The tone of our discussion this morning or this week. Because i think it has been a real problem. As ive said, i dont begrudge anyone for holding a passionate viewpoint on any issue. And i dont doubt my colleagues various colleagues sincerity in any views express or votes they take. But for the committee to operate, we need to be respectful and allow the debate to unfold in an orderly fashion. Members are of course, free to disagree about any issue. But no one should interrupt another member or shut down the other side or impugn their colleagues motives on substantive or procedural disagreements. In my opinion we saw quite a bit of that yesterday and some of it was pretty inflammatory. As for myself, i can take it. I can guarantee that in my 40 years in the senate, 40 plus years in the senate, ive been called worse names than anyone on this committee would come up with. But for the good of the committee, i want to urge my colleagues to dial back the rhetoric and turn down the volume of some of our arguments. This is the last time i will raise issues about process for the duration of this markup because in my view, if were going to have a lively debate it should be about policy. So lets talk about policy differences for a moment. Let me reiterate what our bill does. Our by gives tax relief to individuals and families across the board with the middle class getting the largest benefit relative to their income. We provide this relief prip earl by cutting rates and expanding credit is for parents and families. Our bill will also help bys of all sizes. Our pass through solution is simple and effective which is why the bill is supported by the National Federation of independent business, the largest Small Business organization in the country in the world really. And also, most other Small Business organizations. The business section of the mark also includes among other things a significant reduction in corporate rates. I know my colleagues have characterized this in a number of ways but this is not some radical right wing approach. As ive noted members of this committee on both sides have supported the proposition of lowering corporate rates for years now. The Ranking Member actually introduced legislation that would have reduced the rate to 24 in the past. Yet, now it appears that the notion that wed even consider moving down from the highest Corporate Tax rates in the industrialized world is something totally important to democrats. Ive yet to hear an explanationings from anyone on the other side as to why theyve changed their minds and are now characterizing our efforts to modernize americas business tax system as a corporate giveaway. That would be interesting to hear. As we debated at length yesterday, the mark will also zero out the punitive individual mandate tax established under obamacare. Despite claims to the con contemporary, we contend we contend that this is a pro family pro middle class and pro growth proposition. It will undo one of the most regressive taxes in the tax code and allow us to provide additional tax relief to middle class families. By now im sure most of my colleagues are aware of the most recent developments with jcts updated distribution counsel analysis. I expect our friends on the other side will try to make some hay out of the new table this morning and thats their right but i want to provide some context before that begins. We developed a modification to the chairmans mark that included additional tax relief for families throughout the middle class. Once again, it expanded further the Child Tax Credit, made it more refundable and provided it to a greater number of families with children. We also adjusted the rates downward for middle class families. And, of course, we relieved those middle and lower income families by the burdens imposes by the individual mandate tax. With those changes in place, jct noted a projected uptick in taxes owed by those in some lower income brackets. Obviously, we have no intention of raising taxes on these families. Every republican on this committee has been committed to providing tax cuts to every income cohort. So heres the rub. Jcts analysis doesnt show that were raising taxes on lower income americans. Were seeing some taxes go up in the distributional analysis because of a scoring assumption, not because of tax rates or even tax policy. Congressional score keepers have assumed that if if the individual mandate were to be repealed a segment of people will opt voluntarily to not get Health Insurance. The assumption extends even to those who currently get their insurance for free under medicaid. So jct began with an is this that some people in the lower income brackets will opt to not Purchase Health insurance and thus not take advantage of available tax credit subsidies. Without those credits they see an overall uptick in their Tax Liability. Now, i do not fault jct for this. They have to make assumptions in order to make credible projections. However in the world that emptieses outside of those assumptions, people will be making their own choices. In fact, our bill will give them additional freedom to do so. Nothing in our mark will impact the availability of premium subsidy credits. Nothing in the mark will direct or suggest to taxpayers that they should not take advantage of the credits. This is the result of an assumption about economic behavior that is 100 voluntary. I believe jct has Additional Data that will demonstrate that, but for the behavioral assumptions that accompany the repeal of the individual mandate tax, our mark provides significant relief to all low and middle class income brackets. I know were going to hear arguments to the contrary this morning but lets be clear. Anyone who says that were hikingtachs on low income families is misstating the facts. Anyone who says people will see their taxes go up because were taking away their Health Insurance is also misstath the facts. Just to make sure this is an bup dantley clear, i want to ask mr. Bartold about the latest jct distribution counsel analysis. Let me just ask you this question, mr. Bart old. Does anything in the mark lee deuce the availability of premium subsidy tax credits . Mr. Chairman, youre modified mark leaves in place the existing premium subsidy credit structure. Leaves it in place. No change. Okay. Does anything in the mark suggest or direct individuals in any income bracket to not Purchase Health insurance orator forego the use of available subsidy tax credits it. No, it does not sir. Is the impact were seeing in the distributional analysis relating to decreased utilization of the premium subsidytach credits the result of voluntary taxpayer behavior that is not mandated under the mark . Thats correct, mr. Chairman. All the analysis that we try to provide to the members in the revenue stims, the conventional revenue estimates and in the distribution analysis accounts for taxpayer behavior. The specific example that youre referring to includes a lot of taxpayer behavior in the analysis. Thanks, mr. Bart old. I appreciate you and the work youve done for this committee over the years. Senator wyden and then well start. Thank you, mr. Chairman. First you made some comments about our personal demeanor and personal relations. I can go down the row and mention my colleagues affection for you starting with senator mccaskill who said, and i quote, she loves you. I love her too. I cant top that. But as you know, nancy and i are so fond of you and elaine and besides colleagues, everybody who doesnt know it, chairman hatch is a former boxer. We do not want to mess with the prospect of had his right cross. So thats the story. Thats good advice. Thats the story with respect to the personal relations. Now, colleagues, im going to make my opening statement, then