks. Giving money directly to consumers who will spend it at the gas pump, in the grocery store, and the local mall and in the car dealership. On family vacations, at local restaurants. At sporting event. Thats how you build the economy from the middle out. Thats the fundamental difference on the committee from the statements today. You give tax cuts to the rich, it trickles down, and nothing really happens to build the middle class or stimulate the economy. You focus on the middle class, you aim the tax cuts at the middle class, thats how you grow the economy. People like to talk history on this committee. Look at the 1990s. 22 million private sector jobs created during the clinton years when we focused on the middle class. The eight bush years, zero net job increase. In this committee did two big tax cuts for the rich during the bush years. We have a chance, mr. Chairman, to Work Together in a bipartisan way to actually do real good for American Workers. The middle ground is obvious. Instead of blindly dolling out a trillion dollars to Multinational Corporations who send jobs overseas, count on that with this kind of a tax code, and these kinds of tax proposals theyre offering, lets target those companies that actually create good paying jobs in the United States. Thats the Patriot Corporation act. If you keep jobs in the u. S. , if you invest in American Workers, if you pay decent wages and benefits, you get a lower tax rate. But if you send jobs overseas, if you take advantage of American Workers, you dont get a lower tax rate. By targeting tax cuts towards those corporations who help grow our economy, we save billions of dollars that we put directly in the pockets of American Workers by expanding tax cuts for the middle class. Now, corporations, as we know, are beholden to quarterly earning reports, but families dont think in terms of three months earning quarters. Families think in terms of school years, in 30year mortgages. In how many years until theyre prepared for retirement. We need a tax code that does the same, that responds to the needs of working families, not wall street. Its not corporations that drive our economy. Its workers. Its consumers. Its the middle class. So give the tax cut directly to workers, to consumers, to the middle class. We have offered the chairmans comments not withstanding, we have offered numerous times to work with our republican colleagues on this committee. They have put up a sign pretty much saying no thanks. We have offered to work directly with the president. In fact, not long ago, the president of the United States invited all the republican members of this committee to sit with him in the cabinet room. He invited the Ranking Member, sort of thought that would be appropriate, then he invited five other senators, senator mccaskill, senator casey, senator nelson, help me here. Senator stabenow. And me. The five of us, to were not really sure why those five, but maybe well understand it, but during that meeting, i brought up the Patriot Corporation act. You help those companies that do the right thing, that do what the president wants them to do, pay good wages and keep production in the United States. They get a lower tax rate. I handed that bill to him. He said he liked the idea. I also handed him by working familys tax relief act, putting money directly in the pockets of the middle class, he liked that idea, too. Our door has been open. Our door will continue to be open. We want to Work Together to pass tax cuts for working families, for middle class americans. We want to pass a bill that rewards employers who invest in american jobs. Mr. Chairman, lets Work Together to put money directly in the pockets of the American People. Okay, thank you, senator. Lets try to keep within the four minutes. Senator mccaskill. Ill do my best. I believe in reforming our tax code. I believe in cutting down some of the 70,000 pages in the code and making our system more fair and simple. I believe in bipartisanship. And i was so excited when i finally got an opportunity to serve on this committee. The finance committee. The home of bipartisanship. The home of a deliberative process. I actually believed this would be a year that i would get to participate in the famous bipartisan work of the Senate Finance committee. So far, i have been very disappointed. There were no hearings on the health care bill. And now were about to undertake a process that is so important, and we didnt even get a section by section analysis of this bill until 24 hours ago. Three hours before we were supposed to have amendmented filed. And its being done through reconciliation. Mr. Chairman, i adore you. I think youre a good man. And we have worked together and were friends. But i like you, too. Im going to quote you on the floor of the senate. You said, and i quote, reconciliation has become by its very nature a partisan process. And that using the reconciliation process would poison the well for tax reform. Making it all but impossible. Those were your words a few years ago, mr. Chairman. We have not been invited to the rooms where this bill was written. I have been told by some of my republican colleagues who actually wrote the bill, they said, you know, maybe if you went and talked to this senator, i think theyre the ones writing it, or maybe this senator, maybe theyre the ones writing it. Are we really going to begin a markup in the fnls committee when we didnt even get a full 24 hours to look at the sectionbysection analysis before amendments were due . Are we really going to do that . And by the way, the sectionbysection analysis we got yesterday afternoon was different than the description we got on thursday. They werent even the same. I need to know how missourians will be impacted. Im disappointed at the lack of simplification in this reform bill. Real reform means making the tax code more simple and fair. Im worried by the time the process is all said and done, were just going to make it that much more complex. Im concerned about the parity between corporations and regular folks. It appears to me we havent done away with very many loopholes to pay for the corporate rate reduction or business deduction. But boy, we have gotten rid of them for individuals. Think about this. A family of four in missouri that gets a job outside of the city of chicago, they can no longer deduct their moving expenses. But a business in st. Louis who decides to move its company to india can deduct their expenses. How fair is that . Im specifically and most concerned about the changes to the complexity of the new passthrough rules. 