[Congressional Record Volume 163, Number 202 (Tuesday, December 12, 2017)]
[Senate]
[Pages S7951-S7954]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                            Tax Reform Bill

  Mr. President, it has been a good week in the U.S. Senate. We are 
getting closer and closer to the finish line

[[Page S7952]]

on tax reform. That means we are getting closer and closer to real 
relief for the American people. Our legislation is going to cut tax 
bills for American families, it is going to increase their wages, and 
it is going to give them access to new jobs and opportunities.
  The tax bill the Senate passed on December 2 would cut income tax 
rates for American families starting next month. It would double the 
standard deduction. It would double the child tax credit. That would 
mean a substantially lower tax bill for American families next year. 
Under our bill, a family of four making $73,000 a year would see a 
$2,200 tax cut.
  But our bill doesn't just provide immediate relief for families. Our 
bill also sets families up for economic health for the long-term by 
giving them access to higher wages, new jobs, and better opportunities.
  How does it do this? By improving the playing field for American 
businesses. In order for individual Americans to thrive economically, 
we need American businesses to thrive.
  Thriving businesses create jobs and provide opportunities; they 
increase wages and invest in their workers. But our current Tax Code 
has not been helping businesses thrive. For years now, our tax laws 
have left businesses of all sizes struggling under the burden of high 
tax rates and an outdated tax system that has left American businesses 
at a disadvantage in the global economy. Small businesses employ nearly 
half of American workers and create a majority of new jobs in this 
country, but right now small businesses face high tax rates that can 
make it difficult for these businesses to even survive, much less 
thrive and expand their operations.
  Our bill fixes this. To start with, our bill implements a new 
deduction for passthrough businesses, such as partnerships, LLCs, and S 
corporations. This deduction would allow them to keep more of their 
money, which would allow them to reinvest in their operations to 
increase wages and to hire new workers.
  Our bill also reforms current provisions in the Tax Code that 
frequently leave small businesses with little cash on hand. Under our 
legislation, small businesses would be able to recover the capital they 
have invested in inventory and machinery much more quickly and, in 
certain cases, immediately. This, in turn, would free up capital small 
businesses could use to expand and create jobs.
  Our legislation also includes provisions that I helped develop that 
would simplify accounting rules for small businesses, which would also 
help reduce their tax burden, leaving more of their earnings to 
reinvest in their businesses and in their workers.
  In addition to providing relief to small businesses, our bill will 
boost American wages by lowering our massive corporate tax rate. Our 
Nation's corporate tax rate is currently the highest in the 
industrialized world, which puts U.S. businesses at a major 
disadvantage next to their international competitors. Reducing the 
corporate tax rate will enable U.S. businesses to compete on a more 
level playing field, freeing up money that U.S. businesses can use to 
create jobs and to increase wages.
  The White House Council of Economic Advisers estimates that reducing 
the corporate tax rate to 20 percent would increase wages for U.S. 
households by $4,000. That is money that families could use to save for 
retirement, help pay for a child's education, replace an aging vehicle, 
or invest in their home.
  Our bill would also boost wages and increase opportunities for 
Americans by ending the outdated tax framework that is driving American 
companies to keep jobs and profits overseas. Our Nation currently 
operates under a so-called worldwide tax system. That means that 
American companies pay U.S. taxes on the profit they make here at home 
as well as on part of the profits they make abroad, once they bring 
that money back to the United States. The problem with this is that 
American companies are already paying taxes to foreign governments on 
the money they make abroad. When they bring that money home, they can 
end up having to pay taxes again on part of those profits at the 
highest tax rate in the industrialized world. It is no surprise that 
this discourages businesses from bringing their profits back to the 
United States to invest in their domestic operations, new jobs, and 
increased wages.
  Our bill replaces our outdated worldwide tax system with a 
territorial tax system. Under our legislation, American companies would 
no longer face the double taxation that has encouraged them to send 
their investments and their operations overseas. Instead, U.S. 
companies would have a strong incentive to invest their profits at home 
in American jobs and American workers.

