Mr. Speaker, I thank the gentleman for yielding, and I thank him for organizing this Special Order on this terrible Republican tax scam. This scam is a desperate, disgraceful attempt to line the pockets of the wealthiest Americans and…
Mr. Speaker, I thank the gentleman for yielding, and I thank
him for organizing this Special Order on this terrible Republican tax scam.
This scam is a desperate, disgraceful attempt to line the pockets of the wealthiest Americans and corporations at the expense of the middle class.
And for what?
We are told the corporate and upper income tax cuts will result in more investment, in greater economic growth, which will yield more jobs and more revenue for the country and higher wages for the middle class, but that is bull.
They have run this scam twice before. Ronald Reagan passed similar upper class tax cuts and told us they would generate such economic growth that they would pay for themselves. George W. Bush pulled the same scheme.
What happened?
President Reagan's cuts sent the national debt--the national debt accumulated from George Washington through Jimmy Carter, which was a little less than $800 billion in 1980--from $800 billion to $4.3 trillion 12 years later, quintupled.
President Bush's tax cuts turned the projected 10-year, $5.65 trillion surplus--remember at the end of the Clinton administration, we were having surpluses, and the projected surplus over 10 years was $5.65 trillion. His tax cuts turned that, in 8 years, into $10.63 trillion debt.
It turned a $5.6 trillion surplus into a $10.6 trillion debt. So the argument that these kinds of tax cuts for the upper-income people and for corporations generate greater economic growth to generate more tax revenues has been tried twice, not to mention in Kansas, recently. It doesn't work.
There is nothing in this bill to argue that this tax scam will have a different impact on the economy than Reagan's or Bush's. In fact, this scam is so skewed toward the rich and corporations, it could actually be worse.
The bill would eliminate the alternative minimum tax. To put it in perspective, in 2005, the only year for which we have at least the summary pages of Donald Trump's tax returns, in that year, Donald Trump paid $38 million in taxes. Of that, $31 million was the alternative minimum tax.
The Republicans want to eliminate the only tax that we actually know that Donald Trump has ever paid. His taxes would have been $5 million, not $38 million, if it weren't for the alternative minimum tax. Of course, he wants to eliminates it.
Republicans will repeal the estate tax, despite the fact that the estate tax is paid by only the wealthiest 5,000 estates in the country every year--two-thousandths of 1 percent.
Wealthy Americans would also see immediate personal benefits from cuts to corporate taxes. This bill immediately and permanently cuts the corporate tax rate to 20 percent from 35 percent. It also cuts the rates for pass-through corporations from 39 to 25 percent.
Once again, Republicans claim this will help small businesses, but it simply isn't true. These pass-through corporations are extremely wealthy partnerships and private companies. If you need a good example, I have a great one just outside my district; it is called the Trump Organization, which is organized as a pass-through corporation.
Now, they tell us that middle-income businessmen will profit by this, but middle-income businessmen are not paying more than 25 percent to start with, so this will only benefit the rich, again.
But while billionaires and corporations will enjoy all these benefits, the Republican bill hands working families ticking time bombs. Unlike the corporate tax changes, which are permanent and indexed to inflation, every benefit in the Republican tax scam for the middle class sunsets after 5 years or is indexed to a slower rate of inflation.
Speaker Ryan brags about a family earning $59,000 a year getting a $1,500 break in their tax burden next year. Well, even in his example, by 2023, that family is right back where they started; and by 2027, they will be paying $500 more than they were this year.
This bill wipes out nearly every deduction and credit that helps working families make ends meet--the deduction of State and local income taxes, which hundreds of thousands of middle-income New Yorkers rely on each year.
When the income tax was first enacted to finance the Civil War, and when it was re-imposed to finance World War I--and we have had it since then--we have always had a deduction for State and local taxes. Why? Because you shouldn't be taxed on a tax. You shouldn't be taxed doubly. It is unfair. But now we will be.
The medical expense deduction, which families use to pay for everything from fertility treatments to nursing home care, this deduction says: If you are a middle-income family, and your out-of- pocket expenses, beyond your insurance, if you have insurance, beyond your Medicare, if you are a senior citizen, total more than 10 percent of your total gross income, you can deduct your medical expenses to the extent it exceeds 10 percent of your total gross income.
So it has got to be large. If your income is $75,000 a year, you can only deduct the medical expenses that exceed $7,500, not the first $7,500. This will be gone, too.
Now, if you have got parents in nursing homes, you depend on this. If you have got a child with cerebral palsy--God forbid--if you have got a kid with cancer, you depend on this, but it is going to be gone.
The student loan interest deduction will be gone. So people go to school, they go to college, they come out with these terrible, huge debts. They have to repay the student loans. At least they can deduct the interest on the student loans. Not anymore.
