[Congressional Record Volume 163, Number 194 (Wednesday, November 29, 2017)]
[Senate]
[Pages S7499-S7505]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                    TAX CUTS AND JOBS ACT--Continued


                 Orders for Thursday, November 30, 2017

  Mr. McCONNELL. Mr. President, I ask unanimous consent that when the 
Senate completes its business today, it adjourn until 10:30 a.m., 
Thursday, November 30; further, that following the prayer and pledge, 
the morning hour be deemed expired, the Journal of proceedings be 
approved to date, the time for the two leaders be reserved for their 
use later in the day, and morning business be closed; finally, that 
following leader remarks, the Senate resume consideration of H.R. 1, 
under the previous order.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                         Order for Adjournment

  Mr. McCONNELL. Mr. President, if there is no further business to come 
before the Senate, I ask unanimous consent that it stand adjourned 
under the previous order, following the remarks of Senators Portman, 
Van Hollen, Warren, and Wyden.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Ohio.
  Mr. PORTMAN. Mr. President, tonight I want to talk about the 
opportunity we have before us in the Senate, and that is for tax reform 
that can truly help our economy and help the middle-class families we 
represent. It is a once-in-a-generation opportunity.
  The last time we reformed our Tax Code in any substantial way was 31 
years ago. Ronald Reagan was President and Pete Rose was still playing 
for the Cincinnati Reds. That is how long ago it was. In 1986, tax 
reform gave our economy a much needed shot in the arm, and it led to 
more jobs and higher wages in the 1980s and 1990s. Now, 31 years later, 
after a decade of disappointing growth and flat wages, we need that 
shot in the arm again.
  We need a tax code that better reflects the needs of today's workers, 
today's families, and our 21st century economy. There is bipartisan 
agreement that the Tax Code is broken--hopelessly broken--and it is up 
to Congress to fix it. No one else can.
  Through the Tax Cuts and Jobs Act now before us, we have a chance in 
the Congress to create a better economy and a better future. We have to 
get this done for the people we represent. It starts with tax cuts for 
the middle class. While the economy has seen some improvement recently, 
and I saw some good numbers today for last quarter's growth, the people 
I represent, hard-working Ohioans, and people across the country are 
not feeling these benefits of a growing economy. For more than a decade 
now, expenses have increased, including healthcare costs, which have 
increased the highest, at a time when wages have been flat. When you 
take inflation into account, wages have stayed relatively flat for 
almost two decades. That increase in expenses and flat wages is the 
middle-class squeeze, and people are feeling it.
  For years, my colleagues on both sides of the aisle have been calling 
for middle-class tax cuts to help ease this burden. The Tax Cuts and 
Jobs Act will actually deliver. The proposal helps us in a lot of ways 
but three main ways.
  First, there is a doubling of the standard deduction. This is a 
doubling

[[Page S7500]]

for families from $12,000 to $24,000. That means, for a lot of families 
in America, the first $24,000 is a zero tax bracket. Two-thirds of 
Ohioans already, by the way, use the standard deduction. The estimate 
is, now that we are doubling it, over 90 percent of Ohioans will use 
that standard deduction. That helps to keep the tax bill down but also 
is a tremendous simplification of our Tax Code.
  Second is the doubling of the child tax credit. That is in this 
legislation. The American dream starts with the American family, and 
parents shouldn't have to reconsider starting a family because of the 
financial burden that comes with it. This doubling of the child tax 
credit will help working families afford childcare and will help 
strengthen middle-class family budgets all across the country. By the 
way, it includes increasing the refundability of that tax credit for 
taxpayers who don't have any income tax liability.
  Third, of course, is lowering tax rates. There are tax rates that are 
lowered all across the board for middle-class families. The independent 
Tax Foundation estimates that the tax cuts in this proposal will save 
an Ohio family at the median income level 2,375 bucks a year. That 
almost $2,400 a year is a big deal. A lot of the people I represent and 
others represent here in this Chamber are living paycheck to paycheck, 
and this matters. More money staying in the pockets of working families 
to make that car payment, to pay for healthcare, maybe put a little 
money aside for retirement, is a big deal.