95 of the businesses in america are passthrough entities. And were making major changes with a lot of complexity about how theyre going to be treated. You may have had hearings on big subjects or you may have had working groups on big subjects. Weve had no hearings on the specifics of this proposal and how its going to impact missouri businesses. Theres nothing in hereof about the carried interest loophole which we have been talking about for years. Not even mentioned. Why is it not in this bill . Were in such a rush to pass this tax bill with just republican votes that im afraid weve over looked serious consequences for our state. Ill close with this, mr. Chairman, because i dont want to go over. It is now clear in my state that this is going to blow a billion dollar hole in missouris budget. Because theyre hooked. When the standard deduction is doubled for the federal, its doubled at the state level. We have a balanced Budget Amendment in missouri. They are already this year cutting the disabled and the elderly in terms of money that they receive. People who really need the money because of the budget problems theyre having in missouri. I need missouri the government in missouri, the legislative leaders and the governor to tell me where that billion dollars is coming from. Are they going to raise missouris taxes, wiping out the benefits to the middle class in the bill, or are they going to take more money out of higher education, transportation, and payments to the elderly and disabled. We have no idea what those states are going to do. This is not well thought out. We can do this better. I want to work with you. I want to work with republicans. Give us a chance. Thank you, mr. Chairman. Thank you, mr. Chairman. I received a letter from a constituent of mine a couple weeks ago from chester county, pennsylvania. That was a letter that i left with the president after we met with him in the meeting that senator brown referred to. Heres in part what the letter said. It said, quote, why should high income families get a tax break when we will likely when we will likely get a tax hike in the case of his own family. And then he goes on to say, is tax relief for families who never feel a pinch necessary at the expense of those who budget and live responsibly, unquote. Mr. Chairman, i have to echo those words. There is bipartisan agreement that we need tax reform. We need to reform the code. And we need to make it simpler and fairer. Whats before us today, though, is not tax reform that prioritizes the middle class but a tax scheme thats a giveaway to the super rich and big corporations at the expense of some, even many, middle class families. We should be working together on a bipartisan way to raise wages by way of this process. To create jobs for the middle class, but instead, we have before us a republican tax plan that was negotiated and written in secret by special interests in washington and for special interests in washington. Thats likely the reason the plan is being rushed through with little oversight. This partisan bill, which moves around something on the order of 9 trillion in our economy, was released on thursday night. We have been given four days to carefully review over 247 pages of proposed changes to the entire tax code and to understand the potential impact on businesses and residents in our state. Contrast that process with what happened in the reagan years. Number 33 is probably the most relevant. 33 equals the number of hearings on the reagan proposal, the reagan proposal was so detailed it was 489 pages long. 27 hearings on that, and then six hearings on a house bill that went through long days of markup. So a total of 33 hearings either on president reagans proposal or the house bill. What about this bill . Well, according to an assessment we received from the joint committee on tax, about 40 of americans paying between 30,000 and 40,000 a year will see a tax increase or a tax cut of less than 9 a month in the year 2019. This is just on the individual income tax side. The bill also makes significant changes to how and where we tax corporations. This bill could actually encourage, encourage outsourcing. Which would be devastating to families across the board. The senate bill includes a complicated calculation which may actually allow companies who outsource manufacturing to avoid, avoid paying any tax on those foreign profits. At best, and this is being generous, the senate plan would cut would tax foreign profits at a rate of 7. 5 , points less than profits earned in the United States. Let me make three final points, mr. President. One, according to estimates from the joint committee on taxation, Congress Official scorekeeper, at least 3. 8 million middle class households making under 200,000 will see a tax increase in 2019. And finally, the budget resolution which kick started the republican tax plan, cuts medicare and medicaid by 1. 