[Congressional Record Volume 163, Number 166 (Monday, October 16, 2017)]
[Senate]
[Pages S6384-S6385]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                       Tax Reform and the Budget

  Madam President, now a word on the Republican tax plan.
  This week, the Republican majority will likely move to pass a budget 
resolution that includes reconciliation instructions to increase the 
deficit by $1.5 trillion. Amazingly, it also includes a total of $1.5 
trillion in cuts to Medicare and Medicaid. Cutting taxes on the wealthy 
to be paid for by cutting Medicare and Medicaid? How many Americans 
want that--Democrat, Republican, Independent, liberal, conservative? 
The GOP budget makes it as clear as day that the Republicans will try 
to pay for a massive tax cut for the wealthy by cutting Medicare and 
Medicaid. It is the same formula they used for TrumpCare--cutting 
healthcare to pay for tax cuts for the rich. The American people rose 
up against that plan, and it failed. This plan should fail for the same 
exact reason.
  Now the White House is out with a new report today, which reads that 
a giant tax cut for big corporations will increase wages for middle-
class Americans. President Trump complains about fake news. Well, this 
is fake math, and it is as bad as any of the so-called fake news the 
President has complained about. This is a deliberate manipulation of 
numbers and facts that, quite frankly, is appalling. History shows that 
tax cuts like these benefit the wealthy and the powerful to the 
exclusion of the middle class. History shows that corporations will use 
tax cuts for CEO bonuses, stock buybacks, and dividends rather than for 
increasing worker pay or creating new jobs.
  In fact, none other than Goldman Sachs concluded that shareholders, 
not workers, ``typically get most of the benefits of tax cuts.'' This 
is not a liberal think tank or Chuck Schumer talking; this is Goldman 
Sachs, which represents shareholders--a lot of them. The two authors of 
this plan, Gary Cohn and Steve Mnuchin, who are from Goldman Sachs, 
should heed what their former employer says. Even Goldman Sachs is 
saying that the Trump tax cuts will not create massive growth or new 
jobs or higher wages. In fact, another recent report by Goldman Sachs 
predicts only the most minor growth effects from this tax cut, not more 
than 0.1 or 0.2 percent.
  As the President likes to point out, the stock market is at record 
highs, and companies are raking in unprecedented profits; yet wages 
have remained relatively flat. The companies are already flush with 
money--record profits. They are not creating jobs; they are enriching 
their shareholders and enhancing their CEOs' salaries with stock 
buybacks. It is proof positive that companies already have the cash 
reserves but do not use them to boost wages.
  To assert the opposite, which is that giving corporations and the 
wealthy a tax cut leads to higher middle-class wages, belies the facts 
and the history, and it is a blatant attempt to fool Americans into 
thinking that the GOP plan would benefit them when in reality it is a 
sop to the rich. No wonder our Republican friends cannot talk about 
what the plan does--cuts taxes for the wealthy and powerful. They have 
to hide it and say that this is job growth. Those are fake numbers, and 
I would like my friends on this side of the aisle to admit that they 
believe in trickle-down economics, because that is what their plan is 
all about.
  Rather than helping the biggest corporations avoid paying their fair 
share, tax reform ought to reward those companies that create jobs and 
raise wages here at home. Similarly, tax reform ought to directly 
benefit the middle class, but the Republican tax plan slashes a key 
middle-class deduction in the form of the State and local 
deductibility.
  Now let's talk about Vice President Pence. He is visiting Buffalo, 
NY--a city I love in my home State. Since Vice President Pence is 
traveling to Buffalo, I thought that I would share some numbers about 
how the elimination of the State and local deduction affects western 
New York.
  In Representative Collins' district, which stretches from East 
Buffalo toward Rochester, 29 percent of the residents claim the State 
and local deduction. They get an average deduction of $12,125. In 
Representative Higgins' district, which is in the heart of Buffalo, 27 
percent of the residents claim the State and local deduction, with an 
average deduction of $12,083. In Representative Reed's district, which 
is just south and east of Buffalo, 22 percent of the residents claim 
the State and local deduction, with an average deduction of $11,716. 
Their constituents get clobbered, as do just about all New Yorkers and 
so many in the rest of the country, when you eliminate the State and 
local deductibility. It affects the middle class and the upper class. 
The State and local deduction elimination is a dagger to the heart, not 
just to Buffalo but to Rochester, Syracuse, Albany, and all of Upstate 
New York.
  Will Vice President Pence have the courage to answer questions about 
this deduction elimination? Will he tell middle-class New Yorkers that 
they are going to get a huge tax increase under this bill? When the 
Vice President arrives in Buffalo tomorrow, I hope he is prepared to 
explain why he wants to hike taxes on thousands of middle-class 
families in the Buffalo area, in the Rochester area, in the Syracuse 
area, and in the Albany area.
  Eliminating the State and local deduction hurts the middle class, and 
it hammers the New York economy. Businesses, if they do not have this 
State

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and local deduction, are not likely to relocate in Buffalo or Rochester 
or Syracuse or Albany. It also hurts homeowners. Make no mistake about 
it--if we get rid of the State and local deduction, the values of homes 
will go down. That is why the realtors are so opposed to this 
elimination. It is not just true in New York or in California or in 
Connecticut or in New Jersey; it is true across the whole country.
  As for my dear friend and chairman of the Finance Committee's State 
of Utah, because of the great charity of his people--and so many 
tithe--35 percent of the taxpayers will get a huge, huge increase in 
their taxes with the elimination of State and local deductibility. So 
many of them do not use the standard deduction because they are so 
charitable, but they are penalized for that charity.
  Eliminating the State and local deduction, while slashing taxes for 
the wealthy and huge corporations, will hurt middle-class taxpayers.
  Now there are some efforts to compromise State and local 
deductibility. They don't work. Some have proposed letting taxpayers 
make a choice between getting rid of the mortgage deduction and getting 
rid of the State and local deduction. That is like saying: Should I 
chop off my left hand or my right hand, Mr. Middle-Class Taxpayer?
  Others have said: Let's limit it to people who earn below $100,000. 
That still leaves lots of people at risk, particularly in high-priced 
areas like Long Island, and it doesn't reduce the deficit by much. It 
is estimated that a large percentage of the deficit will still go up.
  It makes no sense to eliminate State and local deductibility. Vice 
President Pence ought to go to western New York, but instead of going 
just to a small business--and we want to lower small business taxes--he 
should go to a middle-class family in Amherst or in Orchard Park or 
Tonawanda and tell them that he is there to raise their taxes.