  We also know from the Tax Foundation that the lower rates in this 
plan will benefit families across middle-class income brackets. For 
example, a family with two kids making $50,000 a year will see a 36-
percent tax break, a 36-percent reduction in their tax liability. For a 
family with two kids making about $85,000 a year, there is a 20-percent 
reduction in their tax liability. And for a family with two kids making 
about $165,000 a year, there is an 8-percent reduction in their tax 
liability. So there is tax relief across the board, but the biggest 
proportional tax cut goes to the folks who need it the most.
  This chart shows this. For people who are in these income 
categories--$20,000 to $50,000, $50,000 to $100,00, $100,000 and 
above--right now paying 4.3 percent in taxes from $20,000 to $50,000, 
under this proposal, according to the Joint Committee on Taxation and 
the Tax Foundation, it goes down to 4.1 percent. So the burden is 
reduced for people at the lower end. From $50,000 to $100,000, the 
burden is also lower, from 16.9 percent to 16.7 percent. For those 
people with $100,000 and above, the burden right now is about 78.7 
percent. The top 10 percent of wage earners pay about 70 percent of the 
taxes. That actually goes up from 78.7 to 78.9.
  So this notion that we have heard today that somehow these middle-
class tax cuts are not proportionally helping those at the lower end is 
simply not true. This is the data. Go on jct.gov--Joint Committee on 
Taxation--and look for yourself. Go on the Tax Foundation site, and you 
can look at your family income, look at your situation, and determine 
how doubling the standard deduction, doubling the child tax credit, and 
reducing tax rates will benefit you. The biggest proportional tax cuts, 
again, go to people who need it the most.
  In total, by the way, when these tax cuts are implemented, it is 
estimated that approximately 3 million Americans who are currently 
paying taxes will no longer be paying income taxes. They will be off 
the rolls altogether. That is tax cuts for middle-class families, for 
families who need it the most.
  Some of my colleagues on the other side of the aisle have suggested 
that our plan will hurt families with incomes below $30,000 because 
there is a Joint Committee on Taxation report that, because of arcane 
budget rules, counts repealing the individual mandate as a tax hike. 
This is an interesting perspective, but I reject it because I don't 
think stopping the ObamaCare individual mandate and people choosing not 
to buy health insurance and therefore not having both the cost of the 
Affordable Care Act and the ObamaCare tax credits that come with that 
healthcare is a tax hike. In other words, what they are saying is that 
because somebody doesn't choose to buy healthcare partly because it is 
too expensive and therefore doesn't get the tax credits that come with 
that, that somehow that is a tax hike. That doesn't make sense to me, 
and I don't think it makes sense to most Americans.
  What the Joint Committee on Taxation did say repeatedly at our 
committee markup 2 weeks ago is that when you don't consider this 
issue--again, choosing not to buy healthcare insurance a hike--that our 
plan does give every single income group, including those under 
$30,000, a tax cut. As noted earlier, the biggest percentage tax cuts 
goes to those with lower incomes, and that is appropriate. Those are 
the folks who need it the most.
  What we do know is that right now the individual mandate is an 
onerous tax by itself. The Supreme Court has called it a tax. It is a 
tax on people that disproportionately affects lower to middle-class 
Americans. In fact, 80 percent of the individual mandate falls on folks 
making less than $50,000 a year and their families. In Ohio, by the 
way, that figure is about 83 percent. Eighty-three percent of that 
individual mandate tax falls on people in households that make less 
than $50,000 a year.
  Getting rid of this penalty removes the financial burden unfairly 
affecting those working families, and then we use the savings from 
that, that the Congressional Budget Office says we get from this, to 
increase the child tax credit and to reduce tax rates on the middle 
class. That is one reason we have better middle-class tax cuts in our 
bill.
  Providing immediate relief to the family budget is incredibly 
important, but beyond that, the tax reforms on the business side will 
make American workers and companies more competitive, create more jobs 
and better wages, and that, to me, is just as important in terms of 
helping middle-class families in my home State of Ohio. Why? Because 
when you reform the business tax code to make it competitive, the 
benefit goes to workers and working-class families all over this 
country.
  The United States now has the highest corporate tax rate in the 
industrialized world. One study by the nonpartisan Congressional Budget 
Office estimates that workers bear 70 percent of the burden of our 
corporate tax rate being so high. Others say it is less than that, and 
others say it is more than that, but all say that workers benefit. If 
we lower that rate below the average of the other industrialized 
countries, our workers will benefit through higher wages and better 
benefits. And by the way, that benefits middle-class families well 
beyond these direct tax cuts we were talking about earlier.
  A recent study by Ernst & Young, the accounting firm, said that if we 
had had the tax rate that we have in this proposal--a 20-percent tax 
rate--on these businesses, if we had had that in place since 2004, 
there would be 4,700 more U.S. companies today. Let me repeat that. 
They are saying that 4,700 companies that were American companies have 
become foreign companies because of our Tax Code, and if we had put in 
place these changes back 13 years ago, those companies would still be 
American companies, hiring more American workers, and investing more 
money here.
  We did some research on this, some investigation in the Permanent 
Subcommittee on Investigations over the past few years, and we 
determined that, in fact, when companies are taken over by a foreign 
company because of our Tax Code or when U.S. companies choose to go 
overseas and invert because of our Tax Code, what happens? We lose 
jobs, and we lose investment here in this country. It matters, and it 
matters a lot to the communities where those employees are lost and 
where those businesses have left. The 20-percent tax rate is going to 
mean more jobs and more investment coming right here to this country 
instead of going overseas.
  It is also true that there will be more foreign investment here. 
Companies are now trying to decide whether they are going to invest in 
America or whether they are going to invest in some other country with 
a lower tax rate, and with the expensing we have in this bill, to be 
able to write down new investments they are making, it is going to 
encourage them to make an investment here in the United States

