Mr. President, reserving the right to object. The distinguished Senator from California said that if we choose to proceed, we will have a vote tomorrow at 11:30 on this bill. I think her actions are premature, so I do object. Mr.…
Mr. President, reserving the right to object.
The distinguished Senator from California said that if we choose to proceed, we will have a vote tomorrow at 11:30 on this bill. I think her actions are premature, so I do object.
Mr. President, it is my understanding--and I am asking the Presiding Officer--that under rule VI, No. 4, at 7 we are going to be presented with a live quorum call. Is that not correct? Is that the schedule for the Senate? I am asking to determine how much time I have between now and 7 o'clock.
It says, for those who take the time to be familiar with proceedings of this distinguished body, that:
Whenever upon such roll call it shall be ascertained that a
quorum is not present, the majority of the Senators present
may direct the Sergeant at Arms to request, and, when
necessary, to compel the attendance of the absent Senators,
which order shall be determined without debate; and pending
its execution, and until a quorum shall be present, no debate
nor motion, except to adjourn or to recess pursuant to a
previous order entered by unanimous consent, shall be in
order.
So I thank the President for making that very clear. Hopefully, that sheds some light on what we are doing on a Monday evening, which some Senators would simply call a bed check. We are scheduled to vote at 11:30 tomorrow on whether to proceed with a debate that has been taking place here on the Senate floor. I think that obviously would be the time for the debate. But I think I have about 20, 25 minutes here to make my comments. I shall proceed.
We are really talking about a tax bill. I know the authors of the bill, the people who have spoken before, obviously think it is a major issue. It is a very important issue, but what we are really talking about is bringing to the floor a debate that raises taxes on U.S. companies and makes them less competitive globally. I don't think that is a very good idea, a tax increase on these companies, given the difficult times we have and given the difficult times we have in our export markets, to make our U.S. companies that deal
overseas less competitive. But I don't think we should be surprised, given that the majority has not yet acted to keep taxes from increasing for families and small businesses--everybody--come next January. That is the real bill we should be considering. That is the bill we certainly should be considering before we adjourn until the lameduck session of Congress which I assume is still being planned.
It is most unfortunate that we are going to a lameduck session of Congress. I had a constituent say: Lameduck; that is going to be a Daffy Duck. I think that is a little harsh given the intent of both Houses of Congress, but what we really ought to be talking about is the tax increase that is going to take place in less than 90 days unless Congress acts. I know there was a great discussion within the majority caucus as to whether we should move on that, whether we should take a vote on that, both in the House and the Senate. That is really why I come to the floor.
This is a looming tax increase that will take effect next year. It is going to hit every American who pays income taxes. There has already been a great deal of debate about who will pay these higher taxes. The President and many of his supporters in Congress say they will not raise taxes on those families earning under $250,000 or individuals earning under $200,000. That was a campaign pledge of the President.
The American dream--or at least it was when I was growing up, and I had hoped it would be for my kids and grandkids meant one could climb the ladder of success, the ladder of economic success as high and far as they wanted, and nothing government-made or manmade would stand in their way, except they had to do the climbing. Now we find that when you hit $250,000, if you are filing a joint tax return or if you are earning $200,000 individually--you are rich. They describe people who earn over $200,000, $250,000, and regardless of their obligations, regardless of whether it is a small business, and regardless of what those circumstances may be, bingo, they are going to have to pay that higher tax rate. So we have somebody in Washington describing in manifest detail who is rich and who is not in the United States. I find that to be the antithesis of the American dream, at least as I understood it. I think now there is a hue and cry of, let's level everybody with everybody else. I do not think that is where we want to be in terms of our national intent.
The health care reform law has already broken the pledge in regard to that of the President, the $250,000 and the $200,000, because that imposes a slew of new taxes on small businesses and health care consumers, including those earning well under these income levels. So we should be weary of any pledge by the President or the majority to protect taxpayers from the harmful tax increases that are set to take effect in January. With less than 90 days--about 3 months--left in the year, this administration and the majority in Congress have done nothing except talk about it in their caucuses and to find out where the votes were and to find out how it was playing before the election. That is the truth. Nothing to prevent this massive tax hike on American families and small businesses.
