[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.