i have a question based on the jaw dropping news of yesterday and senator cardin indicated that a number of our colleagues have questions because of the very extraordinary news weve just learned about. So ill make my opening statement. Then i have a question. Then mr. Chairman i feel very strongly that colleagues ought to be able to ask mr. Bartold questions about what we have just learned. We have gotten astounding news in the last hour according to the latest figures from the yoint committee on taxationings in 2021, families earning 30,000 and under are going to get clobbered by a tax hike of nearly 6 billion to pay for this handout to multinational corporations. A 6 billion tax hike on low income americans. And by 2027, the news is even worse, a decade out. This bill raises taxes by 27 billion on families earning 75,000 and under. And meanwhile, the big corporations are guaranteed a cut across the board. Colleagues, i believe this process ought to end right here and now, and we get together when we are prepared as our side wants to do to work in a bipartisan way. I dont know how anybody can go home now to the folks they represent and explain why its a good idea to hike taxes on parents who barely stay afloat to pay for a massive corporate handout. What is happening now is just shameful. Republicans in this room spent all day yesterday stating that repealing the individual mandate is a tax cut. We now have Proof Positive that is dead wrong. And this is what happens when you legislate in secret with such reckless haste. This apartments to writing tax policy in the dark, and the majority has done its best to keep the lights turned off. The first version of the bill that cape out last week was a huge tax hike for millions of middle class votes. Then on tuesday, after two entire days of markups had passed, there was a new version that attacked the health care of millions of americans. Now, we have shocking new information as of this morning. At this rate, republicans are going to test the limits of exactly how many different ways hard working americans can be forced to pony up vast sums for corporate handouts. And i want to be clear because we touched on this yesterday. I think were getting a bead, colleagues on whats ahead. Once the finance Committee Process wraps up, this bill is headed straight back behind closed doors. Senators head home at the end of the week for the thanksgiving holiday. But the majorities from the house and the senate are going to be hashing out the differences in their two bills. Theyre looking to cut a back room deal and make 10 trillion in tax changes on the fly. And if youre watching at home and its been a minute since you took civics, heres what that means. When youre reaching for the cranberry sauce, republicans are going to be reaching for your pocketbooks to give handouts to multinational corporations. This is not a real honest to god attempt to have a full bipartisan debate on tax reform that gives everybody a chance to get ahead. There were apes to bring some sunshine to the process. There was an amendment to protect medicare and social security. There was another on protecting veterans. In my view, the real stunner was what happened with senator brown yesterday. He brought up an amendment because he wants to protect red, white, and blue jobs. He doesnt want them going overseas. He has been leading this crusade for years now. And he took his proposal to the president. He handed it to the president twice. I know because i was at the white house when he did it. And when youre dealing with a smart bipartisan proposal, its all about protecting and creating red, white, and blue jobs, senators ought to look on a bipartisan basis at ways to make it happen. Thats not what happened yesterday. Yesterday it was said the amendment was nonjermaine. Because senator brown didnt have a score. He submitted his proposal for a score nearly a week ago. Hours before the chairmans billing became public. How can you ask a senator to do better than that . In my judgment, it seems like a convenient excuse to say no. If a pro jobs idea, a pro american jobs idea is important to senator browns gets blocked without any valid reason, its hard to see what this process is about other than getting this bill out of committee and back into closed doors. Back into secret discussions. This morning, people across the country are waking up to confirmation that the bill pays for massive handouts to corporations with a multibillion dollar tax hike on those who cant afford it. Colleagues, this is nothing like the thoughtful measured, bipartisan approach that in my view defines this storied committees history. This isnt a process now of bringing together good ideas from both sides. This is as exercise in legislating with reckless haste and working families and middle class families can now see especially because of the news of this morning that it has disastrous consequences. Before my question, i just want to say and i say this with great sorrow, that if this process continues this way, when the history of this extraordinary committee, the Senate Finance committee is written, this is going to be a dark dark chapter. I want to ask my first question, mr. Chairman, and then mr. Chairman, like you, i have one question but i want to emphasize, colleagues on my side have asked specifically for the chance to ask mr. Bartold about this exftraary news of this morning. Mr. Bartold and colleagues ive been asking for a distribution table mr. Chairman, id like to ask a question like you did. Im going to run the committee. What were going to do is were going to have ten minutes to each person. Everybody will get their chance to ask questions. And a apologize to you for having asked a question of mr. Bart dld old. Parliamentary inquiry. In the interest of just fairness, could i now ask one question after my opening statement. Sure. Because you asked one question after your opening statement. You go ahead. Thank you for your courtesy. Ive been asking for a distribution table on the modified mark for the past two days. I still havent received the table directly. But i understand the table was put out earlier today. My understanding is that by 2027, almost every middle class taxpayer is going to get a tax hike or crumbs. I would like mr. Bartold to describe what the result is of this new plan for middle class people in 2027. That is my one question. And as ive indicated my colleagues have questions, as well. Okay, thank you. Do you want to no, the senator wanted me to respond . Just as he did to you. Sure, sure. Senator wyden in 2027 and remember thats the year that enincludes the sunset of the provision the individual income tax provisions in the chairmans mark as well as some additional provisions that increase taxes on businesses by changing the business tax base, the page 5 of jcx5 that we released approximately 9 40 this morning shows that, lets see, that compared to present law, the change in federal taxes is generally positive for the income groups from less than 10,000 to 75,000. Slight modest negatives in comparison to the underlying mark for taxpayers in our income categories above 75,000. But thats my point. Im going to let other colleagues but im looking at the chart on page 6, and everybody over 75,000, these are hard working middle class families in michigan and maryland and colorado all of the states represented here, you look at page 6. And those folks get hammered. Under 75,000, excuse me. Under 75,000. Those folks get hammered and right in the table, colleagues, on page 6. Middle class families making under 75,000 in 2027 page 6, they get clobbered. They pay more taxes. All right. Youve made your point. Senator toomey. Mr. Chairman, thank you. I am going to i have to assume for now that theres