That is congresses inhouse group. Thes congressman chairs means and ways committee. To workers, families and throughout this nation. Begin, we all recognize the terrible tragedy in texas. Our hearts are heavy and our prayers go out. The families and loved ones. And 10victims as well texans fighting for their lives as we convene today. It has been more than three americas tax code had been reformed over president reagan. Today, we come together to fix a tax code that has been just as broken as the one Ronald Reagan overhauled in 1986. Our committee is has dedicated a substantial amount deliver tax reform to the American People. Over everyd hearings aspect of the Nations Health laws. Weve had three Different Committee chairman and over this time we have engaged discussion. Ith over 60 Committee Members all of our efforts have led to this moment. On the tax cut and jobs back. Today, we stand on the doorstep of delivering the most sweeping tax overhaul and more than 30 years. Day is nottake, this about us. It is about providing relief to american workers, families and job creators. About making americas economy stronger than ever. Under the tax cuts and jobs asked, middle come middle income families will see a tax cut of nearly 1200. This means you get to keep more of what you earn and under this get jobs and paychecks rolling again. Ording to the nonpartisan wagesl increase gdp and in this bill will create nearly one million jobs throughout this country. This is what it means for the American People. Middle income families will see their aftertax incomes go up by roughly 2600 nationwide and coasttocoast the era of stagnant wages is over. In california, middle income ofilies will get a boost 2900. In texas, more than 2500. In new york, over 2700. This growth comes directly from the bold reforms included in the tax cut. Under this bill, we deliver the lowest tax rates for american businesses of all sizes. Stopke strong action to american jobs from going overseas. We give businesses and workers a tax code that will help them , especially here at home. From top to bottom, tax cuts and jobs is the most transformational since president reagan. For me, this bill is far more of programs. Tion this is a restoration of basic freedom that all americans reserve deserve. This is freedom from a tax code so complex that for every day americans, you have to spend hours or days filing your taxes. It seeking can you imagine a tax code word each of us knows what each of each others deductions are because we have exactly the same one . This is liberation from high tax rates that punish hardworking americans while Washington Special interests get a pass. This bill is more than just fundamental reform. It is a fundamental departure from a tax system of special interests, by special interests and for special interest. With this bill, there will be real complicity for every american. In closing, i want to thank every member of this committee who contributed to making the state possible. I cannot be more proud to be here with you. Also know that members of the house have great ideas and some have priorities that are not ultimately included in this bill. Let me assure you this is the beginning of the tax reform process. I continue to welcome your input. I can also assure you this is. Ot the last tax markup i look forward to working with all of the on additional policies to help our families and grow our economy. Having said that, this is our moment to make tax reform a reality for the American People. Way thatson in a bold they deserve. Thank you. We show you the empathy of the victims yesterday. I believe the bill is a bad idea, particularly those in the middle class. Legislation which was crafted by the Majority Party behind closed doors and was not made public forcesate last week millions of American Families to watch as their taxes go up. That is not what the American People asked us to do and it is not something that we as democrats intend to support. In 2001, republicans offered a tax or cut of one point treat joining dollars. In 2003, republicans offered a tax cut of 1 trillion. Promised jobey growth. However, they took us to the ,asino each time without a win so why do you think we will have a win without this proposal . Followingased on the premise. Maybe there will be free percent growth. Maybe there will be more investment, but we can also say based on the three examples i have cited, maybe not. We have one million new veterans to care for and we cannot afford another gamble. I have called upon our colleagues to Work Together real reform. I agree with my republican colleagues that our tax system is far too complicated and holds back american businesses from competing. However, i dont agree that should give reform more benefits to the welloff and wellconnected with the hope that it might trickle down. Mainstreamt a single perspective economist that will argue with tax cuts paying for themselves. History has proven it does not work. Last time, the process was different. 