Now it is September. I don't think most families are really thinking about their income taxes right now. They should, but they are not. They put the frustration of April 15 behind them. Tax freedom day is somewhere down the road in April or May. That is when you are paying all the taxes, and that is where all of your income goes to government and you finally have tax freedom day. That becomes something that comes to their mind right off the bat in the spring. But some families were fortunate enough to able to take a vacation as of this summer or late summer. However, many were working instead and very happy to do so, given the situation in regard to jobs. They are just happy to have a job to provide for their families. But none of them are probably thinking about what is going to happen on January 1. They will be handing more of their paycheck over to Uncle Sam. That is exactly what is going to happen if the administration and the majority in Congress do not act and do not act soon. We should act before a lameduck Congress.
Some have dubbed this tax relief package the ``Bush tax cuts,'' saying they only benefit the wealthy. Let me point out, that is simply not correct. I don't see how continuing existing tax policy that has been in effect for 10 years constitutes a tax cut. It is preventing a tax increase. If we want to get partisan about it, it is not about a Bush tax cut, it is about a President Obama tax increase that we are trying to prevent.
Let's take a minute and look at how this tax relief passed on a bipartisan basis and supported by several Senators in the majority who are still serving in this body let's take a look at it and how it has benefited families and small businesses across all income levels.
The bipartisan tax relief doubled the child tax credit from $500 to $1,000. This credit amount will be cut in half next year. The bill lowered capital gains and dividend tax rates to benefit families who invest long term and save for their future.
These taxes will go up dramatically next year. If you read any financial publication, are aware of any think tank that deals with taxes and finances and the economic outlook for this country, you find out that is going to have a dramatic effect--a very unfortunate law of unintended effects. Those taxes will go up, as I said, very dramatically next year by as much as 33 percent for capital gains and 164 percent for dividends.
This bill lowered income tax rates for every taxpayer who pays taxes--I am talking about the 10-year existing tax relief--whether you are a lower income taxpayer, a middle-income taxpayer or an upper income taxpayer. So unless we act soon--and that is in the hands of the majority--taxes will go up for every taxpayer as of next year, and that is the bill we should be considering now, not a bill that is going to cause quite a bit of harm to every company that does business overseas.
Here are just a few examples of what this will mean to working families if the majority allows these provisions to expire: A single parent with two children who earns $30,000 will see a tax increase of $1,100 a year. A family of four who earns $50,000 will see a tax increase, on an average, of $2,100 per year.
Clearly, these families are earning well below the $250,000 threshold the President promised not to raise taxes on, these folks. Yet in just 3 months, that is exactly what is going to happen. So you might want to think about it, America, as well as what is going to happen down the road a little bit. You have Halloween. That is about when the lameduck Congress comes back. You have Halloween and then you have Thanksgiving, Christmas--not the time you are thinking about a big tax increase that is going to whack you right in the forehead, but that is exactly what is going to happen.
The President's supporters in the Congress have yet to introduce a bill to prevent this tax hike. It is that simple. We certainly do not see any language on a bill to prevent these massive tax hikes that go into effect on January 1.
However, the President and his supporters in the Congress say they want to extend tax relief for everyone but those taxpayers they say are wealthy. Who are these folks? Who are these wealthy taxpayers? Well, under the President's proposal, and presumably the proposal supported by most in the majority, it is any individual who earns more than $200,000 in income per year or any family who earns more than $250,000.
I know there are some who earn much less than these amounts who think that sounds fine. Well, maybe to some it does. It is always:
Don't tax me. I won't tax thee. Tax the guy behind the
tree.
There is a little bit of envy here that goes on among all of us, I think, in our hearts when we look at people who earn huge salaries. Somehow, some way that we have now defined those people at $250,000 and $200,000.
I think that is unfortunate because we all benefit--we all benefit-- when incomes increase and people become successful. That is how the economy gets turned around. That is how we have people who are entrepreneurs and they invest and they provide more jobs. When incomes go up and people have more of their own money to spend and invest as they see fit, more businesses are started, expanded, more jobs are created and--guess what--more income comes into the government.
There is a lot of money sitting on the sidelines waiting. If you do not take more money out of people's pockets, you will see, I think, a burst of economic activity that results directly or indirectly to the Federal Government.
I was just reading in the Wall Street Journal an article about that. I intended to bring it over, but I failed to do so. You can just take it from me. When incomes go up and people have more of their own money to spend and invest as they see fit, more businesses are started and expanded and more jobs are created.
To see the harm in raising the top two tax rates, to target those earning over the $200,000/$250,000 threshold, we only have to look at what allowing this tax relief to expire means for small businesses to see the danger in allowing this tax increase to take place.