a profound misunderstanding on the part of the Ranking Member because i know him well enough to know that he wouldnt knowingly suggest something as absurd as what he seems to be alleging. Let me explain whats going on here to clarify this. First of all, i think we all know we subsidize. Activities through the tax code. Whether people think thats a good idea or not, it happens all the time. And here in congress, we have very, very strange and i would say even ridiculous rules and scoring conventions that wildly mischaracterize these subsidies in a number of circumstances. Specifically, when we think a taxpayer voluntarily choos not to participate or engage in a program that has such a tax code subsidy, we take that subsidy and we stick it in a table as though its a tax increase. The advanced premium tax credit is one such example. This is absolutely not a tax increase and you guys know that. The fact is, and ill demonstrate this in a minute, every single income cohort has substantial savings in taxes and virtually all middle income taxpayers are going to get a substantial tax cut. So let me try an analogy here. Lets imagine somebody qualifies for Unemployment Insurance. They qualify. They could get Unemployment Insurance. They lose their job. They could get Unemployment Insurance if they wanted it. But they dhoos k choose not to sign up for whatever reason. They would not get the insurance payments. Did retheirtachs . Did that person just get a tax increase or how about more directly through the tax code, the earned income tax credit. Somebody is working and have a job that pays 8. They get the earned income tax credit. They qualify for it and get that. For whoever reason, they decide to quit that job. Well, they could be still working. They could still be getting their earned income tax credit. But theyve chosen not to. Do we think we raced theirtachs . Thats ridiculous. How about the American Opportunity tax credit . That is a partially refundable tax credit. It covers the cost, part of the cost of tuitions and fees for people who go to college up to 1,000 in my understanding is refundable. If somebody decides theyre not going to go to college, did we raise their tax because they didnt take the American Opportunity tax credit . Thats ridiculous. And thats what our colleagues are suggesting is a tax increase. Now, it is not a tax encrease if a person decides they dont want to dont want to buy an obamacare plan and as a result we dont send a payment to an Insurance Company. Thats what this is about. Thats what the advanced premium tax credit is. Its a payment to an Insurance Company. If a person chooses to participate in the program. If they decide not to participate in the program, we dont send the payment to the Insurance Company. Thats a tax increase . Its actually a tax cut. Let me show this chart that depicts this and well make sure everybodys got one if you dont already. This simply shows the effect on taxpayers by cohorts, by income cohorts, with the Insurance Company payments put aside. And it shows that each and every single income cohort has a substantial tax increase. What this reflects is the reality that the family is going to experience. Theyre going to owe less money to uncle sam. And if somebody decides that they want to participate in obamacare, then again, we dont make any change in that whatsoever and the premium tax credit goes as it would otherwise go forward. But if they decide they cant afford that, were going to give thm the tax benefit of not penalizing them anymore and then we wont send a payment to the Insurance Company. It has no e fact on them. This is is chart that reflects the tax reality for virtually everybody and every single cohort in every single year has a savings. Thats the reality. Thank you, mr. Chairman. Mr. Chairman, just quickly wait, wait, wait. Look, were not going to have a freeforall here today. This is going to be run in a fair but responsible manner. Mr. Chairman. I dont think we did it yesterday very well. Well turn to the Ranking Member first then well go back and forth. Isle take only 30 seconds because my colleagues have been waiting. Ive never heard a senator try to psychoanalyze a joint committee on taxation table, but at the bottom of page 6, colleagues, its all there in black and white. You make under 75,000 and according to the table going through every group they pay more in taxes and anybody who wants to try to psychoanalyze otherwise their constitutional right, but the table is indisputable. Mr. Chairman . Let me just see is there anybody on this side want to answer that . Senator crapo. Thank you, mr. Chairman. Its correct that the table the Ranking Member is reading from has that number on it. But its also correct that no american who is attributed a tax increase by that number is paying it. Its a payment to an Insurance Company. And it is a payment that every american whos on that chart could choose to take if they wanted to. And the bottom line is if you look at the Tax Liability of the people that youre talking about, saying theyre getting a tax increase here and just calculate out their Tax Liability, whatever it was before this bill and whatever it will be under this bill, their Tax Liability is going down. The example the examples that senator toomey made are accurate. You could come um with a number more. If somebody qualifies for food stamps and chooses not to apply for them, did we take away their money . No. If somebody qualifies for any of the other Government Programs but somebody qualifies for medicaid but chootzs not to sign up for medicaid, did we give thm them a tax increase . No. And no matter how you try to characterize it, exactly what is reflected on these charts is the fact that people who are required by law to pay a penalty for not buying insurance and are under this bill relieved of paying that penalty are then going to have the choice as to whether to buy insurance or not buy insurance, but they now know they dont have to pay a tax penalty if they dont. And if they choose not to, that opportunity mean their taxes went up. Theres not one dollar taken away if they dont make that choice. This bill does not take one dollar away from them or charge them one dollar more no matter what the way our conventions about scoring refundable tax credits say. Mr. Chairman. Senator. Mr. Chairman, i listened monday, tuesday, and wednesday as my republican colleagues pointed to the joint Tax Committee distributional chart as evidence that this bill hemmed middleincome families. Now, i also heard my republican colleagues dis the joint Tax Committee on their revenue estimates saying they were wrong and the 1. 5 trillion wouldnt be there, when, in fact, we know its going to be more than 1. 5 trillion because a lot of this is temporary in nature and will be a greater deficit than 1. 