The adoption tax credit, child care spending accounts, even deductions for teachers who buy school supplies for their classrooms, all gone. And why? To pay for tax breaks for billionaires and corporations.
But, as has been pointed out, under this scam, corporations keep these deductions for their income. They keep the State and local tax deduction, but individuals don't.
How can Republicans claim this bill helps the average American when families are denied the deductions that corporations get to keep?
If this bill is so blatantly harmful to working families, why are my Republican colleagues so crazy about it?
Does it create jobs or give the economy a boost? No. As I said, we have tried that twice before with disastrous results. Kansas, Brownbackistan as they call it, after Governor Brownback tried that, with disastrous results, so that the Republican legislature had to increase taxes earlier this year, over the Governor's veto, to start getting out from 4-day school weeks.
Under this plan, Republicans would tax companies less when they produce goods overseas than when they produce them here in the U.S. It is a giant incentive to large corporations to send jobs overseas.
And if you ever doubted the Republicans were doing this at the bidding of corporate donors, well, just last week, Chairman Brady, of the Ways and Means Committee, tweaked an excise tax multinational corporations opposed and gave those corporations back $100 billion in revenue. No such change was made for working families.
Now, we know--we know from experience--that a few years from now the Republicans will use the $1.7 trillion deficit this scam creates to say: Oh, my God. Look at this massive deficit. We have to make terrible cuts to Social Security, to Medicare, to education, to infrastructure, not that we want to. We love Medicare. We love Social Security, but we have got to savage them in order to pay for these terrible deficits which we created.
That is what they are building in now. That is what this tax bill is designed to produce.
The Republicans are scamming America. They are offering a facade of lower taxes that most Americans will never see, in exchange for massive and permanent tax breaks for the wealthy and corporations, and guaranteed cuts down the road, in fact, some of them right away, to Social Security, Medicare, Medicaid, education, infrastructure.
I do not accept that deal, and the American people shouldn't have to either. We can find bipartisan common ground that allows us to support working families, create jobs, and see every American pay their fair share.
American corporations, huge corporations, have $2.4 trillion stashed
abroad, which they don't pay taxes on until they bring it home. We don't have to allow that. We can make them pay taxes on it right away, whether they bring the money home or not.
Why should we encourage them to keep the money abroad, to create jobs abroad, by telling them they don't pay taxes if the money is abroad?
And the Republican bill just makes that worse. This Republican tax scam is not a fair plan. It is not a plan to increase the economy. It is not a plan for economic growth. It is not a plan for fairness to the middle class.
Let me just say one other thing. A number of years ago, while we were told--I have seen ads--we were told by the Republican leaders that the economic growth from this bill will produce huge gains for the average family. Never mind the tax cut that the average family will or won't get.
Because of the economic growth from this tax plan, wages will go up, and the average person will get $1,500 or $1,800 or $2,000, depending who you are listening to, in extra wages.
Well, a number of years ago, we were told the same thing about a bankruptcy bill. This bankruptcy bill that the big banks pushed and all the Republicans pushed, we were told that if we passed this bill, the banks would save so much money from certain deadbeats that the average American would save $400 a year in lower interest rates.
I offered an amendment to say: Fine, mandate that the interest rates be lowered. And, of course, the Republicans voted that down.
Well, we passed that bill. We passed that bill 12 years ago. Have you seen the interest rates go down? The interest rates are still sky high. The banks raked in the money, hand over foot. The lobbyists did very well. The Republicans collected the campaign contributions. The American people did not benefit.
Same thing here. There will be no increase in economic growth as a result of this bill. There will be no increase in benefits. There will simply be a huge sucking sound as the money is taken from the middle class and low-income people and given to the superrich.
This bill is disgusting. It ought to be rejected.
I do have one more point to make, and the gentleman reminded me of it.
In 2004, when we had the repatriation, we told the big corporations they could bring all the offshore money home and pay only a fractional tax on it; they were going to create jobs and so forth. And what happened? They didn't create jobs. They had buybacks. They enriched their executives. They didn't create jobs.
The fundamental problem with this analysis is not that corporations don't have enough money to invest, and, therefore, if you give them lower taxes they will have more money to invest; they have plenty of money to invest. They don't see the investment opportunities, and that is a different problem. There is plenty of money to invest. They are rolling in cash. There is not a dearth of investment opportunity. There is not a dearth of investment cash.
So if you give them more cash, they will pay their CEOs higher. They will put more money into stock buybacks. The shareholders may benefit, but they won't hire more workers. The economy won't benefit; and we will be taking money away from the middle class and lower-income people, and we will be taking money away from the governments, local governments, that have to spend the money on schools, housing, health, roads and bridges, and so forth to build up this country.