Because many small business owners pay their taxes on their individual income taxes, if the top two income tax rates are increased as the President proposes, small business owners in these tax brackets will pay those higher income tax rates.
The administration says these higher taxes will affect only 3 percent of small businesses, so we should not be concerned about raising these taxes. If we have heard 3 percent, we have heard that enough over and over and over again: only 3 percent. But those numbers downplay the impact of raising taxes on small businesses.
Let's look at what such a tax hike would mean for America's small businesses. Keep in mind, these are the same businesses that, by the President's own admission, are the Nation's job creators. They create 70 percent of the jobs in this country--70 percent. Yet under the President's proposal, tax rates would increase by at least 17 percent on small businesses.
According to the nonpartisan Joint Committee on Taxation, that means three-quarters of a million businesses--750,000 small businesses--will pay higher taxes.
Allowing the top rates to expire subjects nearly $500 billion-- another $\1/2\ trillion--in small business income to higher taxes. This is a very conservative number. Further, small businesses with between 20 and 299 workers employ about 25 percent of the U.S. workforce. So we are taking action to raise taxes on 25 percent of the U.S. workforce.
These small businesses will have to recover the cost of higher taxes somewhere. It may come from lower wages. Will they lay off workers? Will they reduce benefits or raise the cost of their products? That is dicey, given this kind of environment in regard to consumers and what they are able to do. None are good options.
With unemployment holding steady at over 9 percent, common sense would indicate, that raising taxes on those businesses that are creating jobs is a very bad idea. As small businesses face a significant tax hike come January, workers will inevitably pay the price. By one estimate, an increase in the top tax rate would cost jobs by reducing small business hiring by as much as 18 percent. That is 18 percent we do not need.
Raising taxes on small businesses will also likely slow the already weak economic recovery. We see a lot of headlines saying: The recession is over. But let's talk about the economic recovery we all wish--both Democrats and Republicans, all of us wish--would take place. The National Federation of Independent Businesses, the NFIB, has said the second most cited concern of small businesses is taxes. As a result, small businesses are sitting on the sidelines until they know whether they are going to be facing higher taxes come January 1. That ought to be obvious. Small businesses need certainty about how much they are going to owe in Federal taxes.
Yet, once again, this administration's rhetoric on small business does not match the reality of its proposals. The administration says it wants to help small businesses, and it has touted the recently passed small business bill as proof of that. Yet this same administration pushes through a health care bill that Americans do not want that imposes higher taxes on small businesses. Now it wants to raise taxes even further on these same small businesses by increasing their Federal income taxes.
It seems a bit ironic to watch the majority touting the small business bill that the President is, in fact, signing into law today. They said small businesses needed this tax relief so they could grow, expand, and create jobs. During debate on this bill, they criticized Republicans for holding up important tax relief for these businesses.
So it is curious now, that many in the majority who supported this relatively modest tax relief and who repeatedly stressed the importance of tax relief to small businesses are the same ones who oppose extending income tax relief that benefits small businesses.
Let me make it as clear as I can. The same members of the majority who supported the small business bill and who insisted we must provide them tax relief are the very ones who oppose extending income tax relief that will benefit small businesses. That is a contradiction. That is tough to explain, it seems to me. I am pretty sure a lot of people are simply not going to understand that, especially in the next month or in November.
If it is so important to provide tax relief to small businesses in this bill, why isn't it equally important to extend other small business tax relief? We will not get our economy back on track until small business begins hiring, period, and they are not going to hire if they have to pay more taxes in January on top of what they have already been burdened with in the health care bill. Yet that is precisely what the administration's proposal will do.
Why would our colleagues on the other side of the aisle want to allow income taxes to go up at the end of this year for hundreds of thousands of small businesses? Why are we having a vote tomorrow on proceeding to another bill that could be very hurtful in regard to our competitors overseas. How does that aid the economy? How do higher taxes help put unemployed Americans back to work? How does a higher tax burden allow a small business to grow and expand? How do higher taxes on small businesses aid the economy?
The answer is pretty straightforward. Small businesses are hurt by higher taxes. They cannot hire new workers and they cannot buy equipment or a new building or make other investments that can help their business grow.
This approach by President Obama and the majority is absolutely the wrong approach to take if we want to ensure job creation and grow our economy. We need to continue the tax relief passed in 2001, by a big bipartisan majority, that has lowered income tax rates for all taxpayers and encouraged families to save and businesses to invest. Continuing this tax relief, rather than more spending, will help get our economy back on track.