5 trillion. Now we have the joint tax analysis that shows that middleincome families will actually see their taxes go up, not down, as effective rates, yet high income families know they do fine. Theyll do fine. I heard the chairman talk, well, this is their own behavior. Its interesting that the 180 billion were talking about that comes out of middleincome families on the health care subsidies, the majority use that money in the chairmans bona fide mark. They used it to make certain changes that are reflected in the distributional charts. To is youre saying, no were not going to count the behavior on the health care in the distributional charts but when you take that revenue thats not going to be spent and use it to make the distributional charts look better, how hypocritical can you be to do that . Voluntary action, people make decisions. Businesses make decisions as to how theyre going to spend their money. That decision affects their Tax Liability. Youre not challenging that. Lets have the decency to respect the professional work thats been done here and call it the way it is. What this modified mark will meenl is that middleincome families are to pay more. Higherincome families are going to pay less. Youve targeted the relief to help the wealthy and the middleincome families are going to get stuck with it. Now you say voluntary activity, a person makes a voluntary chartdable contribution. That affects their tax returns. Joint Tax Committee has to make certain assumptions as to whats going to happen. I dont think youre challenging their assumptions because youve take than 180 billion under the Affordable Care act and you spent it. You also took the money with less people on medicaid and you spent it. Senator, your ten minutes is way up. Senator. Thank you, mr. Chairman. After senator cornyn finishes were going to g back and forth. Right. Thank you, mr. Chairman. Ive found ins i ef been in the senate more shouting goes on the more tenuous the ground the senator is on. And i think thats the case here today. We flatly deny, disagree with the accusations made by my friend from maryland and the Ranking Member. Let me just ask, could i ask the what is the what is the income threshold for lets say a single mom with two childr children, whats the income threshold that has to be achieved before they pay any income tax at all . The standard deduction for head of household, senator, is lets approximate, 9,000 and each personal exemption is 4,050. You said there were three so thats 12,150. So were saying approximately the first 21,000 of income for that household is exempt from tax before calculating any benefit that the household might receive assuming its a working mother in your situation from the earned income tax credit and the refundable portion of the Child Tax Credit. So so, in fact, more income would effectively be not taxed by reason of those credits. So did i understand correctly the 33,000 roughly under this circumstance that would be tax free . Did i understand that correctly . A thousand dollars of tax credit, the person be in a 10 bracket so, theres 3,000 of Child Tax Credit. So that would so that would lets see i hate doing this on the on the fly. Youre doing better than i could. Yeah, no, so if we had another you said another 33,000 so another 13,000 worth of taxable income, most of it in 10 bracket would be only 1,300 of income tax before claiming the Child Tax Credit so the 33,000 worpt worth of income this individual should have no Tax Liability under present law. Okay. Sorry to be so the single mom with two children everyoning 33,000 a year would pay zero tax before under present law, rough calculation. Under the chairmans modified mark, how much would be the income tax responsibility of that same single mom with two children . Tho no change there. No change. Youre kidding me. Our colleagues over here are claiming that were somehow targeting individuals like this single mother of two kids saying were going ratz hise her taxes benefit multinational corporations when from what youve told me her Tax Liability under current law is ezero and after this bill passes her Tax Liability will be zero. E thank you. Is that accurate . The income Tax Liability for household that senator cornyn described should be zero under the present law and under the chairmans mark as modified. Well, thats the point hes making, isnt it . I believe that was his point. To counter some of the outrageous claims from the other side. Back and forth. Five minutes. Senator stabenow. Senator stabenow, well turn to you. Thank you, mr. Chairman. First a comment then a question. You know, this this bill just gets worse and worse and worse. It was trickledown economics on monday, and then it got worse and more people were going to have to pay more on tuesday, plus now people losing Health Insurance and now today which day is this they all bleed together. But the fact is that today we now see the worst yet in terms of the numbers. And i guess the broad point i would make is no matter how you cut this, this bill is about trickledown economics. Its about giveaways for the wealthiest americans, multinational corporations, most people, people under 75,000 a year, will pay many pay more in taxes, and many, many people will lose their Health Insurance. So you lose your Health Insurance to give trickledown tax cut to the wealthiest among us or you pay more taxes so that those who are the wealthiest among us will be able to get another supplyside tax cut. Every piece of this bill is skewed to the wealthy and those at the very, very top and the very, very largest corporations, wealthiest individuals. Every single piece of it. And now we know that three years, 2021, the latest version gives families earning less than 30,000 a year a tax increase. All together 6 billion spread out among taxpayers. While millionaires and billionaires get a 28 billion tax cut. Thats what the joint committee on taxation has given us in terms of numbers. So every day this bill gets worked on it gets worse and worse for middleincome and workingclass people. Laegs a question by the way, the personal exemption is limited in this bill so that if you have more than one child youre going to be penalized. If you are a family of two children, three children, four children, that personal exemption is gone, which means you start in the hole. But the Child Tax Credit to me is another example of how this is skewed to the top and trickledown economics. The current Child Tax Credit is 1,000, correct . Thats correct, senator. And the new version is 2,000, correct . Thats correct. Which sounds good. How much of that is refundable . Under the chairmans modified mark, 1,000 remains refundable and thats indexed. Okay. Which is a change for the so theres an increase, but if youre a working family, the mom that was just talked about, you wont benefit from that increase. But you know who benefits from that increase . They raise the cap on the income of the households that can benefit from the Child Tax Credit five times higher. Five times five times higher. 500,000. So the working mom who now under this analysis, earning less than 30,000, may see a tax increase, may have more difficulty getting Health Insurance, but shes not going to benefit from this Child Tax Credit any more than she does now, maybe a tiny bit, because of the indexing. But the folks that will benefit is somebody making a half a million dollars. So every piece of this bill unfortunately in the fine print goes back to the same thing. It is skewed to the wealthy and the well connected and its trickledown economics, which has never worked. Just ask the folks in the state of kansas, where after the disaster they had there, a Bipartisan Group of democrats and republicans had to come back and repeal the whole thing because it was hurting families in their state. Thank you, mr. Chair. Senator warner, we understand youre next. Thank you, mr. Chairman. I just want to make three quick points. One, with all due respect, if were assuming that individuals have r not going to make rational economic choices in their own best interest in terms of receiving benefits that are available, i agree theyre voluntary. I guess then i would say should we also make those assumptions that businesses are not going to choose the expensing opportunities, that businesses are not going to choose to immediately write off their r d expenses . I mean, we get ourselves into a land of hypotheticals that i think are really dont get us there and consequently youve got a hard job. I think a business would make a rational choice, an individual would make a rational choice, so i respectfully completely disagree with some of my friends on the other side that people arent going to act that way and as has been made mention by other folks on this side, you cant argue people theres not going to be this loss when you then use the dollars for other purposes of folk who is make choices, presuming that people are not going to make rational choices to take their subsidies or other benefits from the government. I also heard one of my colleagues make mention of putting out a hypothetical that said this individual with three children and because i think our tax code under current and future proposals does try to take care of those. I guess i would ask mr mr. Barthold, using your numbers, if a young man in dallas, texas, a young, struggling entrepreneur trying to get his business started in dallas and he makes 29,000 in 2027, i believe based on your charts hes going see a 25. 