[Congressional Record Volume 158, Number 58 (Monday, April 23, 2012)]
[Extensions of Remarks]
[Pages E612-E613]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       SMALL BUSINESS TAX CUT ACT

                                 ______
                                 

                               speech of

                        HON. SHEILA JACKSON LEE

                                of texas

                    in the house of representatives

                        Thursday, April 19, 2012

  Ms. JACKSON LEE of Texas. Mr. Speaker, I rise to speak out against 
the fallacy that is H.R. 9.
  I am always happy to support policy initiatives to stimulate economic 
growth and job creation and believe a private-public partnership during 
this time of economic recovery is essential.
  Unfortunately, H.R. 9, the so-called Small Business Tax Cut Act, is a 
broad measure affecting 99.6 percent of all businesses that is not 
targeted at job creation.
  The benefits it provides will be meted out unevenly and in an 
arbitrary manner, accruing in large measure to the wealthiest 
taxpayers.
  While these facts alone argue for its rejection, this temporary and 
expensive provision is also the very antithesis of tax reform. It 
couldn't be further from the truth.
  Yet again the Republican tax plan in the form of H.R. 9 would along 
with the Ryan Republican Budget Plan, serve to dismantle Medicare and 
instead hand older and disabled people a voucher toward the cost of 
private insurance. It's not a new or creative idea, and it will 
actually add more costs to families and to our Nation's bottom line. 
You cannot have a tax giveaway to a select few businesses while 
Medicare continues to suffer, ultimately hurting our most vulnerable.
  While claiming to ``preserve'' Medicare, the plan would actually 
imperil the community program and shift much of the costs to the very 
people it is supposed to help. As private plans aggressively court the 
healthiest and least costly beneficiaries, the traditional Medicare 
program would be left with an ever dwindling pool of beneficiaries--
those who are too sick and poor to purchase private insurance with the 
help of Mr. Ryan's coupon.
  In time, Medicare will ``wither on the vine,'' as those who oppose 
the program have long intended. Like last year's proposal from Mr. Ryan 
and last week's proposal from Senate Republicans, this plan does 
nothing to really preserve Medicare or to solve our Nation's 
skyrocketing healthcare costs.
  It only slams those costs onto individuals who can least afford them: 
older and disabled Americans, while jeopardizing their health coverage, 
adding profits to corporations, and letting millionaires off the hook.
  Similarly, the Supplemental Nutrition Assistance program is our most 
important anti-hunger program, with over 46 million Americans in more 
than 21 million households relying on it to help feed themselves and 
their families. Yet, by advancing H.R. 9 this Majority takes away money 
that could be used to shore up this program which serves the truly 
destitute.
  The Supplemental Nutrition Assistance Program, SNAP, is the 
cornerstone of the Nation's nutrition assistance safety net. SNAP 
touches the lives of over one in seven Americans. Indeed you could say 
that SNAP saves lives. Everyone's life is not as simple as some on the 
other side would have us believe--every person who is homeless cannot 
be fixed with magic dust and self-help policy prescriptions. Life is 
complicated and fraught with danger and uncertainty.
  Lucky are many of us who go home to warm shelter, food, and family. 
There, but for the grace of God go I.
  SNAP benefits are available to most people who meet the financial 
requirements, and the program serves a broad spectrum of low-income 
people. In Fiscal Year 2010, SNAP provided about $5.4 billion in food 
benefits to a monthly average of over 3.6 million people in Texas.

[[Page E613]]

  Another pressing issue is the encroaching and massive debt from 
student loans. In January President Obama stated:

       When kids do graduate, the most daunting challenge can be 
     the cost of college. At a time when Americans owe more in 
     tuition debt than credit card debt, this Congress needs to 
     stop the interest rates on student loans from doubling in 
     July.