[[Page S7501]]

rather than in other countries. That will increase jobs too.
  By the way, the Tax Foundation estimates that because of the new 
investment and the higher productivity that comes with it because of 
this tax reform proposal, we will create nearly 1 million new Americans 
jobs and more than 35,000 jobs alone in my home State of Ohio.
  In addition to providing relief for middle-class families and making 
business rates more competitive for American companies and workers, 
this tax reform does a lot to level the playing field internationally. 
This is very important. Right now, American workers are forced to 
compete with one hand tied behind their back because of our Tax Code. A 
broken tax code is something that must be fixed because it is 
irresponsible to tell the American people: You have to get out there 
and compete, but guess what--your foreign competitor has a big 
advantage over you.
  It is crazy that Congress has allowed this opportunity to go by for 
so many years. The situation where companies are actually encouraged to 
move overseas and keep their profits overseas makes no sense. Right 
now, it is estimated there is between $2.5 trillion and $3 trillion of 
earnings trapped overseas because of this outdated Tax Code. Think 
about that. That money can come back here and be invested here in 
plants and jobs and equipment. The Tax Cuts and Jobs Act says to those 
companies: We want your money back here. We want you to invest in 
America. The result will lift the economic condition of our entire 
country.
  This week, 137 of the country's leading economists wrote an open 
letter to Congress in support of this tax reform bill. These former 
heads of government agencies, leaders of economic policy groups, and 
leading academics said, quite simply:

       Economic growth will accelerate if the Tax Cuts and Jobs 
     Act passes, leading to more jobs, higher wages, and a better 
     standard of living for the American people.

  That is by 137 economists in an open letter. I encourage you to take 
a look at it online. These are people who understand what the impact of 
the policy we make here is going to be on decisions that are being made 
all around the country.
  We can debate the exact growth amount that will result from this 
bill, and we will have a spirited debate on that this week, but we all 
have to agree that this will help to grow the economy if we are 
following basic economic theory.
  By the way, their letter also states that ``$1 trillion in new tax 
revenue for the federal government can be generated by four-tenths of a 
percentage in GDP growth.'' In other words, what they are saying is 
that if there is just a slight increase in economic growth because of 
this tax reform bill, compared to the number we have to use here, that 
this will result in actual new revenue coming in to the government to 
pay down the debt. I am convinced that is going to happen for a very 
simple reason. We have to use a very low number on economic growth. 
Under our rules, we have to use a CBO--Congressional Budget Office--
number of 1.9 percent economic growth over the next 10 years. By the 
way, the average over the past 30 years has been 2.5 percent. We just 
learned today that the average last quarter was 3.3 percent. The 
average the quarter before that, the second quarter, was 3.1 percent.
  This tax reform proposal will help to actually increase economic 
growth, but even if you don't believe that, 1.9 percent economic growth 
is unacceptable. We cannot accept that as a country. We can and must do 
better than that. We will do better than that, and this tax reform 
proposal will be one reason. So I am convinced that the four-tenth's 
increase--up to 2.3 percent--is still very conservative and that we 
will be able to do better than that, as we have over the past 30 years, 
as we have traditionally in this country.
  When you hear my colleagues on the other side talk about this bill 
being bad for the deficit, I think you ought to think about that. This 
means that they are resigning themselves to 1.9 percent economic 
growth. That, to me, is not acceptable for our country, and I don't 
think that is what we will see.
  Of the $44 trillion in new revenue estimated to be coming in over the 
next 10 years, yes, out of that amount, we are suggesting $1.5 trillion 
be a tax cut relative to that, again, very low economic growth of 1.9 
percent.
  About a third of that, by the way, is by simply using what we should 
use, which is the right policy baseline, so you end up with about $1 
trillion in tax relief. And again, over 10 years, with $44 trillion 
coming in and with what the economists are saying about it generating 
more revenue through economic growth, I am convinced we are going to do 
better than that 1.9 percent.
  I believe the pro-growth changes in this bill will help drive 
economic growth in ways that help every American family. We are in a 
position now, if we pass this bill, to be able to help all the people 
who are now looking at a tough time making ends meet--it is difficult 
for a lot of people living paycheck to paycheck--but it will also help 
to grow the economy generally.
  Businesses and organizations all around the country are supporting 
this legislation because they believe it is going to help American 
families. We have about 120 groups already as of yesterday who are 
supporting us: the National Federation of Independent Business, which 
is the group that represents most of the small businesses in America; 
the Family Business Council, which represents a lot of small businesses 
that will benefit greatly from the changes we have not just with the 
corporation rate but also with how we deal with companies that are 
considered to be passthrough companies, the smaller companies. The 
National Retail Federation is strongly in support of this bill. The 
Small Business and Entrepreneurship Council supports this reform plan 
and the opportunities it has to create more economic growth for small 
businesses, to let them be more competitive.
  You can look at some of the groups here, some of the roughly 120 
groups that are supporting this legislation. Why? Because they know it 
is going to help. Big businesses will benefit and be more competitive; 
therefore their workers can compete. Through these pro-growth policies, 
small businesses are going to be able to grow and be more 
entrepreneurial, to come up with more innovations and expand 
employment.
  We can estimate the savings for the middle-class family in every tax 
bracket, as I said, but what can't be measured as easily is the 
economic boost this is going to have for everybody. We are giving 
families freedom to spend more of their own money the way they see fit. 
We are putting faith in the American entrepreneurs and businesses to 
compete in a global market. We are bringing back some of that money 
that is locked up overseas. We are creating a fairer tax system that 
encourages jobs and investment here in this country rather than 
overseas. That is all good stuff.
  The Tax Cuts and Jobs Act is made in America and it is made for 
America. We need to come together now as a Congress--and I hope we will 
get support from the other side of the aisle as well--to pass this 
once-in-a-generation legislation to benefit our country.
  Thank you, Mr. President.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Scott). The Senator from Massachusetts.
  Ms. WARREN. Mr. President, Senate Republicans are about 24 hours away 
from passing a bill that would make middle-class families in this 
country pay more taxes so big corporations and millionaires can pay 
less.
  A bill like that would never really make sense, but it really, really 
doesn't make sense right now. Since 1980, corporate profits have shot 
through the roof, while wages for working people have remained pretty 
much the same. With corporate profits up and family incomes flat, who 
is paying the cost of running the government? Thanks to Congress, over 
the past 50 years, corporations have gone from picking up about 25 
percent of what it costs to run the government to picking up about 9 
percent or, to say it another way, hard-working families now pick up a 
much bigger share of the cost of running our government.
  I don't care whether you are a Democrat or a Republican, this just 
isn't fair. Corporations are wallowing in profits while hard-pressed 
families are picking up the bill for our military, for our government 
agencies, for homeland