5 trillion. Republicans propose cutting nursing home care for seniors, Cutting Services for individuals with disabilities in the budget while at the same time giving tax giveaways to the super rich. One final question, mr. Chairman, i would ask, is that i wonder if anyone in the development of this bill asked a simple question. What will the impact on children be as a result of this bill . Will this bill make it more likely or less likely that children will be helped . Im afraid that question was never asked. Mr. President , i will submit a longer statement for the record. Thank you. Thank you, senator. Well go to senator heller now. Mr. Chairman, thank you. And thanks for your leadership on this bill. And for your thoughtful comments at the beginning of this hearing. Mr. Chairman, as you know, my mother was a school cook. And my father was an auto mechanic, probably the bluest of blue collars. Yet, they constantly told their six children that if you work hard and play by the rules, youll succeed. If you work hard and play by the rules, youll live the American Dream. Now, i have heard from too many nevadans, too Many Americans who have told me the American Dream is no longer the case. And thats the reason, mr. Chairman, that were here today. For too many people, the American Dream is slipping away. Whether its a single mother that i have heard from in las vegas who doesnt receive child support, works full time, simply trying to make ends meet. I have heard from the entrepreneur in elko fighting hard to get a Small Business off the ground. Wondering whether hell catch a break and be able to hire his first employee. I continue to hear from decent hardworking nevada families and Small Business owners who are struggling to cover their expenses and get ahead in life. And thats because for too long nevadans and americans across the country have faced stagnant wages, slow Economic Growth, under the failed economic policies of the previous administration. As a result of economic policies of the previous administration, wages and workers have suffered. Job creation has suffered. Middleclass americans have suffered. In nevada, we still bear the scars of the failed obama era economic policies. Median Household Income is 7,000 lower today than it was ten years ago. Nevada families are more likely to be living paycheck to paycheck than families living in nearly every other state. And the sad reality is that for most nevadans, the recession has never really ended. And thats why i have been working each and every day with the chairman and for months with my colleagues on this committee to craft the tax relief package that we have in front of us today. Tax relief bill that accomplishes three major goals. Creates more jobs, increases wages, and boosts american competitiveness. A bill that provides real meaningful tax relief to the middle class and to job creators. The tax bill that lets the middle class keep more of their hardearned money, makes our tax code easier to understand. A tax bill that requires less paperwork and puts more money in peoples back pockets. A tax bill that results in more jobs, higher wages and growth in our communities. And a tax bill that significantly increases takehome pay and economic opportunity. Recent studies by the White House Council of economic advisers and Boston University columnists suggest that as a result of this bill that were talking about today, Household Incomes could rise by an average of 3,500 to 4,000. Now, think about what another 3,000 to 4,000 in income would mean to a nevada family that hasnt seen a pay raise in ten years. Middle class nevadans and americans across this great nation deserve a shot to a better life. We now have a president who is willing to work with us and sign meaningful tax reform into law. And its time for this committee to act and deliver on providing truly to middle class taxpayers to reinstate the refrain by my parents that the American Dream is not only possible but will be the reality for those who work hard and play by the rules. Mr. Chairman, thank you. Thank you, senator. Senator thune. Thank you, mr. Chairman. And i do want to congratulate you and your staff for the hard work that they have put into getting us where we are today and to say that it just isnt accurate, you know, the argument that has been made by some of our colleagues that somehow this was rushed upon us. I came on the Senate Finance committee in 2011. Since 2011, we have had north of 70 hearings, 70 hearings, Senate Finance Committee Hearings on tax reform. I have sat through a good number of those. Most of them, i might add, and i dont think theres a single theme thats ixplored in this tax reform bill that wasnt covered in those hearings. And then in 2015, under the chairmans leadership, we created five working groups which examined in great detail every aspect of the tax code. I had the privilege of leading along with senator carden, a working group that looked at business taxation. And staff and members spent literally hundreds of hours diving into the details, the finer points of a lot of these issues, and then filing a report. And making recommendations. There has been a ton of work put in to getting where we are today. And i thank you for that, mr. Chairman. And let me just say, too, that, you know, one of the things that has been a point that has been made here again is this a typical throw hp away line for democrats. That is this is tax cuts for the rich. As has been pointed out by some of my colleagues here, this will deliver tax relief to middle income families. That is an objective and indisputable fact. Youre doubling, nearly doubling the standard deduction, increasing the Child Tax Credit, lowering rates. Middle income families are going to get tax relief from this effort. And boy, do they need it because a lot of American Families are living paycheck to paycheck. In fact, a recent survey had 50 of American Families saying theyre living paycheck to paycheck, and theyre only one crisis or one, i should say, incident away from a financial crisis. So this is about putting more money in their pockets so they can deal with their daytoday issues in their families and allow them to have bigger paychecks and more takehome pay. But secondly, its about growth. This fundamentally is about Economic Growth. Why . Because we have been having these abysmal growth rates for the last eight years of 1. 5 to 2 and the Congressional Budget Office said were going to grow at less than 2 for the next decade. I just dont think 1. 8 , 1. 