  Student debt loan and the looming prospect of a massive interest rate 
increase is like a stealth tax darkening the horizon of borrowers 
nationwide. Indeed it is a ticking time bomb for students and families: 
If Congress doesn't act in 74 days, subsidized Stafford student loans 
rates will double from 3.4 percent to 6.8 percent.
  In 2007, Congress made an historic investment in higher education 
when we passed the College Cost Reduction and Access Act. Included in 
this legislation was a provision that reduced the fixed rate on 
Stafford student loans for undergraduate students. The College Cost 
Reduction and Access Act lowered subsidized Stafford student loan rates 
from 6.8 percent to 3.4 percent over a four-year period easing the 
burden on thousands of students and their families.
  However, despite the ever-increasing cost of a higher education and 
the challenging job market graduates face, without Congressional action 
these rates will double later this year and cost students and families 
thousands of dollars over time.
  In their zeal to avoid picking ``winners and losers,'' the majority 
has embraced a massive $46 billion tax cut that is being offered in the 
name of small business but will go to 99.6 percent of all businesses, 
whatever the value of their assets or the amount of their income and 
irrespective of the nature or function of their business.
  The tax break is available to partnerships of highly paid 
professionals, including lawyers and lobbyists. It is available to 
hedge fund and private equity fund managers. By restricting the 
definition of small business to an employee count and ignoring other 
relevant factors, such as revenues, H.R. 9 guarantees that the benefit 
will be available to a host of businesses that are anything but small. 
For example, many professional sports teams would get the tax break.
  H.R. 9 is not targeted at job creation. Any number of measures could 
have been included in H.R. 9 to limit the availability of the tax 
benefit to businesses that hire or invest in the United States.
  None of these measures was included. There is no requirement that a 
business receiving the deduction created by H.R. 9 expand employment.
  In fact, a business that reduces employment remains eligible for the 
deduction. Even worse, businesses that reduce their American workforce 
while expanding overseas still get the tax break. In contrast to 
measures such as bonus depreciation or expensing, there is no 
requirement that a business receiving the tax break invest in the 
United States. And in contrast to measures such as infrastructure 
spending, this one-time tax cut for the very wealthiest would have a 
relatively small effect on cumulative economic output.
  The benefit provided by H.R. 9 is arbitrary. In the case of small 
business owners, the same amount of small business income will not 
always produce the same benefit. Because the benefit is a deduction and 
not a credit, the value of the benefit increases with income.
  In addition, because the size of the benefit can be limited by a 
taxpayer's taxable income, losses that reduce or eliminate such income, 
including losses carried forward from prior years, can eliminate the 
benefit.
  Preliminary analyses indicate that H.R. 9 is a $46 billion tax cut 
disproportionately benefitting the very wealthiest Americans.
  Although a distributional analysis by the Joint Committee on Taxation 
is not yet available, the Center on Budget and Policy Priorities 
indicated that, based on an analysis provided by the Tax Policy Center, 
approximately ``49 percent of the tax cut provided by H.R. 9 would go 
to the 0.3 percent of people with incomes exceeding $1 million in 2012; 
they each would receive an average tax cut of more than $44,000.''
  Middle- and low-income families are struggling to recover from the 
deepest recession in decades; they have lost jobs, homes and retirement 
security. The Republican Majority for months resisted extending the 
payroll tax cut benefitting these families. But now, the Majority is 
rushing to put forward another tax break for the very wealthiest 
Americans.
  Given that this Committee has spent the last year and three months 
talking about tax reform, perhaps the most striking thing about H.R. 9 
is that it is the antithesis of tax reform. The House Republican budget 
assumes that this Committee will produce a tax reform package with two 
rate brackets, but it offers no clear indication of how to finance rate 
reductions that would cost trillions of dollars.
  The only hint we have gotten is the vague promise of the House Budget 
Committee chairman to eliminate what he calls ``tax loopholes.'' But to 
raise sufficient funds for his tax reform plans, his definition of 
``tax loophole'' would have to include provisions related to health, 
education, home mortgage interest, and pensions.
  These are not ``loopholes.'' Rather, in many cases, they are 
provisions designed to achieve clear economic and social policy goals. 
Ironically, H.R. 9 would be a new tax expenditure and a temporary one 
at that. And it would have far less merit than policies, such as the 
mortgage interest deduction and the exclusion for employer provided 
healthcare, that now appear to be in the majority's crosshairs.
  Mr. Speaker, I cannot in good conscience support a measure that takes 
away from Medicare, the SNAP Program, and dollars that could be used to 
mitigate the devastating effect of sharply escalating interest rates on 
Stafford student loan.
  Let's reject this bill and move on to real job creation, tax reform 
and deficit reduction and not the sham version before us this morning.

                          ____________________