[Congressional Record Volume 163, Number 53 (Monday, March 27, 2017)]
[Senate]
[Pages S1984-S1985]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                         Border Adjustment Tax

  Mr. SCHATZ. Mr. President, last week TrumpCare died, and lots of 
people are trying to figure out exactly what happened. In my view, it 
was not a lack of strategy; it was not a lack of effort; it was not a 
lack of personal relationship between the Speaker and the President. It 
died because the policy stank. It died because people actually--left, 
right, and center--decided that cutting Medicaid by $900 billion in 
order to provide a tax cut for the wealthiest Americans of the exact 
same amount was just not a good idea in policy or in politics.
  Now that TrumpCare has crashed and burned, Republicans are 
essentially going to try to do the same thing--tax cuts for the rich. 
Yet, this time, instead of funding it by cutting Medicaid, they are 
going to charge people more for groceries. Here is their proposal: They 
want to cut taxes for corporations again. That is what they want to do. 
Whether one is talking about infrastructure or whether one is talking 
about healthcare or whether one is talking about so-called tax reform, 
their solution to everything is to cut taxes for corporations. They 
want to cut taxes for corporations again, but this time American 
families will pay for it through taxes on groceries and the other stuff 
they have to buy on a day-to-day basis.
  We have seen this before. It is a giveaway for corporations and the 
wealthiest among us, but, as usual, they have to find a pay-for, a way 
to make the arithmetic work, a way to pay for it. They are going to 
keep proposing so-called solutions for healthcare, infrastructure, or 
in this case tax reform, but they are basically the same proposal. It 
is a subsidy for Wall Street. It is because they cannot help 
themselves.
  This particular giveaway will cost the average American family 
thousands of dollars. Families will have to pay more for gas, medicine, 
clothes, cars, food. That is how a so-called border adjustment tax 
works. Everything one buys in the United States will be taxed, and 
everything outside of the United States will not be taxed. The sort of 
principle behind that is that somehow we are going to stimulate exports 
and disincentivize imports. It is not just that you are paying more on 
the stuff that is imported; it is that everything in the United States 
that you purchase you will have to pay more for in order to incentivize 
exports. But all you are doing is charging the American people more. 
This is essentially a sales tax.
  I talked to members of my staff, and they were trying to get into the 
sort of technocratic, legal details about whether it is technically a 
sales tax or a value-added tax or a border adjustment tax that fits 
into some other legal category. But for a regular person, it does not 
matter what you call it; if you pay more and the government is 
collecting it, it is an increase in taxes.
  They are going to dazzle you with complexity, and I think some in the 
House Republican leadership are very skillful at trying to make this 
more complicated than it is. They are trying to dazzle you with 
complexity so you do not know what they are doing. They are raising 
taxes on groceries and all of the stuff you buy. That is their version 
of tax reform.
  I can understand. The Tax Code is awful, it is a mess, and we have 
been trying to do tax reform for I think 30 years. It is not 
unreasonable for the average American to say ``Yes, you ought to reform 
the Tax Code,'' but, remember, when they talk tax reform, they want you 
to have to go to the store and buy a steak, a hotdog, a head of 
lettuce, gasoline, pillows, diapers, paper--whatever you need--and it 
is going to cost more with so-called tax reform. If they succeed, the 
average American family could pay up to $1,700 more per year in order 
that corporations can get their tax cuts. Think about what $1,700 means 
for families across the country. For a family of four, with two kids in 
middle school, $1,700 pays for a few months' worth of groceries. In 
Hawaii, $1,700 will cover rent for a month, and in lots of other 
places, it will cover rent for 4 or 5 months. For some people, it pays 
a year's worth of an electric bill. In the State of Hawaii, it will pay 
for 4 or 5 months of your electric bill.
  We know for certain this will hurt consumers, but on a macroeconomic 
level--in other words, for the entire country--we have no idea what a 
border adjustment tax would actually do in terms of our international 
relationships.
  I understand. I voted against the Trans-Pacific Partnership and the 
trade promotion authority. I have been very, very concerned about the 
extent to which we have not been getting the better of these trade 
deals, especially when it comes to people who are in unions across the 
country. But we do not want to engage in a trade war. We do not want to 
screw up American manufacturing, American farming. We have no idea what 
the impact would be. Even if one is willing to accept increasing the 
cost of goods in the United States for some theoretical possibility 
that this will incentivize exports, we have no idea what it is going to 
do to the American economy overall. Even in the best-case scenario, 
entire industries will fall apart.
  Take tourism. In 2016 alone, tourism supported nearly 5.5 million 
American jobs directly and almost 10 million more in industries like 
restaurants and retail. The tourism industry pumps $2.6 billion into 
our economy every day. That is more than $30,000 per second.
  I will say one other thing about tourism. As we worry about 
automation, as we worry about artificial intelligence, as we worry 
about a global economy that is going to eviscerate some of our core 
industries, tourism is one thing that cannot be taken away from us. If 
people want to go to Los Angeles, if people want to go to Cleveland, if 
people want to go to Hawaii, if people want to go to St. Louis, MO, or 
Kansas City, MO, or Florida, these are jobs that cannot be taken away. 
So if you want to infuse cash into an economy, create a tourism 
economy--all of these jobs and all of this revenue will be under threat 
if this works out the way they want it to work out because the dollar 
will be so strong that Americans will want to travel abroad and 
foreigners will want to travel far, far away from us.
  Why are we punishing consumers and small businesses? Why are we 
putting entire industries at risk? House Republicans will tell you it 
is because they think the corporate tax is too high, but here is the 
truth: Right now, major corporations have huge teams of tax lawyers who 
set up fake shell companies so that they get around paying Federal 
taxes at all, or they abuse loopholes to drastically lower what they 
owe to the U.S. Government. That is why we see some corporations that 
end up paying zero dollars in Federal income tax year after year even 
though they are making a healthy profit in the United States.
  Together, Republicans and Democrats should be going after these tax 
dodgers. Instead of just getting rid of loopholes, they have decided to 
tax consumers. This makes no sense, and that is why we have to stop it.
  Last week, we saved healthcare for 24 million Americans because 
people

[[Page S1985]]

across the country of all political persuasions stood up to fight. This 
week, the fight goes on. Once again, far too many people are in the 
crosshairs. I believe strongly that so long as we continue to stand 
together, we can win this one too. A huge tax cut for the wealthy 
cannot be funded by increasing the cost of groceries.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CORNYN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Lankford). Without objection, it is so 
ordered.