9 growth is good enough. That should not be the new normal in this country. Weve got to get this economy growing at a faster rate. And what happens when the economy is growing at a faster rate . Well, it means that businesses are expanding and growing their operations. It means the demand for labor goes up when the demand for labor goes up, the price goes up. Whats the result of that . Higher wages. Thats what this is about. Higher wages for American Families who literally havent had a pay raise in nearly a decade. Thats what Economic Growth does for an economy. And we know, we know that tax reform will lead to greater Economic Growth because we know right now that our tax code is completely noncompetitive in the global marketplace. If we dont get competitive in the global marketplace, were going to continue to hemorrhage jobs, hemorrhage companies, hemorrhage profits, hemorrhage investments to other parts around the world. We have to make america an attractive place to invest. If were going to get normal growth back into our economy. And then the issue, of course, has been raised too is about deficits, which i have been here long enough now to know that we dont have 60 votes to cut spending. We certainly dont have 60 votes to do anything about reforming entitlement programs. We probably dont have 51 votes to do anything about reforming entitlement programs. Because we just dont. I mean, i have been here long enough to know, nobody wants to take this issue seriously. Which we have to do if were going to get our arms around making our spending, Government Programs sustainable in the long term. But the one thing we can do through tax reform if we get greater growth in the economy is start to generate more revenue for the government. One percentage point increase in the growth in the gdp will generate an additional 3 trillion over the next decade. In terms of revenue coming in to the government. If we want to deal with deficits, if we want to deal with debt, we have to get growth back. The only way to get growth back in this economy, mr. Chairman, is to start doing the types of things, putting policies in place that are going to make america an attractive place to invest. I just want to thank you for your leadership on this, and ill mention a couple things. The invest act you incorporated into this legislation would simplify accounting rules for businesses, substantially accelerate Cost Recovery for small and medium sized businesses which was a bill i introduced. You also included the gig act and put simply, this is legislation that addresses worker classification by creating a safe harbor for those who want to work as an independent contractor. Those are both important pieces of legislation for small and medium sized businesses. Mr. Chairman, theres i just want to say again, you know, if you look at what were trying to accomplish here, its higher wages, better paying jobs, more growth in the economy, tax relief for middle income families and keeping jobs here in this country. Thats what this exercise is about, and if were going to be competitive in the global marketplace, we simply have to. We have to reform our tax code and simplify it. Mr. Chairman, with that, i will yield back the balance of my time. Thank you, senator. Senatorensy. Thank you, mr. Chairman. I want to thank you for holding this important historic beginning of a markup today to consider tax reform that will boost americas economy, it will create more jobs, and it will leave more money in peoples pocket from their paycheck. And its just the beginning of the process. Once we finish some specific questions tomorrow, well begin the amendments. And its my understanding there are over 300 amendments that have been submitted that can be debated. Thats an opportunity for everybody to have a say in this bill. And thats not the end of it. When it makes it out of committee, it will go to the floor. Theres also opportunity there for amendments. In this process, its for virtually unlimited amendments. After the last amendment is voted on, another one can be put on. Theres a lot of opportunity for everybody to have input into this process. There has to be a structure to start with, and there is a structure here to start with. A lot of things have changed since 1986, but unfortunately, our tax code isnt one of them. Its an outdated mess. And its hurting americas workers and its holding our economy back. Thats why we need tax reform that will not only make the system simpler and fairer but it will put more money in peoples pockets. Simpler that were talking about somebody said we should be able to file on a postcard. One of the young staffers said whats a postcard . Well have to have one screen on an app to take care of most of the people now, but it needs to be simpler, needs to be fairer, it needs to grow the economy to create more jobs and to raise wages. After years of stagnant growth, tax relief for every american is how we can help jump start our economy. Now, under the previous administration, they had this idea that we just did some shovel ready projects, we could stimulate the economy. It would only cost about a trillion dollars. That was a dream. Some of them havent even been spent yet, but it didnt work. The economy went to 1. 9 . Gdp. Thats productivity growth in the private sector. And thats incidentally where most of the money comes from. Thats where most of the people work. 1. 9 . The norm is 3. 2 . And were just hoping that with some change now, a little different approach, this is the approach the president has asked for, that this approach will increase the productivity about. 