  All in all, the Tax Foundation estimates that in addition to 
increasing wages, our bill would create nearly 1 million new jobs for 
American workers and boost the size of the economy by 3.7 percent.
  This week, Members of the House and the Senate--myself included--are 
working on the final draft of comprehensive tax reform legislation. We 
hope to send a final bill to the President next week. I am thankful to 
have been able to be part of this tax-writing effort.
  The bill we are finalizing, which is the product of years of work by 
Members of both parties, represents a once-in-a-generation opportunity 
to profoundly change the American people's lives for the better. Our 
tax bill will provide real, immediate, direct relief to Americans and 
do it now, and it will give Americans access to the kinds of jobs, 
wages, and opportunities they need for a secure and prosperous future. 
After years of economic stagnation, the bill we are drafting will usher 
in a new era of economic dynamism in this country, and it will send a 
message to the world that America is serious about competing and 
winning in the 21st century.
  I am grateful to my colleagues on the House and Senate tax-writing 
committees for all the work they have done to put together this 
legislation, and I look forward to working with my colleagues on the 
conference committee to finish our final draft and to get this bill 
across the finish line for the American people.
  Mr. President, I yield the floor, and I suggest the absence of a 
quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The bill 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. Strange). Without objection, it is so 
ordered.
  Mr. CORNYN. Mr. President, I approach this topic with a little bit of 
trepidation. Ordinarily when people make outrageous, outlandish, and 
unbelievable statements, I usually think it is best just to let them go 
because when people make these kinds of statements, I think they lose 
their own credibility, and maybe it doesn't bear any particular comment 
by anybody else or a desire or an attempt to refute it. But on the 
subject of tax reform, there have been some incredible statements that 
have been made, and I am going to mention a few of those because I 
think they really paint an ugly picture of what is supposed to be a 
debate on tax reform policy, but I think probably they relate more to 
sort of the nature of what passes for debate here in Washington, DC--
and particularly the Congress--on matters of important public policy. 
In other words, there isn't a lot of debate. There is accusation after 
accusation. It gets repeated on social media, then the press picks it 
up, and then people just assume, well, it must be true since nobody has 
ever denied it or offered any contrary narrative.
  For example, the House minority leader apparently had the time to 
read every bill that has ever been written since the year 1789 because 
she felt comfortable calling this tax bill, which is still in the 
process of being written--reconciling the House and Senate versions--
she called it the ``worst bill in the history of the United States 
Congress.'' She has been busy if she has read every bill since 1789. 
Then she went further because that apparently wasn't enough for her. 
She said that our tax bill isn't just poor legislation; she said that 
it is an existential threat to the Nation and possibly the entire 
planet. Can you believe that? An existential threat to the Nation and 
possibly the entire planet.

[[Page S7953]]

  Well, you can see why perhaps I was reluctant to come address these 
accusations, because I think anybody who would make those kinds of 
accusations has lost all credibility. But acting either as a prophet or 
an amateur astrologist--we are not quite sure--she called the prospect 
of passing tax reform ``Armageddon.''
  Well, it is hard to know what to say or do in the face of that sort 
of rhetoric because, frankly, this tax reform bill is a good thing. I 
wish our friends across the aisle, the Democrats, would join us in 
trying to make it better. That is what happened the last time we tried 
to do this or this Congress tried to do it.
  In 1986, a Republican President; a Democratic Senator from New 
Jersey, Senator Bill Bradley; Dan Rostenkowski from Chicago, chairman 
of the House Ways and Means Committee, a Democrat; and other Members of 
Congress came together to try to reform our Tax Code, and they were 
successful in doing it against all odds.