1986 was by an bipartisan mayor from start to finish. That included 30 hearings on the bill and testimony from 450 witnesses. This is a missed opportunity. I believe instead of the closed process, if we Work Together on would havebasis, we developed a bill that was better for our economy and businesses. There is everything that everyone can agree on. Change. T obama offers a this could be negotiated and we are missing the opportunity. That should have been the starting point for negotiations. They are struggling. For years, they are struggling. We might think those americans might have been left behind. This legislation does not do that. It lets the American People got it every step. It provides the needed improvements in trying to keep their head above water. We believe instead of pulling down the ladder of opportunity, the millions who aspire to it should be expanding that opportunity to make sure everyone has a fair shot. The legislation is flawed. Young parents who want to know the joy of adopting a child to pay back their Student Loans. Let me remind my colleagues the consideration we have today. Also, just a week ago going after americas Retirement Savings plan. Eventually, i will remind all if this doesnt work we will be back to the very issues. I worry that this impact will have a huge influence on our housing market. Leave leadably to lower homebodies and private which are issues i champion during my career. Mr. Chairman, we can no longer accept the status quo. Afford to only care about deficits. I hope that this time, mr. Chairman, we can set aside this bill and start again often manner that provides real reform to real people and gets the economy growing again. Before we get started, i like 19,nnounce pursuant to rule a recorded vote is requested. Time, i offer an amendment explainingistributed i will now turn to tom bartel. Out as the members holder question until after the presentation. Offer a motion pursuant to clause for a moving to postpone consideration of this bill until next tuesday, november 14. Thank you. I know you feel passionate about this. Thank you. I have felt passionate about it once before. The last time a asked for this committee to give us one. Dditional week the majority adopted of the a bill that President Trump declared a mean bill to use his own words. I believe today with this legislation, it has gone much further and the damage that could be done to our economy and families is much more for reaching. The motion im presenting at this time requests that we convene next tuesday after youve had an opportunity to notice. Sight, notve is in delay. Incredibly, for this legislation of so many years, this plan has never had a single public hearing, nor this in a member of the Trump Administration have the courage to sit at the desk and answer questions about this bill. No Expert Witness has been given the opportunity to explain the or get a billcy approved without a cbo score. I dont know of a time in history of this committee when it has ever attempted to enact legislation with such shallow analysis. That is despite our efforts, we still lack the tax returns of President Trump and his entities that might show how he and his family will personally benefit. If that is not enough, we had a new development yesterday. And that is thanks to yesterday, the release of the first information about the Paradise Papers concerning offshore tax avoidance in bermuda and other tax havens. These are explosives regulations revelations. Avoid theirvilege taxes and bermuda or caymans or somewhere else, its individuals and Small Businesses that having end of having to pick up the tab. We have tried on several occasions to get this committee or subcommittee to take action, including hearings. Unfortunately, we have been denied that opportunity. These new reports from yesterday raise new questions about a number of trump allies, his billionaire buddies and multinational corporations that have so much to gain from todays bill. Clearly, they will not submit their taxes on a postcard. May submit their taxes last year, 18 times as much money was reported as profits by maria than the entire gross mess it product of the country. Advisor, hasonomic been the president of so many offshore firms they barely fit on the new graphic explaining this. New taxng this provision gives us new reason to at least have one public hearing. Mr. Chairman, i would just the trumpike immigration policy, we need to learn from this experience. Extremel needs some vetting to find out all aspects of this. If you dont have anything to hide about this bill, a week and one public hearing will not impair your efforts. Trust me, itll be great, is not a plan. We cannot afford to trust this bill. I thank you for your consideration. You. The nose have it in the motion is agree to. I would request a recorded vote. Mr. Johnson, no, mr. The in as no. Mr. Reichert, no. Mr. Roskam, no. Mr. B cannon, no. Mr. Smith of nebraska, no. Miss jenkins, no. Mr. Paulson no. Mr. Marchant know. Miss black no. Mr. Reid no. Mr. Kelly know. Mr. Meehan know. Mr. Holding, no. Mr. Smith, no. Mr. Rice, no. Mr. Schweikert, no. Mr. Crivello, no. Mr. Bishop, no. Mr. Neil, yes. Mr. Levin, yes. Mr. Lewis, yes. Aye. Oggett, mr. Thompson, aye. Aye. Lumenauer, mr. Kind, aye. Higgins, yes. Misrule, yes. Chairman brady . Chairman brady, no. 1 caller yays, 24 nos. I asked our members to holder questions until after the presentation. Thank you mr. Chairman, we have several documents prepared by the staff of taxation which describes the underscore best the legislation. The also have supplemental information. There a many changes in this legislation and i will try to give an overview of the important points. Tax, hrndividual income one would change our system for. Ax brackets and comeit is remain unchanged. Another change is the legislation nearly doubles the standard production for married joint filers. Filers, 1200. The alternative minimum income repealed. Be in addition to the rate rateuled above, a special applicable to income earned by certain pastor business entities. This rate would be a rate of 25 . It would not apply to professional services. Rate would apply calculation inor which they taxpayer calculates their income as they other would 70 would be treated as labor theme and 30 with capitalsource income and taxed at 25 . This provision would allow out of theo prove safe harbor. In addition, the change made by the legislation is that it increases the Child Tax Credit. It creates a second tax credit for the taxpayer in the taxpayers spouse. That separate credit as a value of 300. Separateone, that credit expires after five years. Modifieslation also the American Opportunity tax credit, while repealing several. Ther provisions in terms of deductions, it retains itemized seductions. The interests of present law. Then the itemized for charitable contributions. We changed the deduction for Real Estate Property tax although capping is valued at 10,000. The other itemized deductions would be repealed under the legislation as would be a number of exclusions and above the line the directions provided by present law. The legislation would double the present law exemption equivalent amount of the estate and gift taxes approximately the exemption amount is under 5. 