[[Page S7502]]

security, for our infrastructure, and for everything else we have to 
pitch in to pay for.
  Here comes the Republican tax bill, which would make a bad situation 
worse. The Republican tax bill would slash taxes on corporations even 
further and raise taxes on millions of working families. It is hard to 
comprehend how deeply unfair that is. A survey released last May by the 
Federal Reserve found that 44 percent of American families--just a bit 
under a half--don't have enough slack in their budget to cover a $400 
emergency expense. If the transmission blows up or if a kid gets sick 
or the fridge stops working, these families are just plain out of luck. 
These are the same families whom the Republicans have targeted to pay 
more in taxes under the Republican plan.
  In trying to sell a bill that is deeply unfair, Republicans have 
landed on a tried-and-true strategy--just lie about it.
  The first big lie is that the plan will supercharge economic growth. 
Spoiler alert: It will not. We have seen this movie before, and we know 
how it ends. There is not one single credible projection that says this 
plan will have any meaningful impact on the growth of the American 
economy. One group of economists after another has looked at this bill 
and said it will not do a darn thing to help the economy grow.
  Even Wall Street banks--which stand to pocket billions of dollars in 
tax giveaways from this bill--have grudgingly had to admit the bill 
will not lead to any growth. Barclays Bank said: ``A permanent boost to 
growth remains unlikely.'' Goldman Sachs said: ``We find a boost to GDP 
growth of 0.1-0.2 [percentage points] in 2018-2019 and smaller amounts 
in subsequent years.''
  The second big lie is that if we just give corporations more money, 
they will surely do us the favor of raising wages or creating more 
jobs. We have seen that movie before too. Over the last 30 years, 
corporate profits have exploded, and companies have not trickled down 
those profits to workers. They didn't do it before, and they will not 
do it after the Republicans give away even more money to these giant 
corporations.
  You don't have to take my word for it. The top executives at the 
companies have already admitted as much. Bank of America and Merrill 
Lynch surveyed 300 CEOs about what they would do with their tax 
giveaways. What are they going to do with those tax giveaways? The top 
three responses: pay down debt, buy back stock, and fund new mergers. 
In other words, something for the banks, something for wealthy 
investors, and nothing for workers.
  The third big lie is that the plan will not increase the national 
debt. That is just plain false. The nonpartisan Congressional Budget 
Office says this bill will tack on $1.4 trillion to the debt in the 
next 10 years, and we all know what comes next. The same Republican 
Senators who will vote for this trillion-dollar budget buster tomorrow 
will turn around next week and say our national debt is just too high, 
and we need to cut Medicare, Medicaid, Social Security, education 
funding, affordable housing, and you name it. In fact, the Republican 
budget they passed last month tees up more than $1 trillion in cuts to 
those very programs.
  This bill raises taxes on millions of middle-class families, and it 
doesn't create any real economic growth. It doesn't create any real job 
growth, and it explodes the national debt. So this bill clearly is not 
about helping working families.
  You really have to stop and ask the question, What is it about? The 
answer is simple. This is about Republican Senators paying off the rich 
corporate donors that helped get them elected. It is about the way that 
money has corrupted Washington. It is about wealthy donors investing a 
few million dollars in political contributions to secure billions of 
dollars in tax giveaways.
  Here is what one of my Republican colleagues said recently: If we 
don't pass a tax bill, ``financial contributions will stop.'' A 
Republican Member of the House was even more blunt. He said on the 
record that his donors told him to pass this tax bill or ``don't ever 
call them again.'' In other words, Republicans have said to each other 
they need to pass a tax giveaway to give their donors money in order to 
get reelected. This is a smash-and-grab job.
  The Republicans are looting the U.S. Treasury so their donors will 
keep funding their reelection campaigns. They don't even try to hide 
the corruption, and they don't worry about how many middle-class 
families get hurt in the caper. My take on this is pretty simple: I 
don't think a single middle-class family in this country should pay 
more in taxes so big corporations and millionaires can pay less. I 
think big corporations should pay more--not less--so we can cut taxes 
on working families and small businesses, so we can make investments in 
fixing our roads and our bridges and our power grid, so we can help 
young people reduce their student loan debt.
  This is about basic fairness. We can build an America where every kid 
has a shot at success, where every family has some measure of economic 
security, where every senior has enough savings to retire with dignity. 
We can do that, and we can start by defeating this Republican tax 
giveaway.
  Thank you.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. VAN HOLLEN. Mr. President, let me start by thanking the Senator 
from Massachusetts for always telling it like it is because what we 
have before us in the Senate is going to do grave harm to our country, 
not just next year and the year after but for many years to come. We 
still have an opportunity to stop that from happening through our votes 
tomorrow.
  Let me also say at the outset that we need to enact tax reform in the 
United States of America. We need to simplify. We need to streamline. 
We need to reform our Tax Code. We need to get rid of all of those tax 
loopholes that had been put in our Tax Code by powerful special 
interests that have been able to hire high-priced lobbyists and get 
something in our Tax Code, not because it is good public policy, not 
because it is good for the majority of Americans but because it is good 
for some group of special interests.
  We need real tax reform. That is not what the bill in front of us 
does. What this bill does is take a Tax Code that is already stacked in 
favor of the most powerful and the most wealthy and rig it even more in 
favor of the most powerful and the most wealthy, and that is hard to 
do. You have to work at doing that.
  Our Republican colleagues have succeeded in taking something that was 
already stacked in favor of those groups and making it even worse. That 
is why we see this effort to jam this bill through the Senate in just a 
few weeks because our Republican colleagues know the more the American 
public sees this bill, the more they will hate this bill, and the more 
they will realize it is going to mean their taxes are going up, in many 
cases, and harm to the American economy.
  We debated the effort to repeal the Affordable Care Act in the 
Senate, not for a long time but at least over a couple of months' 
period. What happened is, as that debate went on, more and more people 
around the country engaged. All the nurses, all the doctors, and all 
the hospitals--I mean, rural hospitals, suburban hospitals, urban 
hospitals--said that is bad for our healthcare. This Senate, at the end 
of the day, did the right thing.
  Unfortunately, the lesson learned was not to get the input from the 
American public but try to rush something through before people can 
figure out exactly what is in it, and that is what is happening in the 
Senate today and tomorrow.
  One example of the harm this bill will do hasn't gotten a lot of 
attention. I want to talk about what this bill does in its changes to 
how we tax U.S. corporations that have operations overseas. These are 
big multinational corporations that have operations in the United 
States but also have the ability to move their plant and equipment 
overseas and hire people overseas instead of hiring Americans here at 
home. There is a provision in this Senate Republican bill that is going 
to dramatically increase the incentives for U.S. multinational 
corporations to move operations and jobs overseas, and here is why. 
Under this bill, American corporations that are doing business in the 
United States will pay a 20-percent corporate tax rate. It reduces the 
corporate tax rate down to 20 percent, but