4 and pay for itself that way. Now, along with tax cuts and fairness, we also need to make our tax system simpler, and by simplifying the code, well insure hard working americans arent missing out on available tax relief. This bill provides relief for small family owned businesses. In fact, thats a major part, thats the passthrough businesses. Thats where most of the jobs are created. We want to make sure that Small Businesses, which currently employ the majority of the private sector in wyoming, that thats the backbone of the communities, and theyll have the opportunity to grow and provide more jobs. I talked to some of them over the weekend. And i think theyre excited about what were doing. If you care about jobs, if you care about American Companies not moving overseas and being able to compete globally, then you also care about changing the business tax. America has the fourth highest Corporate Tax rate. We need to encourage companies to bring back their overseas money to increase the number of jobs. Lowering our uncommonly high and uncompetitive business tax rate would be one of the quickest ways to solve the problem. Its time we make america a more inviting place to invest, to do business, to create jobs, especially in the Small Businesses. One of my longtime legislative priorities has been International Tax reform, which includes efforts to encourage u. S. Headquartered Multinational Companies to bring their money back to the u. S. And create a level playing field. We forced our Multinational Companies to operate with a set of tax rules that are more than 50 years old. I hope we can change that. I look forward to working with my colleagues to pass tax reform that will not only benefit hard working americans but it will make our country stronger. I yield. Thank you, senator. Senator cassidy. Thank you, mr. Chairman. First point to make about this bill is it will be a tax cut for working families in louisiana. For the last decade, those working families have real challenges. Since 2008, we had the slowest economic recovery in u. S. History. Folks back home saw jobs leave, Health Care Costs skyrocket, paychecks stayed flat even as the cost of living increased. Its been harder and harder to work hard, play by the rules, and still get ahead. Americans expect and deserve better. Several more points to make. Tax reform will put the American Dream within reach again by letting people earn more money and keep their money. The bill, again, cuts taxes across the board, almost doubling the standard deduction so that a familys first 24,000 in income is tax free. It expands the Child Tax Credit to 1650 per child. According to the tax foundations analysis, the bill will boost takehome pay for louisiana families by approximately 1,900 a year. More money for groceries, education, retirement, and for raising kids. Imagine what that would mean to families from monroe to lake charles, shreveport to new orleans, it will mean a big difference in their life. Another point, tax reform helps create better paying jobs and increased opportunity for everyone. Now, the current tax code encourages American Companies to move overseas and Foreign Companies to buy American Companies. This bill changes that. It instead encourages companies to invest in the United States. Investment creates jobs. Again, according to the tax foundations analysis, this bill would create more than 12,600 new jobs in louisiana alone. Nationwide, creating nearly a million new jobs. And when theres competition for workers, companies bid up workers wages, and they give better benefits, all in an attempt to recruit those workers. Next point, for louisiana particularly, this job will encourage Energy Producers to make investments in the gulf coast and provide goodpa payin jobs to those workers. This will reenforce americas status as an Energy Super Power with the economic, national security, and geopolitical benefits that come along. Outside of energy, the historic tax credit is very positive for my state. That single provision has supported more than 38,000 jobs and 2 billion in development in louisiana since 2002. Last point. Tax reform is the key priority for President Trump, for republicans in the house, and for us in the senate. Were united in our goal to reform the tax code, cutting taxes for working families. Im proud of the work weve done here, mr. Chairman. Congratulations. I look forward to working with everyone to make it even better. Were going to keep working until we can get the job done and provide louisiana families and workers with the support they need and deserve. Mr. Chairman, i yield back. Well, thank you, senator. We appreciate your work. Senator warner. Thank you, mr. Chairman. And let me also start echoing what senator mccaskill said. I was anxious to get on the committee, spent a lot of time and appreciate the fact in times whether i would stay on or not, you were in my corner, but i have to tell you, sir, im so disappointed by the process. I would like to stay in that corner. I understand that. Mr. Chairman, i would like to get us both back in that corner together. But i just gotta tell you youre doing well. This process, i think, has been opaque. I think it does not uphold the strong bipartisan credentials that you and the Ranking Member have brought to so many issues. And i guess wonder why the majority has kept so much of this secret. As senator mccaskill said, rushing this through with no time. At the end of the day, this is not a bill that sunshine and sunlight is going to help. I think were going to see whether its passthroughs or a host of issues we have rushed through without proper review and appropriate examination. I want to also mention the fact that i know a number of individuals have mentioned earlier efforts in this arena. One that i was proud to be involved in was simpson bolls. Those of us, many of us tried to bring that pass forward. Lets make sure we recall that. Yes, it lowered corporate rates, but it was fully paid for. It even actually increased our revenue flow. Because while our knowledge, mr. Chairman, we do have one of the highest Corporate Tax rates in the world, and we do need to lower it to make it more competitive, you also have to acknowledge the fact that if you look at americas total tax burden, compared to all of our competitive countries around the world, america ranked 31st out of 34. And thats an unfortunate fact that people dont like to acknowledge too often. But if were going to look at how we stay competitive with countries that have much lower corporate rates, we have to look at how theyre generating revenue, and frankly, we havent looked at those to the level it needs of examination. The bulk of this reform does provide business tax cuts. And again, ill acknowledge we need a more competitive Corporate Tax system, but if we look at recent behavior, if we look at recent corporate behavior, theres no evidence that these additional corporate profits will actually translate into higher pay for workers. I would simply point out in the last couple quarters, as much as 95 of all corporate profits have been spent on share buybacks and dividends. Its not transferred down to workers. Also note that balanced tax reform should grow the economy and not national debt. You start with a bogey of 1. 