4 increase in his taxes from where they were at least in 2019. Is that not a correct assumption . Im looking at page 5. So this young single entrepreneur whos trying to make a business, entrepreneur, failed a few times, live in that tax bracket, based on where he might be in 2018, 2019 if this bill goes through, is he not going to see a 25 increase in his taxes . It depends 25 for a specific individual depends on the specifics of the not somebody not three kids, not a single mom. This is a young entrepreneur in dallas, texas, trying to make things am i misreading any of your charts . The only clarification i was trying to make, senator, is that the specifics, when you say a single a single individual, entrepreneur, 29,000 in income, thats one of many of actually millions of people in different circumstances. Yes. And the total that we support there is the aggregate change in tax liabilities. The point being if we create an example that says the single mom is struggling with three kids, maybe shes going to as you pointed out, not going to have Tax Liability. If you have a 25. 4 blended increase on that cohort, then someone, and i was trying to pick an example that would seem to have the least amount of other deductions sshg going to see a big hit. And this would reflect, just to maybe be more precise, what this reflects is in the chairmans modification there is the modified indexing, and so that means that the tax brackets, the values of the personal exemption, which would be back at effect under president law because of the sunset, that they are lower than they would be under present law, so therefore i dont want to use the chairmans time, but i just want to say, we can automatic show examples but i think youre the referees and i think we have to count on the referees. And my last point, mr. Chairman, briefly, is just that if we are going to end up and youve made the point and unfortunately since ive been here weve done this and i remember a few years back i want to give you and the Ranking Member credit, i thought we were going to vote on the final time of extenders. Well, we have created a whole new bucket of extenders by this gimmicks being used, not my words, the committee for a responsible federal budget, and i again want to introduce if i could into into the record their analysis, which most of us on both sides have supported, that really say that this added to the debt is about 2. 2 trillion, when you presume that when these popular benefits expire were going to extend them, and we ought to be straight with the american people. Adding 2. 2 trillion, that includes the additional interest charges, that is i believe a much more accurate number of time is way expired. Thank you, mr. Chairman. Let me call on first senator toomey and then senator portman. Thank you, mr. Chairman. Five minutes. To my colleague from virginia, i dont think anybody here is suggesting that people are not going to make rational choices. People will make rational choices. What im pointing out is the bizarre anomaly of the way we require joint tax to casualty for them. Thats whats so misleading about what you guys are alleging here. So the senator from michigan seemed to suggest that every iteration of this is getting worse. These iterations are Getting Better and better for working families, middle class, and in every cohort. So, mr. Bartow, let me ask you a couple questions if i could. I want to focus on taxes that people have to pay, not payments to insurance companies. Lets not focus on payments that my colleagues are certainly suggesting is a tax increase. If you look at the actual taxes that are actually paid by human beings, and i look at the chart that was produced on november 11th, i see reductions in every single cohort. Every income cohort. Lets take, for instance, the 20,000 to 30,000 cohort. The number on my sheet here is a 7 average reduction in taxes. You see that number . Which year, senator toomey . Im sorry. 2023. The senator is referring to jcx53, which was the distribution analysis for underlying chairmans mark. Right. Yes, in the 20,000 to 30,000 we had estimated that the total taxes collected attributable to that income group would fall by 7 . Right. And it falls in all the brackets. Hes on page 3 of jcx5317, which was the distribution of the chairmans mark before the modification. Which simply illustrates, contrary to what we of been hearing all week long, that every middleincome familitax c as a tax cut on average. And, again, putting aside the payments that the federal government makes to Insurance Company s, which is ridiculous to consider taxes, i know you ran a set of numbers exclusive of that dynamic. And ive got a chart up here for the calendar year 2023. That is the joint committee on taxati taxation, knoch 16th, 2017d1752. Yes, senator toomey, you and the chairman had asked if we could distribute the effects of the mark as modified absent the zerorated individual mandate penalty. Right. And when you then when you look at the 20,000 to 30,000 income cohort, the average savings now is not the 7 it was before, but its 9. 5 . Thats correct, senator. And actually, every single cohort has a larger savings which is to say a bigger tax cut under this more recent version than the previous version, right . Thats correct. So contrary to what our friend from michigan said, actually mr. Chairman, do we have this document . Is Getting Better do we have this document . Im just trying to follow. Should have it. Senator toomey, it was not a public document. You had requested it separate analysis. Ill have it provided to all the members. I had no idea that this was not being districted. And i put it on a chart. This is how big a secret i wanted to keep. Cant read it. My eyes are not as good as yours. I get that and my glasses work well, ill help you with, that but listen, the fact of the matter is what we of don in the latest version is further reduce and theres no mystery about how. Again, mr. Bartow, what are some of the devices that were used to further reduce the tax burden for middle and working class families . Did we increase the Child Tax Credit . In the chairmans mark modified to increase the tax credit to 2,000. Any other changes that had the e fact of reducing taxes . Also changed the original mark had tax brackets of 22. 5 , 25 , and 32. 