What I usually hear from my friends--and I want to comment on it--on the other side of the aisle, especially when you talk about tax cuts-- you say: tax cuts, and then, bingo, for the rich, for the wealthy. We are beating a dead ``class warfare'' horse, it seems to me. But that simply is not an accurate picture of the massive tax increases that are facing American families next year.
The majority has been in power for nearly 4 years. They have had plenty of time to address this issue, plus estate tax reform, plus the AMT, plus all the other things we say we are going to do as members of the Finance Committee. I am privileged to serve on that committee. Yet, similar to a child who has not done his homework, they have put this off until the last minute, creating enormous uncertainty for families and small businesses.
They try to justify these massive tax hikes by saying this bipartisan tax relief contributed to the Nation's current fiscal problems.
The popular refrain Americans have heard from the President and his supporters in the Congress is that they inherited the current deficit, and that it is a result of the tax relief we passed, again, on a bipartisan vote, in 2001.
But the numbers do not add up. Did you know the Federal deficit decreased as the 2001-2003 tax relief took effect? The deficit stood at $412 billion in 2004 but dropped to $161 billion in 2007. That is the year the majority took control of the Congress. I was here. I know. I could list Senators on both sides of the aisle who made tremendous progress in regard to reducing that deficit from $412 billion in 2004 down to $161 billion in 2007--tough to do. We had Katrina,
had all sorts of problems, Iraq, two major wars, but we did that.
Three short years later, the deficit has more than quadrupled and this year is estimated to come in at approximately $1.3 trillion--not billion, trillion. ``Trillion'' has become the watch word of the day; not billion, trillion.
That is a direct result of the massive spending agenda the President and his supporters in Congress have undertaken, including a failed stimulus bill, bailouts of failed companies, and a health care bill that a majority of Americans do not want--growing by the day when they find out the details of the bill.
What is particularly ironic about all of this is that the President has seen no reason to offset the billions in Federal Government spending that he and his supporters have put in place--billions in new Federal spending on a failed economic stimulus program and billions to failed companies, billions that have contributed to the largest deficit in this country's history.
Further, the President has already said he doesn't plan to pay for the cost of extending about 74 percent of the expiring tax relief--that is about $2 trillion--that benefits lower and middle-income taxpayers. I am for that. Everybody here is for that. And that number is actually expected to go higher. Yet the remaining 26 percent of the tax relief-- that tax relief that in part benefits small businesses--the President doesn't want to extend. Why not? Here is the kicker. He says we can't afford it.
We can't afford it? This, from the same President whose spending spree has driven up the deficit to unprecedented levels? The same President who spent well over $700 billion on last year's failed stimulus program? The same President who handed out billions in Federal tax dollars to failed businesses? That is right. The President says we can't afford to extend income tax relief for small businesses to help them create jobs, grow, and continue to employ more than 20 million Americans who work for small businesses.
Well, we have a saying for this in Dodge City. It sort of resembles a lot of what we have in our Dodge City feedlots, but I am not going to go into that.
A recent observation by Kevin Hassett and Alan Viard with the American Enterprise Institute writing in the Wall Street Journal sums this up very nicely:
The administration is right to view the deficit as a
serious issue, but this sudden commitment to fiscal
responsibility is bizarrely inconsistent. The administration
professes deep concern about the $700 billion revenue loss
from extending the tax cuts at the top, but apparently views
the revenue loss of nearly $2 trillion from extending the tax
cuts for the middle class as too inconsequential to mention.
I repeat, again, we are all for that.
They continue:
Nor has the administration's concern about the deficit
driven it to reduce federal spending.
That is the key. It seems to me it is disingenuous for this administration to say we cannot afford to provide tax relief that helps small business and gets our economy moving in the right direction when the same administration has pursued failed policies of unrestrained spending that do little but grow the deficit.
We can and should provide tax relief to all taxpayers, and that should be the business of the day, not a live quorum call or a bed check and then go out this week and then come back in a lameduck Congress to debate that. Then it would be, what, 40 days before the ax would fall in regard to every American paying more taxes.
I ask unanimous consent for 30 seconds.
Thank you. We can and should provide tax relief to all taxpayers--tax relief that helps families keep more of their hard- earned dollars and tax relief that provides certainty to small businesses so they can make investments and create jobs without the fear that their taxes will go up. We need to extend this tax relief that keeps money in the hands of families and small businesses rather than putting it in the pocket of Uncle Sam.
I yield back the remainder of the time that the distinguished Presiding Officer granted me.