5 trillion that in fact were not going to count. That will add billions of dollars to our annual debt payments. Annual debt payments that are already in excess of 150 billion a year because of the mutually assured destruction we had when we accumulated 20 trillion in debt over the last 70 plus years. Adding more to that, i think, is a huge mistake, mr. Chairman. I know a number of members have said, hey, this is going to provide growth. We shouldnt accept these low growth rates. I agree, but i challenge any member on the other side to show me a time when tax cuts paid for with borrowed money, particularly at moments of near full employment, have led to any type of Growth Numbers that you built into your plan. Dont take my word for it. Alan greenspan said that just last week. Tax cuts with borrowed money, your full employment, will not provide growth. My time is running down. I do hope we will have a chance, and im going to have a series of amendments, for example, i have an amendment that i hope that i would gain your support and others, that said for those companies who are going to get particularly the great rate that you offered on repatriation, maybe there ought to be a requirement for those companies to offer meaningful workforce Training Programs for those low and moderate income workers. Ill offer a plan that senator thune and i worked on to encourage businesses to pay back student debt. I have another amendment to insure that rate cuts would only go into effect if we meet those revenue triggers. If you believe the growth projections, lets have a little skin in the game. Lets have a trigger in case the projections are not met. Im going to exceed my time. I already have. Mr. Chairman, i do hope we get a chance to work on this together. I appreciate your and the Ranking Members leadership. This is way too important to rush through and i hope we can slow the process down so we can get it right. Thank you, mr. Chairman. Thank you, senator. Appreciate it. Well call on senator carden at this point. Thank you, mr. Chairman. Let me start by saying that i am really disappointed that as we start this debate, the two basic principles that i thought members of this committee would embrace are being violated. First, this bill is not aimed at middleincome families. When you take a look at how much relief is given at the highest income levels versus the type of relief in middleincome families, you understand that this bill is aimed at the wealthy. The modifications in the estate tax, the elimination of the alternative minimum tax, that benefits wealthy families. And the joint Tax Committee tells us in 2023, in excess of 10 million families, middle income families, middle income families, will actually pay more in income taxes. So its not skewed towards middleincome families. Its skewed toward business tax relief and highincome families. Why . Because you have eliminated such things as the state and local Tax Deduction. Let me just qualify that. You have eliminated the state and local Tax Deductions for individuals but not for businesses. They can still take their Tax Deductions, just individuals cannot. In my state of maryland, almost 50 of our taxpayers use the state and local Tax Deduction. So thats not fair. If we look at what the house did, some of the individual tax changes are temporary where the business taxes were made permanent. We know this is not the last were going to hear of it. I expect this will get more skewed toward wealthy families. The second condition has also been violated. That is that this bill blows a hole in the deficit. I understand you like to use a magic wand and say that well get growth, deal with it. We have objective scorekeepers that have been traditionally right in their projections. What youre trying to do is put three pounds of sugar in a 1 1 2pound bag. It doesnt fit. It doesnt fit. Were going to increase the deficit, and thats not a way for Economic Growth. Theres a better way. And youre creating problems. I mentioned state and local tax. To me, thats a double tax. Its not fair. I heard some of my republican colleagues say were doing this because its more democratic states that look like have the higher percentage of taxpayers. By the way, taxpayers in all states that are going to get hurt by elimination of state and local income taxes, but i hope we understand this is the United States. Because we could get into some nasty regional battles on transportation bills, on agricultural bills, but we try to do the policy that is right, and double taxation for taxpayers not to be able to take their state and local taxes is a deduction on their income taxes is just plain wrong. And not good policy. Youre also creating other problems. Ill give you one example i find just outrageous. That is discounting the historic tax credit. Thats used in my state and around the nation to get rene l renewals in communities that desperately need economic opportunity. And thats just one example of a tool thats going to be weakened. Quite frankly, theres a better way. We want to create jobs, then why dont we take a bipartisan proposal we had in the last congress, use the funds that come from repate reation, and put it in infrastructure. We know were going to get a lot more jobs that way. Lets rebuild america. The president said he wanted that, but no, youre taking this money and using it for other purposes. Theres a better way for economic development. Lets improve the low Income Housing tax