5 in sort of the middle brackets. Each of those you reduced to 22 , 24 , and 32 respectively. So we lowered rates lowered rates. On working and middleincome fam lis, increased the Child Tax Credit for these families and thats why unsurprisingly the tax burden in this iteration is lower still, a bigger savings for middleincome families. Senator portman. Thank you, mr. Chairman. If i were watching this from the real world, not from this podium, i would wonder how this all squares because were hearing very different messages. And let me just make one obvious point, i hope. When the Ranking Member, senator widen, and or more recently the senator talked about 2027, which is ten years from now and what the effect is going to be on middleincome families, they were talking of course about after the proposal is sunset. And so senator widen went to page 6 and talked about 2027 and said that he was concerned that taxes went up for individuals. Well, yeah, that guy up because the tax cuts that were putting in place with this proposal end. So if youre watching and wondering how could both these things be true, that there are middleclass tax cuts as mr. Bartow just said, from today until ten years from now, but somehow in ten years from now, taxes go up, yeah, thats true, because its sunset. And so my friend senator warner talked about the entrepreneur in texas and he referred to the chart of 2027, yeah, thats true. Of course the taxes go up because under the budget rules within which we have to operate here, there cannot be eve an penny of deficit as scored on a static basis in the second ten years. And so, we sunset those tax cuts that are substantial between now and then for that individual youre talking about because of these budget rules. And mr. Bartow, is it true that in 2027 the difference you see in these charts again, i would refer you to the chart that senator widen asked us to go to, page 6 of jcx5817, if you look at, that youll see there is substantial tax relief until that last year, 2027. Look at the bottom chart. All taxpayers is that accurate there is tax relief until the 2027 year . Yes, senator toomey. Im senator portman. Portman. Im sorry. I appreciate the compliment. So thank you, john. I mean tom. Sorry. So i just for the folks in the real world watching this, thats what were talk about here. Now every member of this panel, including the democrats, have the opportunity to strike that sunset. If they want to offer an amendment to say lets not have this sunset leshgtss not sunset this legislation after ten years because we want to continue this substantial tax relief that were providing under this bill, we have the opportunity do that. On the floor of the United States senate. And it was indicated yesterday that perhaps one of our colleagues is going to do that. And if so, if wont be an issue. The tax relief will continue. But again, if i were watching, id be kind of confused. The other part i might be confused about is this notion that in the lower bracket, 10,000 to 20,000, 20,000 to 30,000, theres been the argument that there is a tax increase. That tax increase is because of the expiration of the individual mandate as was talked about. Let me try to put it as plainly as possible, these are people who do choose senator warren is absolutely right. People are rational, theyll make their choices. And the joint committee on taxation is supposed to reflect that rational choice. People are going to say, you know what, id rather not take this Affordable Care act Health Care Plan even though i get a tax credit if i do it, because ill have other costs attendant to that. Some people get more of a Premium Credit than others. Some people are going to have copays. Some people are going to have deducts that are higher. And so im choosing not to take that. Tom bartow in the joint committee reflects that as tax increase. Its a choice by people not to accept the tax credit because they would rather as a rational human beings make a decision, not have the other costs that are associated with that. Thats why i just hope as youre watching this and listening to what were saying, its a decision, its a policy decision, and i would hope that the bottom line is recognized, which is that this provides substantial tax relief, particularly to middleincome families, and that tax resleef going to be across the board and every single Different Group of taxpayers, as is indicated on these charts, as tom as confirmed time and time again, again today, and that means that the promise that we have made that will will be relief from middleincome families that are feeling the stress higher expenses, flat wages, middleclass squeeze are going to get substantial relief. In ohio its about 24 00 for a family at the median income. Thank you, mr. Chairman. Thank you. Going to 2027, ceding senator portmans point that the individual tax cuts expire there, lets look at what happens in 2027. Mr. Balltold, isnt it true based on the last distribution table that youve given us that while taxes go up for people with 100,000 of income or less in 2027, they continue to be lower for everyone over 200,000 . Jor, thats correct and you can see that in the subtables. So my point is that even when the individual goes away, the millionaires are still paying less taxes. Folks that pay 500 to a million are till paying less taxes. Its only the bottom folks that end up paying more assuming these individual rates arent and lets look at another diagram. On year 2021, based on the distribution table, federal taxes paid in, people between 20,000 to 30,000 under the present law pay in 22 billion in taxes, 22. 5 billion based on your chart. On page 2, year 2021, people between 20,000 to 30,000, nothings expired yet, they pay 22 billion, point knife taxes now. Theyll pay 25. 5 billion under this proposal, 3 billion more. Correct . Thats the consequence of predominantly of the change in the Premium Credit subsidies. And cpi. And cpi. But for millionaires, theyre going the pay 671 under the current law and only going the pay 643. So they get to pay 28 billion less in 2021 while people between 20,000 to 30,000 have to pay 3 billion more. Now lets look at the last bun 2025. Its really stark here. If you add up the numbers of the federal taxes paid by people who make 30,000 or less, theyre going to pay 4 billion more in 2025 based on this proposal. 27. 2 going to 31, minus 4. 7 is going to minus 5. 9, 5. 9 is going the 6. 1. Thats a total of 4 billion more theyre going to pay. But if you add up everyone who makes more than 200,000, theyre going to pay 90 billion less. If you add up how much tax theys pay presently, 200 to 500, follow with me, guy, 889 under this proposal. 500 to a million, they pay 321 billion in taxes. Under this proposal, theyre going to pay 301. A million and over they pay 780 now, theyll pay 764 under this proposal. So in 2025,understands this, people making less than 30,000 a year are going to pay 4 billion more in tax, while people who make 200,000 and over are going to pay 90 billion less. Thats what were talking about. Thats whats wrong with this bill. Thats why we are offended at all of these things that are skewed toward the people at the tom of the income charts. And if anybodys confused about the numbers i just did, im happy to walk them through it, but i added them up myself and i used to be an auditor. Thank you, mr. Chairman. Mr. Chairman, thank you. And thanks for this hearing. Listening to frooefrs speaker, wondering what her point is to make all these rates permanent, ill join you on that, if you want to make all these individual rates permanent if thats what youre id love to work in a bipartisan way to low for corporate rate, the Child Tax Credit i dont think anybody on this side will disagree. Maybe the permanent. But i want to go on the theme of my friend senator portman in that if youre watching this on temperature o tv outside and listening to the other side of the aisle argue gens themselves, its pretty fascinating. I listened to my friend from michigan talk about how those less than 30,000 a year are going to be paying more taxes and we just had jcts tell us they will not be paying more taxes. Then my friend from virginia said he agrees with jct that they will not be mypaying more taxes because theres the facts. Now i listen to my friend from missouri and now shes saying under 30,000 youre paying more taxes. Which is it . I want to hear from the other side, what is it . The fact