[[Page S7503]]

it also says something else. If you are an American corporation and you 
move your operations overseas, the profits you make on your overseas 
operations pay zero percent U.S. tax rate.
  Immediately, you have an incentive to move your business from 
Baltimore City--or from any other city in this country or place in this 
country--to another place that has a lower tax rate. For example, 
Ireland has a 12.5-percent tax rate. If you move your business to 
Ireland, you are going to be paying 12.5 percent on your profits 
instead of the 20 percent you are paying here. If you move to Hungary, 
you are going to pay 9 percent on the profits you earn in Hungary; 
whereas, you would have paid 20 percent on your profits if you keep 
those operations in the United States. So immediately you have an 
incentive to move those operations overseas.
  Even if you move those operations to a country that has a higher tax 
rate than, say, Ireland or Hungary, there are easy ways to put those 
profits you earn in a place like the UK or Japan and put them in lower 
tax areas like the Cayman Islands or Bermuda. Right off the bat, this 
creates a perverse additional incentive to put American jobs overseas.
  So our Republican colleagues say: OK. Not to worry. We have a fix for 
this issue. We are going to create this minimum U.S. tax on large 
profits of overseas operations. In other words, if you are a U.S. 
corporation, you move to Ireland, you can make a certain amount of 
money there, but if you go over a certain amount, we are going to put a 
minimum American tax on top of the tax you pay in Ireland.
  This is a problem when you rush through a bill like this. The problem 
is, the cure is worse than the disease. Here is why. Look at this 
chart. First thing you say is, there is a lower tax rate in Ireland 
than in Baltimore City so I am going to move some of my operations 
overseas--my plant and equipment. In fact, I am going to move $10 
million of investment overseas. Now, in Ireland, I am going to be 
paying 12.5 percent on my profits, versus 20 percent here in the United 
States. That is a pretty good move.

  Now let's see if this minimum tax has any impact and what the impact 
would be. Well, what the Republican tax bill says is that if your 
earnings overseas exceed 10 percent of your investment in tangible 
property--what is tangible property? The plant, equipment, your 
factory. So if you spend $10 million and move your plant, equipment, 
and factory overseas, you are going to be able to make a 10-percent 
profit there with no additional U.S. tax. But if you earn more than 
that--let's say you earn $1,200,000--instead of a 10-percent return, 
which would have been $1 million, aha, now this minimum tax applies but 
just to that excess profit. So you are now going to pay the lower tax 
rate in Ireland on your first million, but you are going to pay 10 
percent on the $200,000. So you are going to pay $20,000 in U.S. taxes.
  What if you don't want to pay even that? Here is what is so 
outrageous about this bill. I don't know if it is intentional or 
unintentional. If I am a U.S. corporation, the way I fix this problem 
is I move another $10 million worth of plant and equipment out of 
Maryland into Ireland. So now I have got my $10 million investment that 
I moved from Baltimore to Ireland, and I am going to move another one. 
Now, as long as I keep my overall returns to 10 percent, I am not going 
to pay that excess minimum tax. So if my first company has a 12-percent 
return and the second one has an 8-percent return, together they have a 
10-percent return. So I end up, by moving more plant and equipment from 
the State of Maryland to Ireland, that I don't even pay that minimum 
U.S. tax.
  In fact, every time I get close to having to pay that minimum U.S. 
tax, I can solve my problem by moving more American jobs overseas. That 
is insane. I hope our colleagues will take a look at this, because this 
is going to do great damage to the American economy.
  You don't have to take my word for it. You have a lot of economists 
who have taken a look at this provision. I am just going to read from 
one. His name is Edward Kleinbard. He was the former chief of staff of 
the Joint Committee on Taxation. We all know they are the 
professionals. They are the nonpartisan professionals who analyze these 