credit, new market tax credit, that will create jobs. Particularly in vulnerable communities that need that help. But no, youre not improving those tools that are available, if were really interested in job growth. Why dont we do something to really improve Retirement Security in this country. We have bipartisan proposals to do it, but no, we dont see any real effort made to improve Retirement Security. Yes, there is a better way. Senator warner is right. All of us understand that we have global competition issues. But were the only country in the industrial world that uses exclusively income taxes for business. Why arent we looking at alternative ways . Some of us have put forward proposals to do that, as the chairman is aware of a proposal i brought forward. We want to work in a bipartisan manner. Why . Because well get a better bill, and it will stand the test of time. Were not getting off to a good start here. I would urge the chairman to recognize that this is not a transformational bill that you brought forward. You put together tax cuts of various groups in a package that makes little sense for middle income families and for our national debt. Senator stabenow. Thank you, mr. Chairman. Theres no question we need tax reform that creates jobs and incentivizes companies to bring jobs back to america, helps Small Businesses, and puts more money in the pockets of middle class families. In michigan and across the country. If that was in the bill in front of us, i would enthusiastically support it. However, that is not whats in the republican bill. Instead, its the same trickledown scheme that has failed every time its been tried. And we know between the house and senate bills, millions of middle income americans will actually get a tax increase. Since 1979, we have seen huge gains in the stock market and wages for the top 1 have grown by 138 . But middleincome families arent feeling it. In fact, the vast majority of American Workers have seen their wages stagnate or even go down. Profits have gone up, but not paychecks. Now, our republican colleagues have promised these same hardworking middleclass families that by once again giving the top 1 and the largest corporations huge tax giveaways, workers can magically receive 4,000 or 7,000 or 9,000 raises. Mr. Chairman, the proof is in their paychecks. Theres absolutely no evidence from past supply side tax giveaways that it results in hiring more people or raising workers wages. We have heard these same trickledown promises before back with the bush tax cuts in 2001, 2003. My colleagues from across the aisle odz on the floor that the bush tax cuts would, quote, aid the businesses and people who make up our economic machine and get it moving down the tracks at full speed, unquote. Unfortunately, thats not what happened. The train derailed. Growth was almost nonexistent, and the deficit exploded. Middleclass families saw little lasting benefit. But the huge deficits were used by the republicans as the reason that then they wanted to privatize social security. Which fortunately democrats stopped. Economists served as Deputy Assistant secretary of the treasury for Economic Policy during the reagan and george h. W. Bush administrations. Last month, when asked if tax cuts pay for themselves through greater Economic Growth, mr. Bartlett had some strong words. And i quote, thats a lie. Its always been a lie. Theres not one iota of evidence that will support this argument. In fact, he said wages fell for ten years after enactment of Tax Reform Act of 1986. And theres another part of whats happening now that is very concerning for me, mr. Chairman. The recently passed afterpassing the huge trickle down tax give aways, an increase in the deficit by 1. 5 trillion the next step will be to use the newly credited debt to cut medicare and medicaid. Almost one and a half trillion dollars in cuts is in the budget. Theres another example of this supply side approach. In 2012 our former Senate Colleague Sam Brownback promised the people of kansas for huge tax give away and the wealthy would super charge the states economy. Unfortunately, it did not. The state of kansas bond rating fell. They were 48th out of 50 in job growth and had a 900 million budget shortfall that caused some communities to cut schools to four days a week in order to balance their budge et cetera. T the people of kansas revolted. Most of the tax give aways were reversed. Middle class families were sold a bill of goods and were left with a mound of debt. Michigan families deserve a 4,000 or a 7,000 or even a 9,000 raise. Republicans have made these promises and i believe these promises should be kept. If this trickle down scheme fails again and middle class families get democrabt, they sh stop it. If my republican colleagues are serious, and i hope they are in putting more money in the pockets of middle income people, i hope you will join me. For hard working families in michigan its simple, the proof is in their paycheck. Thank you. For more than nine years since i first joined this committee, i have wanted to do tax reform. Ive always believed a sensible, fiscally tax overhaul would help or grow or grow, boost wages so more families have a better shot at the American Dream. Many of us worked together for a long time and unfortunately however the process used to try and force this tax bill across the finish line the not a credit to the bipartisan tradition of this committee. We can and more importantly we should do better than this. I was here with this committee wrote the Affordable Care act. Recall when our friends objected and moved too fast. We didnt move too fast. The year before this committee passed the Affordable Care act more than a dozen bipartisan hearing were held that became the Affordable Care act. We have multiple bipartisan round tables. There are details, exhaustive negotiations. They lasted for three months, as i recall. We have had no hearings on this tax reform proposal, none. We held no bipartisan negotiations. None. Weve held no bipartisan round tables. None. The proposals in