is, and ill tell you what it is, if youre make less than 30,000 a year under the current tax system youre not paying taxes. And that was well document ld by the majority chwhip. And under this new, under this new tax system thats being presented today, you still wont be paying taxes. So to listen to time and time again i know we wear earplugs around here and thats the key because you have your talking points in front of you. Mr. Barthold was very up front and said under the Current System if you make less than 30,000 a year today you dont pay taxes. You do not have a federal liability. Under the new bill that we have in front of us today and you make 30,000 or less, you stim wont be paying additional taxes. So maybe i should ask this question one more time. Mr. Barthold, is there anything under this legislation that would prohibit an individual from seching federal assistance to help them afford coverage . Senator heller, the chairmans as modified makes no changes to the credits available under 36b, the advanced premium subsidy credit. If you make 30,000 or less today under the Current System, do you have a federal liability . Again, individual specific case if we were turning to senator cornyns example a mother with two children. Noun. None. Under the bill thats in front of us today, would that same individual have a Tax Liability . The same individual would have no Tax Liability. Mr. Chairman, im getting tired of listening to individuals talk about those who make 30,000 and less and having their taxes increase. Thats absolutely absurd and not true. So if we could go on to other portions of this particular piece of legislation im willing to listen, but to continue to beat on that point is literally untrue. Simply because we choose. Because you choose not to take individual mandate is not a tax increase. I can tell you stories after stories back in my state that was hit hard by the recession of individuals that lost their jobs and were told that they could pick um Unemployment Insurance and they said, you know, by my bootstraps im going to pick myself up, im going to work hard, find a job, chose, chose themselves not to take Unemployment Insurance. None of them believe the their taxes were raised on them. Theres none of them out there. And i of talked to hundreds of people l e in nevada that chose not to take Unemployment Insurance during the depth of the recession. Yet everybody on the other side over here is saying they of got their tax increased. Thats what think ear saying. One other point before we finish t. I want to thank my friend from virginia for his indoor voice. I want to thank you for your indoor voice. And i hope the others on that side of the panel will use that as an example, as an example of how we can have a decent discussion back and forth. Thank you for that. Mr. Chairman, im done. Mr. Chairman, point of first on privilege if i might just e just for a moment that my comments have been a number of folks have referenced comments. I would like to ask just one question of mr. Barthold given the fact that my comments have been referenced on a number of times. I want to keep this in a regular order. I know but as a point of personal privilege the next person up was senator bennett. Might i take 30 seconds from mr. Chairman, i just know that in looking at these charts, just for the record, 201 2 1, the new version of the bill gives families earning less than 30,000 a year a net tax increase of almost 6 billion according to jct. Thank you. Is that thank you. Thank you, mr. Chairman. I will clear this up later, but, mr. Barthole holds answer to senator warmer was very clear there was a circumstance where theres a tax increase. Look, this is supposed to be a tax bill. It comes on the heels of two attempts to try to repeal the Affordable Care act. The republicans decided to put health care into this bill and the result of that is that at least 13 Million People are going to lose their Health Insurance. Speaking of real life and real colorado, i was recently this sumner frils coe, colorado, where i went to visit the Health Clinic there, a rural part of our state, and i asked what the pair mix and the Health Clinic was. 33 was medicaid. State, and i ar mix and the Health Clinic was. 33 was medicaid. 53 was uncompensated care. I said what . Whats that 53 . And he said, those are people that are making too much money to get medicaid but not enough money to get private insurance. They are in the middle of the middle class and those are the people whose insurance youre taking away with this tax bill. 13 million americans. And the reason it shows up in the tax tables is that youre making it harder and harpder for them to be able to afford insurance. And with respect to my friend from nevada, and itch a lot offed a misch rapgs for him, its not true that people arent paying taxes. Theyre paying payroll taxes nape ear paying state and local taxes. Theyre paying sales taxes, all of which are regressive, many of which are regressive taxes. In fact, you will have an opportunity today to vote for a bill here that recognizes that fact, a bill that i have with senator brown and senator casey, that would actually make a profound difference in the lives of working people this country, especially ones that are raising children. You will have a chance to vote for that. So if that is your concern is what i of heard today, you will have the chance to exe prsz tpr in this vote. But the tax tables that ive seen, and im happy to be proven wrong on this, the tables ive seen, when you add up the state and local taxes people pay, the payroll taxes that people pay, its roughly in proportion to what theyre earning. So the idea that there are a bunch of people in the country that are kind of free loading or might have some opportunity to pay more at the bottom, i think, just is incorrect. And i guess i would ask mr. Barthold whether its true that people at this level are paying lots of taxes. I wont even use that characterization. Are paying taxes, state and local taxes, payroll taxes. Theiss a federal tax. Mr. Chairman, the distortion of what i said i said federal Tax Liability. I didnt say they dont pay federal taxes. I said federal Tax Liability. Okay. You have to understand. You have to understand that. I agree. I appreciate that. Mr. Barthold, could you answer my question . Certainly, sir. There are many taxes lech vied at Different Levels of government and at the federal level we have the income tax, we have payroll tax, we have some selected excise taxes. Right. And many people, particularly lowincome people, purchase gasoline, purchase alcoholic beverages, Tobacco Products thank you. And thats federal tax reliability. I enjoy sod much the chance to work with the senator from nevada on our infrastructure subcommittee from this committee and i thank the chairman for putting that together. I really think that all what all this reveals, this argument that were having today between senator toomey and senator warner and between me and senator all of it suggests to me we should go back to regular order. Lets have a bipartisan approach to reforming our tax code. To reforming the corporate rate. To bringing it down. Lets do it together and lets do it in plain sight of the american people. I think theyd have a lot more confidence in this process if we were doing that, especially with the chairman and the Ranking Member leading it than they will have in a process where the numbers change from day to day and the work is done behind closed doors. Mr. Chairman, i yield back 40 seconds of my time. Thanks so much. Senator thune. And wind up mr. Senator cantwell. Thank you, mr. Chairman. Mr. Chairman, and i think that in response to senator from colorados comment, i think in a lot of ways our colleagues on the other side foreclose that opportunity early on this year by setting sending a letter stating the conditions under which they would participate in a tax reform bill, many of which were just not feasible. So let me just come back to this question thats been kind of batted around all morning, and i think with respect to federal income Tax Liability, the issues been raised, raised by senator cornyn, raised by senator heller as well, that if you have an individual with the income characteristics that was described earlier, that person would not have a federal income Tax Liability. And i would just ask mr. Barthold, under the chairmans modified mark, the standard deduction goes from what for a single and what for a married filing jointly . Married joint goes from present law today 12,700 to 24,000 head of household goes from 9,350 to 18,000. The single goes from i dont have the right number 6,000 and couple hundred dollars to 12,000. So youre lifting more and more people theyre raising the income thresh hold at which somebody would have a federal income Tax Liability. So what does the Child Tax Credit go to under the chairmans modified mark . It increases to 2,000. 