bills. Here is what he had to say: ``The administration's tax cut 
proposal is coupled with a territorial tax system, which permanently 
exempts foreign income from taxation; this will further tilt the 
playing field in favor of foreign, rather than U.S., investment.''
  I ask unanimous consent that the other quotations from the economists 
be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       Jared Bernstein, senior fellow, Center on Budget and Policy 
     Priorities; former chief economist to Vice President Joe 
     Biden:
       ``The Republican tax plan . . . . is likely to lead to more 
     outsourcing of U.S. jobs and a larger trade deficit. The tax 
     plan moves to what's called a territorial system of 
     international taxation, which means the U.S. tax rate on the 
     overseas earnings of U.S. foreign affiliates would become 
     zero.''
       Rebecca Kysar, professor of law, Brooklyn Law School:
       ``A pressing goal of tax reform is to reduce the incentives 
     for companies to move their operations overseas. This bill 
     does the opposite.''
       Kimberly Clausing, professor of economics, Reed College:
       The House and Senate Republican tax bills create a 
     territorial tax system that ``exempts foreign income from 
     U.S. taxation. This tilts the playing field even further 
     toward doing business abroad rather than at home, since there 
     will always be countries with lower rates. A territorial 
     system makes explicit and permanent the preference for 
     foreign income over domestic income. It accelerates the 
     profit shifting behind our corporate tax base erosion 
     problem.''
       Carl Levin, former senator:
       ``The House and Senate tax bills would be a monumental 
     mistake for the country for many reasons, but one compelling 
     reason is the disastrous way they treat foreign corporate 
     profits and encourage companies to shift their operations and 
     the economic benefits of intellectual property overseas.''
       Richard Phillips, senior policy analyst, Institute on 
     Taxation and Economic Policy:
       ``The most significant component of the Senate tax proposal 
     on international taxes is moving to a territorial tax system, 
     under which active income of U.S. companies earned offshore 
     will no longer be subject to U.S. taxes. By doing this, the 
     Senate tax plan moves in the opposite direction of real tax 
     reform by substantially contracting the base of the U.S. 
     corporate tax. According to the Joint Tax Committee, moving 
     to the territorial tax system would cost $215 billion over 
     the next decade. Exempting offshore income from U.S. taxation 
     would encourage further profit shifting and would also create 
     a tax incentive for corporations to move real operations and 
     jobs offshore to take advantage of lower tax rates.''
       Steven Rosenthal, senior fellow, Tax Policy Center; former 
     counsel to Joint Tax Committee:
       ``The Tax Cut and Jobs Act (TCJA) that the Senate is 
     debating this week would fundamentally change the way U.S.-
     based multinational corporations are taxed on their overseas 
     income. But contrary to the claims of President Trump and 
     congressional supporters, the new approach may still 
     encourage U.S. companies to shift production overseas.''
       Reuven Avi-Yonah, professor of law, University of Michigan:
       Certain ``multinational corporations (for example, GE or 
     Intel) will pay less because they have more tangible assets 
     offshore. This creates an obvious incentive to move jobs (not 
     just profits) offshore. Moreover, the proposal standing on 
     its own would induce profit shifting because of the 
     combination of the participation exemption and the lower rate 
     (12.5% is less than 20%).''
       Chuck Marr, director of Federal Tax Policy, Center on 
     Budget and Policy Priorities:
       ``Another, less-noticed provision would permanently set an 
     even lower tax rate for U.S.-based multinationals' foreign 
     profits by adopting a `territorial' tax system, which would 
     encourage firms to shift profits and investment offshore. As 
     Senate Republican Ron Johnson said recently, `With a 
     territorial system, there will be a real incentive to keep 
     manufacturing overseas.' ''


