[Congressional Record Volume 163, Number 159 (Wednesday, October 4, 2017)]
[Senate]
[Pages S6313-S6315]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
The Budget and Tax Reform
Mr. MERKLEY. Mr. President, The most powerful words in our
Constitution are the first three words: ``We the People.'' It sets out
the mission statement for our Nation, or, as President Lincoln put it,
a nation ``of the people, by the people, and for the people.'' Our
Founders did not start out our Constitution with ``we the powerful'' or
``we the powerful and privileged.'' They didn't proceed to say that our
form of government is all about the powerful and privileged ruling for
themselves to make themselves richer at the expense of everyone else.
Thus, going back to the foundation, the vision of our Nation is
appropriate because our Republican colleagues have put forward a
document--a budget--with a tax plan that is all about government for
the powerful. It is all about self-serving government for the
privileged. There is nothing about fighting for a foundation for
ordinary people to be able to thrive here in the United States of
America.
Indeed, the plan put forward by my Republican colleagues is a plan
fit for a king living in a gilded castle--maybe
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fit for King Trump living in Trump Tower, but certainly not for working
Americans living and striving to build the wealth of America. No, this
is not a plan for them. This is a plan for the King Trumps of our
Nation, who believe they can deceive the country again and again by
putting forward an argument that they are going to do something to help
the people while writing it for themselves.
We can take a look at this and realize that the President himself
leads that effort to do the sales pitch when he unveiled his tax plan
at the National Association of Manufacturers last week. President Trump
said: ``My plan is for the working people.'' He said: ``There's very
little benefit for people of wealth.'' And he went on to say: ``I don't
benefit. I don't benefit.'' He repeated it twice.
Well, as soon as you look at the tax plan, you see that this is
wrong. He sent out his other Secretaries to reinforce his message.
Secretary Mnuchin showed up on the shows and said: ``The objective of
the President is that rich people don't get tax cuts.'' Well, that is a
little bit of lawyerly work there. He didn't want to confront the
reality that this plan is all about tax cuts for the wealthy. So he
said the objective wasn't to do that.
Well, let's talk about the reality. The bottom third economically
here in America get zero help from the tax provisions in this plan--
none whatsoever. Plus, the broader budget slashes Medicaid by about
$473 billion--you know, the one thing that has improved for working
people. It has been tougher in a blue-collar communities to get a full-
time job. It has been tougher to get a living wage. It has been tougher
to save for retirement, with pensions disappearing and employer-
supported retirement and savings plans disappearing.
One thing got better, and that is access to healthcare, thanks to
ObamaCare. In my State, over half a million Oregonians gained access to
healthcare. It didn't just help them; it helped everyone. The
uncompensated care rate went way down in hospitals and way down in
clinics, which meant stronger clinics and stronger hospital services
for everybody in the State. Everyone benefited.
So the one thing that has improved for working America the
Republicans in this Chamber wanted to rip it away--stomp on it, destroy
it, shred it. They couldn't bear the thought that working Americans
might finally have affordable, quality healthcare. They couldn't stand
the vision of healthcare as a right. They wanted to return it to
healthcare being only for the wealthy and the healthy, but not for
ordinary working people.
Well, the bottom third is totally unhelped--in fact, hurt by this
plan. How about the middle third? For the middle third--25 percent of
the middle third--taxes go up, not down. The tax bracket goes from 10
percent to 12 percent. For the seniors in middle America, this plan
takes a trillion dollars away from Medicare. Not only do my Republican
friends hate having healthcare for working people, but they want to
destroy healthcare for older Americans at the same time.
So if the bottom third doesn't benefit and the middle third has taxes
going up, who benefits here? Simple answer: It is the billionaires. The
millionaires and billionaires of America are those whom this plan is
written for.
Well, let's just look at the provisions that cost so much money to
the Treasury. The alternative minimum tax is wiped out. Remember how
the rich and powerful rigged the system so they were paying no taxes at
all? We here in America established an alternative minimum tax, saying
that, if you are wealthy, with a ton of money coming in the door, you
should pay at least a little. The one tax return we have for President
Trump shows he paid taxes because of the alternative minimum tax. That
is the only reason he paid taxes.
So when President Trump says he doesn't benefit, clearly that is
wrong. If he knows it is wrong, it is a lie. Let's just say he is
either incredibly ignorant or trying to be incredibly misleading about
the fact that this would benefit him enormously to get rid of the
alternative minimum tax.
What is the second thing it does? Where it raised the tax rate at the
lowest bracket for working Americans, it lowers the tax rate for the
wealthiest Americans, from 39.6 percent to 35 percent. That is a huge
reduction that benefits people at the very top, wealthy enough to be
paying in the top bracket. Certainly, President Trump, by his own
description of his own affluence, would be in that category. So
clearly, he benefits enormously from that.
The third huge provision is getting a special rate for passthrough
entities. Let's say you own a big development, like a shopping complex
or a Trump Tower, and it generates a lot of money and you pass it
through to pay your personal taxes from your limited liability
corporation. Well, instead of being charged 39.6 percent, the current
rate, or 35 percent, at the lower rate or at the corporate rate, no,
you get this special deal on this passthrough of 25 percent. So you
paid an enormous amount less.
Who benefits from this? Well, the people who own LLCs and pass
through huge amounts of money are the ones who benefit from this. Who
has a lot of LLCs? Who has, by various estimates, hundreds and
hundreds? I heard an estimate that the President has over 500 LLCs. So
if the President has hundreds and hundreds of LLCs, passing through
income that is lowered from a 39.6-percent rate to a 25-percent rate--
basically, a 15-percent reduction--he benefits enormously from this, as
do all of his millionaire and billionaire friends.