2,000 per child. Per child. Who benefits from a 1,000 increase in the Child Tax Credit distributionly if you look at the Income Distribution tables . Well, the increase remember, the tax credit reduces Tax Liability, so anyone who before the Child Tax Credit would have a positive Tax Liability. Part is refunded under president law, everyone up and down the income level except the area where its where its phased out, which the mark would set that at above 500,000. So basically those two basic changes are going to flow through all the income categories, income cohorts that have been talked about. Weve stated as our objective in all this the desire to lower taxes for middleincome families, those changes would in effect make that happen. And then were also reducing the rates throughout the entire tax structure in a way, too, that i think also helps or in many ways impactings those same income cohorts. Would that be right . They would also benefit from the rate reduction that are occurring under the chairmans modified mark . The mark maintains a 10 bracket and then lowers brackets that by having the 12 instead of 15, 24 instead of 25, et cetera. So basically, everything that the chairmans mold fied mark does should accrue to people who are in those middleincome categories, those middleincome families that have been the principal beneficiaries has been our intention with this legislation all along. So it is hard to understand why our colleagues on the other side somehow think that theyre not going to benefit from this. People in the lower income thresholds we talked about earlier, who dont have a Tax Liability, income Tax Liability federally cant raise taxes on people who dont have a federal income Tax Liability. And thats at for a single mom, suggested earlier weather a couple kids in the 30,000 to 33,000 range so, its hard to argue taxes will go up on somebody those income categories if thats all true and thats all true under the chairmans modified mark. What i would say, and i guess i look at the distribution tables that have been districted based upon the initial proposal, the chairmans modified mark and if you look at who bears the tax burden when this is all said and done, its very similar to today. In fact, people over a million dollars, as far as i can tell most cases, their actual share of tax paid of taxation in this country is higher than it is today. So people over the socalled rich, the people who are in that income category, are going to pay more as a percentage of total tax burden than they pay today. So it seems to me that the chairmans modified mark accomplishes the objects that it set out to accomplish, and that is to deliver meaningful tax relief to middleincome families all across those middleincome categories. So i hope we can get on with it and vote on some amendments, but lets move this legislation forward and bringneeded relief to middleincome families in this country. Thank you, mr. Chairman. I appreciate the distinguished senators comments because thats true. Were going to wind up here with senator cantwell. The votes already been called and well shell finish t off and then well recess until 2 30. Yes, sir. Thank you, mr. Chairman. I wish anyway, ill take the opportunity even though i think this is a very important subject and i know we have a vote thats down to one minute on the floor. The mark repeoples the subpart f that specified that foreignbased oilrelated income are subject to the current taxation. Is that correct . Thats correct, senator kanltd well. So how much revenue does this provision lose, this break . How much revenue . Cantwell. So how much revenue does this provision lose, this break . How much revenue . Isle have to look it up. I think its 3. 9 over 10, 3. 9 billion over ten. If thats what we reported in jcx57, i agree. So your comments are the that the foreignbased Company Income consists of personal holding, Company Income, which includes passive income such as dividends, interest, royalties of income, business operations, foreignbased Company Sales income, foreignbased services, foreignbased companies related income. Any other categories of foreignbaylesed Company Income repealed in this mark in addition to Oil Companies . No, senator. Okay. So why are we assuming a revenue loss for this provision . Does jcta believe the oil xaenl revenue will not be captured by the marks current inclusion of global intangible lodetaxed income . Does drilling a well not create a global lowtax intangible income . Well drilling wouldnt necessarily create global intangible lowtaxed income, senator. The estimate prs provided here reflect a lot of interaction between the different provisions. So i will have to ill have to provide you i dont want to waste your time by floundering here. Ill provide a more detailed explanation to you separately if thats all right. Thank you. Well, i think the question here is that current law was initially enacted to combat any kind of tax haven for these kinds of operations. So the Committee Report from which this provision was enacted stated because of complex structures, oil income is particularly suited to tax, even type activities, and the net as a result that Petroleum Companies have paid little or no u. S. Tax on their foreign subsidiary operations despite their extremely high revenue. So if we repeal that provision, will there be foreignbased fuel revenues that will never with taxed by the United States . Will we be creating a new tax haven for Oil Companies . My concern here is understanding why Oil Companies get a special deal on this. I think our colleagues would say, oh, no, no, this is about this larger repatriation, but if it is, then why do we have to give this additional tax break to them . And what haven are cree v we creating by doing that . So you can take the time and come back to us, but thats the concern i have with this provision. And its very costly provision. Its nearly 4 billion, so its a big cost and really want to understand the difference for Oil Companies versus other companies. Ill provide you more detail. Thank you. Thank you, senator. The committee will stand in vesz until 2 30 this afternoon. Well resume. Thank you. The Senate Finance committee continues its review of the gop tax reform bill at 2 30 eastern time. When they return, well have live coverage here on cspan3. Until then, heres some of the debate from yesterday. Lets get going. So, next amendment. Okay. Its coming from your side, i believe. Senator. Youre up. Thanks, mr. Chairman. Today this evening im pleased to say offer amendment 233. It would be carper amendment number 17. I would ask toak