                           The FACT Coalition

       ``This bill would create significant new tax incentives to 
     move U.S. jobs, profits, and operations overseas, while 
     exploding the deficit. The bill's complicated structure also 
     creates multiple new loopholes to allow for expanded tax 
     avoidance by large multinational companies at the expense of 
     small businesses and wholly domestic companies.''
       Victor Fleischer, tax professor, University of San Diego:
       ``The international provisions of the Senate tax bill are 
     worse than I thought--a very nice gift to multinationals.''
  Mr. VAN HOLLEN. Now, to add insult to injury, this is not the only 
part of this bill that actually tips the playing field in favor of our 
economic competitors overseas and against the American worker and 
against the American taxpayer. If you look at the corporate tax cuts in 
this bill, they are permanent. They go on forever. Year after year, 
corporations will get that tax cut in the United States of America. 
Whereas, if you are an individual

[[Page S7504]]

household in America, millions of middle-class taxpayers will see an 
immediate increase in their taxes. Some will see a small cut in their 
taxes for a period of time, but in the long run, those individual tax 
cuts go away, and the corporate tax cuts go on forever.
  Of course, the theory behind this is trickle-down economics; right? 
You are going to give the very wealthy and big corporations the tax 
cut, and the benefits of that are going to trickle down and lift 
everybody up. I think we know that this theory has run aground and run 
into the wall of reality many times over.
  Most recently, in the early 2000s, we had the Bush tax cut. It was 
the same theory--to cut taxes for the superwealthy and somehow the 
benefits were going to trickle down and lift everybody up. I will tell 
you who it lifted up. The wealthy did even better. The other thing that 
went up is our deficit and debt, but everybody else was either running 
in place or falling behind. That was our most recent experiment in 
trickle down.
  We also have an immediate present example of why this theory of 
giving big tax cuts to corporations and the idea that it is going to 
raise wages is just dead wrong. As we sit here tonight, American 
corporations are making record profits. That is a great thing. But 
guess what. Wages are flat. So by increasing the after-tax profits of 
those corporations, they are not going to use that extra money to raise 
wages. They are not doing it today. They are not doing it today.
  The stock market will go up, and stockholders will definitely have 
greater value, because you are a corporation. The day after this tax 
bill gets passed, if it passes, your after-tax profits just went up. 
The stock market is doing great. The problem is, most Americans--the 
overwhelming amount of Americans--don't benefit from that rising stock 
market. We know the people who benefit most are the folks at the very 
top.
  Here is the thing that I think many people will be surprised by. A 
very large group of those stockholders are not even American citizens. 
They are foreign stockholders--stockholders who have these investments 
in American corporations.
  In fact, 35 percent of the stock in these corporations are foreign 
shares--35 percent of the value of that stock. So I can tell you that 
they are going to be clicking the champagne glasses in capitals around 
the world because those very wealthy foreigners are going to get a big 
tax cut. In fact, the Institute on Taxation and Economic Policy 
estimates that the value of the tax cut to foreign stockholders just in 
the year 2019 will be over $30 billion. That is in 1 year for foreign 
stockholders. In that same year, in 2019, taxes will go up by over $27 
billion on American citizens.
  There is great news for the American public. Some $27 billion are 
transferred from American households into the pockets of foreign 
stockholders--what a great deal for the American public. They are going 
to be thrilled to see that their hard-earned dollars are going to 
increase the bank accounts of foreign stockholders.
  This is the kind of information that is beginning to come out as 
people get a chance to look more at the consequences of this bill. This 
is the exact reason that Republicans are trying to rush this through 
the Senate. I can tell you, when the American public sees that their 
taxes are going up to pay for foreign stockholders, I think all of us 
agree that they aren't going to like it.
  The problem is this is also part of a pattern. The corporate tax cuts 
go on forever, and those foreign stockholders, every year--this is in 
2019--keep getting a big windfall, a big bonanza. But if you are an 
American taxpayer, you are on the short end of the stick because 