this bill which was released just four days ago attempt to make not one sixth of our economy but literally 100 of our economy. Meanwhile the public has been told next to nothing about how this legislation might affect them. A truly bipartisan effort would have we gun months ago. It would have been done through regular order with careful and thauf thaufr thoughtful negotiations occurring over months. None of that applies. This process stands in stark contrast to the bipartisan efforts led by senators Lemar Alexander and murray. This isnt the kind of bipartisan tax reform we ought to be doing. I fear this bill will make it harder for Many Americans to buy a home. I fear this bill will empower state and local funding for education and health care as well as for college aids and job training. Theres enough to offer large tax cuts to high income households and many corporations. This bill makes it easier for family dynasties to give inheritance to their wealthy heirs. This bill cuts the top tax rate and eliminates required minimum tax for wealthiest americans. None of this meets my definition of fairness. The second question i always ask when faced with tax reform proposal, does it foster Economic Growth and job creation . Its hard to separate the economic effects from large deficits this bill would create. Itd lac it lacks the necessary guard rails for the jobs and tax base. As more americans go overseas, many is shifts overseas as a result of this bill, americans will be looking back at this moment, at this point in time, at this process in the congress and they will know who is to blame. Does it make the tax code simpler or more complex. Theres still more work to be done to make the tax code simpler. This bill introduced new and complicated provisions. New requirements to claim the Child Tax Credit that will make it difficult for americans to file their taxes. The fourth question i ask, maybe the most important one is this measure fiscally responsible. Sadly the answer is absolutely not. This bill employeesblows a 1. 5 hole as the deficits continue to grow in the years and decades beyond the next ten years. Last thing we need to do is continue to run up the deficit. We ought to be reducing the deficit, not blowing it up higher. Truth will told exploiting our deficits to pay for tax break for the wealthiest people in our country is not just unnecessary, i think its unconsciousable. Not a single senatorer is opposed to every single thing in this bill but the bulk of this bill is unacceptable. Not all of it but much of it. In the end its going to be born been future generations. I want to implore the chairman and our friends on the other side of the aisle. Lets go back to the drawing board. Lets start a new on a real bipartisan basis. Lets write something is fair that fosters Economic Growth and simplifies the tax code and reduces the deficit, not make it larger. Thank you mr. Chairman. The Senate Finance committee is done for the night. Members gathered earlier today to begin Opening Statements. The committee returns tuesday at 9 00 a. M. To begin debating and voting on amendments. Live coverage is here on cspan3. Tonight on cspan3 were on capitol hill with the house energy and Commerce Committee looks at hurricane Recovery Efforts following a series of deadly hurricanes in texas, florida and the caribbean. The House Judiciary Sub Committee examines allegations of frauds and abuse in the refugee admissions process. One of the most important issues to me in kansas is our economic policies. Weve been seen as this great experiment here in kansas and brownbecks tax policies have gutted state services. They have done who ahorrible th to education. Teachers are leaving the state. Young people are leaving the state. Economic opportunities a not here anymore. This is one of those things that brownbecks former advisor is trumps economic advisor. This isnt something i want to see done on a national level. It hurt kansas. I dont want to see it hurt the rest of the nation. The most important issue for our state right now is education. In the last five years youve seen cuts to education every single year. Every single budget proposed. I think the legislative house has been doing a good job with the Supreme Court ruling of trying to get the tax rates back to pre2012 rates. Theres always more that can be done. I think that takes ordinary people like me speaking out. I think one of the biggest issues thats very important to me needs to be worked on is maybe a bit more community things. Accepting a lot of things. Getting rid of stereotypes whether its gang related or lgbt community. I think thats very important. We need to come together because ive seen what it can do and i think it needs to happen a lot more. Not just here in kansas but all over the world, definitely. I wish that lawmakers would realize that the time for change in washington is now. In terms of term limits as well as average salary. Who in the United States makes 170,000 a year . Who in the United States own average makes the medical benefits like the congress is voting themselves in. Thats why we need to enact article 5 and let the states decide what they want to do by their representatives. They need to lead by example. I think the most important issue along with the budget crisis kansas is facing is Medicaid Expansion. A lot of states are also dealing with this issue. The decision from the Supreme Court to make Medicaid Expansion optional for states was felt in kansas. Hospitals are closing as a result of the money thats being left on the table for Medicaid Expansion not happening in kansas. People are on watsi inwaiting l over four years to be eligible for that service. Kansas is one of the most restrictive states for eligibility for that program. No matter how much money childless adults make they are not eligible. They are just further brought dune into situations where they may not be economically mobile or may not be able to provide for their families. In General Health care is a right and its not a privilege that some may not be able to get