Finally, there is the estate tax. This one, I have to admit,
President Trump doesn't benefit from today because he hasn't died. But
when he dies, his estate would benefit massively. If he is taking out
insurance to be able to pay his tax bill when he dies, then he has to
take out less insurance. In that case, it does benefit him today. Most
wealthy individuals do have that kind of insurance investment to pay
the estate tax. A very small number of Americans fall into this
category, and that very small number have a whole team of financial
planners. That means that, yes, even though, technically, he wouldn't
pay the tax benefit until he dies, he pays less for the preparation of
paying that. As for the AMT, the lower tax bracket, the passthroughs,
and the estate tax, the President benefits enormously from every single
one.
There you have it. There is nothing for the bottom third. The middle
third get hit with Medicare being slashed, and also with an increase in
taxes for a good share of them, but the billionaires at the top benefit
enormously. Let's be fair. The President understands this. His advisers
understand it. His Cabinet is full of the types of individuals at the
very top--the 1 percent, the 0.1 percent--full of the richest
Americans. They wrote this plan for themselves and to hurt the rest of
America. That is shameful.
There is another provision that the President has put in that
probably helps himself, and that is cutting the corporate tax rate to
20 percent. It is keeping with the President's demonstrably false
statement that the United States is the most taxed nation in the world.
That is simply not true, as a percentage of GDP. We have seen the share
of tax revenue that companies pay decline.
Here we have the argument that somehow there will be prosperity
because we reduce the tax rate. Let's look at those companies that
already pay less than 20 percent in corporate taxes because of the big
difference between the nominal rate--the stated rate of corporations--
and the reality of what they actually paid. A report from the Institute
for Policy Studies analyzed 92 U.S. corporations that paid less than 20
percent in corporate taxes. Did they find that these firms have medium
job growth of 20 percent? No. Ten percent? No. Five percent? No. Zero?
No. It is negative 1 percent. There is negative job growth even though
these companies paid less than 20 percent in corporate taxes, while the
private sector job growth over those years as a whole was 6 percent
positive. So those paying less than 20 percent had negative 1 percent
growth, while the entire private sector grew with job growth at 6
percent. In fact, during that period, these 92 firms that were
studied--in fact, just a fraction of them, or 48 of them together--
eliminated basically about half a million jobs. They had very low
taxes.
The argument is that they will do more because they don't have to pay
as much taxes. They will expand the number of people they hire. But
instead,
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they slashed half a million jobs--just 48 of these firms that pay less
than 20 percent.
What happened to the CEOs of those firms? Their salaries went through
the roof. Part of the plan here is that you cut as many people as you
can, and you have a net profit increase. Sometimes, even when you
don't, you get a big increase.
So if we take this as a model of what the President wants to achieve,
he wants to empower other companies to follow this track of having this
model of slashing hundreds of thousands of jobs and jacking up the
salaries of the already richest CEOs in the country. Who were these
companies?
AT&T had an effective tax rate of 8 percent. Wouldn't that be nice
for middle-class Americans, to have an effective tax rate of 8 percent?
While they had that beneficial 8 percent tax rate, they slashed 80,000
jobs and doubled their CEO's pay to $28.4 million. Think of how many
ordinary working people would have a better life if they raised their
pay by one dollar an hour. But no, the CEO slashes 80,000 jobs and
raises to pay himself $28.4 million.
How about GE, which boosted its CEO's pay nearly $18 million in 2016,
while cutting 14,700 jobs over 9 years and achieving a negative tax
rate? A negative tax rate--get that. They didn't pay a dollar to the
National Treasury--not a dollar. They had a negative tax rate. The
company got more money back from the government than it paid in taxes.
How about ExxonMobil? Between 2008 and 2015, they had an effective
tax rate of 13.6 percent. That is way below 20 percent. In that time
period, did we see a significant growth in the number of people they
employed because they got this hugely beneficial 13.6 percent tax rate?
No, we did not. In fact, they cut their global workforce by a third. At
the same time, the CEO of that company, who just happens to be our
Secretary of State at the moment, saw his compensation grow to $27.4
million.
The record shows that these companies that are getting these low tax
rates are slashing their employees and boosting their CEO salaries. Is
that the model that makes for a prosperous middle-class America, slash
jobs and a dramatic increase of inequality in this country?
That is why this entire tax plan and the budget are so diabolical. It
is everything contrary to ``we the people.'' It is a vision of
basically hijacking the National Treasury to inflate the wealth of the
wealthiest in America, while doing as much harm as possible to working
Americans, laying down a model on the corporate side of rewarding
companies for slashing hundreds of thousands of jobs and inflating the
salaries of their CEOs.
Here is the question every Member of this Chamber should ask: Is your
priority adding more zeros to the bank balances of millionaires and
billionaires? Is that your mission? Are you at work here not
representing the people of your State but just millionaires and
billionaires? If you are, then you should be full-throated supporting
the Republican tax plan and the Republican budget on the floor of this
Senate. But if you believe in the mission of the United States of
America, the ``we the people'' mission of providing a foundation for
families to thrive across this land, then there is no choice but to
take this budget and this tax plan and shred it, destroy it, burn it,
put a stake through its heart in every way possible.
I, for one, believe in this mission of ``we the people.''
Thank you.
The PRESIDING OFFICER (Mr. Toomey). The Senator from Illinois.
Mr. DURBIN. Mr. President, I ask unanimous consent to speak as in
morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.