millions of American middle-class families will see their taxes go up 
right away. As I said, others may see a small tax cut originally, but 
it will fizzle out.
  So here is the overall impact. In 2019, you are going to see 13 
million American families who earn less than $200,000 a year pay higher 
taxes under this Republican bill--13 million families. It gets worse 
from there because the benefits that some people will get in the short 
term begin to fizzle out and then get snuffed out altogether at the end 
of 10 years.
  By the year 2025, it is going to go from 13 million middle-class 
American families to 19 million middle-class families who are going to 
be paying higher taxes. By the way, at the same time, the Republican 
bill will give a tax cut of an average of $40,000 a year to people who 
make more than $1 million a year.
  It gets even worse for families in and after the year 2025 because 
all of the individual tax cuts expire. Tax cuts for the foreign 
stockholders keep going on. They go on forever. By 2027, the Republican 
plan will raise taxes on 87 million American families.
  Now, we actually just had some information come out. It was just 
released to the public this evening. This is from the Joint Committee 
on Taxation. These are the folks who are the professionals who look at 
the impact of the tax bill. They analyze it, and they let people know 
the facts.
  Here is what they said. When this bill runs its course in the year 
2027--here is the bottom line--23 percent of American households are 
going to see their taxes go up, and 16 percent will see their taxes go 
down. So more American households will see their taxes go up than go 
down. Some 61 percent, they estimate, see virtually no change at all. 
Again, these are families, not corporations. The corporations, 
including those foreign stockholders, keep seeing the benefits.
  Here is the other thing the Joint Committee on Taxation is telling 
us. Of the people who get a cut, the largest share of any one group are 
people who make $1 million and up. In fact, it says of those in that 
category, that 57 percent of the households will get a tax cut. Those 
are the millionaires. If you look at middle-income folks, there are 
much smaller percentages in those categories.
  I just have to ask my colleagues how it is that you try to sell a 
plan as a middle-class tax cut when, at the end of the day, more 
Americans are going to see their taxes go up than go down. I think the 
American people are going to be more and more surprised if this bill 
passes as to what is in it.

  So we have a chance to actually step back right now. We have a chance 
to step back and actually take a good look at the bill, and we can 
figure out which of these consequences are intended and which of these 
consequences are unintended. There is time to fix some of these issues.
  The last point I wish to make is that in addition to middle-class 
families--millions of them who are going to have to pay more to pay for 
the big corporate tax cut--we are also going to see a number of other 
groups of Americans who are going to be hit hard. We know that millions 
of people who get their health insurance through the exchanges are 
going to see their premiums go up to pay for big tax cuts for 
corporations. We know that even after all of that--after those 
Americans have to pay more in premiums and after millions of middle-
class families are going to have to pay more--we still have a $1.5 
trillion debt.
  I am just going to ask my Republican colleagues, with whom I have 
worked for many years and with whom I have agreed that we need to find 
a bipartisan way to reduce our deficits and debt rather than increase 
our deficits and debt, what their plan is.
  Here is the secret--not really a secret, actually. I invite everybody 
to look at the budget that passed the Senate and the House of 
Representatives, because it tells us right there in the budget what the 
plan is to reduce some of that debt that will be increased because of 
tax cuts. The proposal is right there: A $1 trillion cut to Medicaid 
over 10 years, a $473 billion cut to Medicare over 10 years, and cuts 
to the whole category of our budget we use to invest in education.
  So the bottom line is that this bill is going to provide whopping tax 
cuts to corporations. It is going to have the effect of encouraging and 
incentivizing more of those corporations to move jobs, plants, and 
equipment overseas, and it is going to ask almost everybody else in the 
country to pick up the tab. That is not the kind of tax reform the 
American people bargained for.
  I urge my colleagues to take a step back, to work together on a 
bipartisan basis, and to come up with a plan that actually works for 
the country. I hope that can happen.
  I yield the floor.

[[Page S7505]]

  

                          ____________________