5 million. The doubling would make the amount approximately 11 million. That would apply to individuals before 2024. After 2023, the estate and Generation Skipping taxes would be repealed and the gift tax which would be retained would be modified and have its rate reduced from 40 to 35 . With respect to business income and business taxpayers, the Corporate Tax rate would be lowered from its present law statutory rate of 35 to 20 . The alternative minimum income tax applicable to corporations would be repealed. The bonus would be expanded to instead of a 50 firstyear deduction, it would be a 100 firstyear deduction applicable 2022. Through the year undern 17 179 which present law permits amounts by qualified business is up to , that00 to be expensed to 3tion would expand million. The legislation would expand certain Small Business relief such as relief from a cruel accounting methods and certain inventory methods for any business that has annual gross receipts of 25 million or less. The legislation would place a new limitation on net interest expense that may be claimed by Business Enterprises of any type area the limitation would interest applied to that is in excess of 30 of the business entities adjusted tax able income. There is an exception for Real Estate Enterprises and Small Business. The legislation would repeal the existing section 199 domestic reduction activities deduction, it would repeal all business credits retaining the research the low incomeng housing tax credit. The legislation would terminate the authority to issue private activity tax exempt bonds and it would repeal advance refunding of all taxexempt bonds. It would modify the calculation of Life InsuranceCompany Reserves and modify certain discount rules for property and casualty reserves. With respect to crossborder Business Enterprises and investment, the legislation would provide a 100 dividend exemption system. It would convert the present law worldwide tax system to eight a territorial tax system. The safeguards in terms of tacit income would generally be retained. In connection with the change from a worldwide tax system to a territorial tax system, there is a provision or transition that provides redeemed repatriation of earnings held offshore that and been untaxed unrepatriated. It provides face erosion protection. It provides a new interest le which changes present law to look at a comparison of interest expense relative to income in the United States compared to interest expense relative to worldwide income of multinational enterprises. It would create a regime that definedclude certain high return income as part of a subpart inclusion at half the ordinary rate. Returned means is income, they would be current taxation, effectively attempt percent tax rate. A 10 tax rate. It would provide an election to certain taxpayers of related ofated to in the case taxpayers who have greater than 100 million annually in crossborder related party payments. It would impose an excise tax on those payments or let those taxpayers elect to be taxed as if they had connected income. They could elect to be taxed on for where certain foreign costs are allocated to the income earned in the u. S. The legislature would make legislation would make rules toack that apply organizations. Highlevel overview of the many significant changes proposed by hr one. I would be happy to answer to questions the members might have for more details or further extrication. Chair either any questions . You describe the distribution table that you provided on the bill we are acting on today. Yes. Arton the distribution analysis that 4917 ded is in jck jcx 4917. We have a detailed explanation on what goes behind it on our website. What we try to do here is we look at what changes affect individuals, what changes affect business, but we look at the economic principle that ultimately, businesses do not pay taxes, those taxes are borne somewhere else so there is an incidence assumption based in it which we think is consistent with the substantial amount of empirical economic literature. I think the table speaks for itself in terms of looking at changes in average tax rates that would result totaling the effect from business changes and individual changes. That is what you see on an every other year basis from starting with 2019 through 2027. To you consider those to be in the individual bucket or both . Mr. Barton the table combines everything. If you are referring to supplemental table that we provided on the last page of where we broke this into an individual component and business component. As i explained in the walkthrough we take the maximum rate on passthrough income as an individual tax rate issue. The rate affect of the passthrough proposal is part of the individual analysis in that summary table. The business provisions such as the denial of certain interest expenses, the expensing provisions, the change for Small Business, some of those will affect C Corporations and some will affect S Corporations which are passthroughs. We included that in the summary breakout table. Mr. Neil is that true that it eliminates the deduction for state and local income taxes . Mr. Barton the individuals those that could be claimed under present law would be revealed. Eliminatedoesnt it the deduction for general local and sa