  But today, we have an entirely different scenario. We have 
Republicans seeing that the economy is growing at a very slow rate and 
that wages for most workers have been flat for the last 10 years and 
realizing that our current Tax Code is counterproductive when it comes 
to encouraging investment, job creation, and wage growth in our country 
because we have the highest tax rate in the world for businesses that 
do business internationally. We thought, we need to do something about 
it, and so we set about reforming our Tax Code with three goals in 
mind.
  One is to simplify the Tax Code. Everybody knows how complex it is 
and how much money people spend hiring an accountant or H&R Block or 
somebody to help them figure it out. Secondly, we figured that it would 
be important to give hard-working families a tax cut. So we have 
succeeded in reducing the tax break for every tax bracket in the Tax 
Code for working families. For example, for low-income families, we 
have a zero tax bracket now. For a joint-filing husband and wife, on 
the first $24,000 they earn, there is no tax at all. And thanks to some 
great work by Senator Rubio and Senator Lee, we have doubled the child 
tax credit. Those are good things. We have doubled the standard 
deduction--so fewer people have to itemize deductions to get the full 
benefit of the code--while maintaining the charitable deduction and the 
mortgage interest deduction and popular items like that. We have also 
said, for example, that a family earning roughly $70,000 a year--the 
median income in America for a family of four--would see a benefit of 
roughly $2,200 less tax liability.
  I would think those would be good things that our friends across the 
aisle would want to work with us on. How do we simplify the code? How 
do we let people keep more of what they earn, more take-home pay, a 
better standard of living? How do we make America's economy more 
competitive since we have the highest tax rate in the world and we are 
seeing investment in businesses flee to other lower tax jurisdictions? 
You would think those would be the sorts of things on which our friends 
across the aisle would want to work with us but apparently not. 
Instead, what we get are these sort of reckless and really buffoonish 
allegations that cause the speaker to lose all credibility in any sort 
of debate we might be having.
  Unfortunately, the media tends to pick up on some of this rhetoric 
and jump on the bandwagon, but the media's worst claims are at least a 
little closer to Earth than what I recounted earlier. For example, the 
Washington Post said the tax reform ``took place behind closed doors.'' 
Well, that is a tired old rhetoric and talking point. You would think 
the Washington Post could come up with something a little better than 
that and actually something that is a little more accurate than that. 
One columnist at the New York Times sighs that the package benefits 
donors at the expense of voters--what does that mean?--and that it 
``only modestly addresses the central socioeconomic challenge of our 
time.'' Well, I wonder what this reporter or columnist for the New York 
Times thinks is the central socioeconomic challenge of our time. I 
think one of those is for people to be able to pursue the American 
dream, to be able to find work, to be paid a decent wage, and to be 
able to keep more of what they earn, but that apparently isn't good 
enough for this columnist at the New York Times.
  Certainly, these charges deserve a little more attention than the 
minority leader's asteroid attack, but they, too, are misguided.
  When it comes to tax reform, the drafting process did not take place 
behind closed doors. I wonder why the Washington Post was so ill-
informed and ignorant of the legislative process that they didn't see 
the 70 Senate hearings we have had on tax reform since 2011. They 
apparently didn't bother to turn on C-SPAN to see the debate and the 
amendment process in the Senate Finance Committee that produced the 
Senate bill, and they apparently are not paying much attention to what 
we are talking about here on the Senate floor as we are trying to 
reconcile the differences between the House bill and the Senate bill. 
So I guess they are just not paying much attention, which I thought 
newspapers and reporters were supposed to do.
  The second major allegation--that we are ignoring working Americans 
and the middle class--is demonstrably false.
  Many are wondering why tax cuts for families are temporary and the 
ones for corporations are permanent. Well, we know that businesses need 
long-term assurances about the tax environment so that they will invest 
and make plans. We wanted to make tax cuts for individuals permanent, 
too, but that requires 60 votes in the Senate, and every single one of 
our Democratic colleagues voted against the bill and they refused to 
participate in the process. So with only 52 votes to work with, we were 
unable to meet that 60-vote threshold. So on the one hand, they 
criticize us for not making those tax cuts for individuals permanent, 
but then they deny us the votes we need in order to make that happen. 
It is not that we don't want to make these tax cuts permanent for the 
middle class; it is that the Democrats are preventing us from doing so.
  I agree with my friend and colleague, the junior Senator from 
Florida, Mr. Rubio, who has said that when it comes to debating tax 
reform, Republicans can't be the country club party. I certainly agree 
that is not who we are, but that is also not who we should be helping 
in this bill. We ought to be addressing low-income and middle-class 
Americans first.
  Yes, we do lower the corporate rate, but historically that has been 
something Democrats have called for. I remember that in 2011, President 
Obama, in a joint session of Congress, called for reducing the highest 
corporate tax rate in the world, and he called upon Republicans and 
Democrats to work together to make that happen. And we have had others, 
like the ranking member on the Senate Finance Committee, the Senator 
from Oregon, Mr. Wyden, who cosponsored a bill that would have reduced 
the corporate tax rate from 35 percent to 24 percent. We do a little 
better than that in this bill. We take it down to 20 percent, which is 
close to the industrialized world average on tax rates, but the Senator 
from New York, the Democratic leader, has also called for lowering the 
corporate tax rate and making us more competitive in the global 
economy. Do you know what will happen when we do that? We will see 
investment come back to the United States, along with the jobs that go 
along with it. Who will benefit from that? Will the businesses that 
create those jobs benefit? I suppose they will, but the people who will 
really benefit will be the people who perform those jobs and who earn 
those wages: hard-working American families.

  A group of nearly 140 economists say that, on balance, they believe 
the bill will enhance economic efficiency and result in most households 
enjoying lower marginal rates. That is economics talk for tax cuts. But 
what about fairness and simplification? Don't we all want a fairer tax 
code and one that is easier to navigate? I believe, once again, our 
bill delivers.
  Those economists I mentioned say fairness would be served by 
reduction differences, and the tax treatment of individuals with 
similar incomes and simplification would be served by reducing the 
number of individuals who itemize for Federal tax purposes. That is 
exactly what we do by doubling the standard deduction.

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  Right now, about 3 out of 10 individual taxpayers itemize. Under our 
doubling the standard deduction, only 1 out of 10 will find it 
necessary to itemize.
  The simple truth is, the Senate bill will lower tax bills on millions 
of working-class Americans. It will lower taxes, not raise them, on the 
working class. Again, by nearly doubling the standard deduction and 
lowering rates across the board and doubling the child tax credit, the 
Senate tax reform plan will lower taxes for every income group. The 
Senate tax plan was written with working families in mind, and the 
legislation reflects that goal.
  As I said earlier, and I will say it again, a family of four earning 
a median income of about $70,000 will see a $2,200 savings in their tax 
bill each year. It may be easy for folks living in the rarified air in 
Washington, DC, to shrug that off and say $2,200 is no big deal to me, 
but to the people I represent, $2,200 in tax savings a year is a big 
deal. It can mean the difference between being able to save for 
retirement, help pay for a college education, or maybe take a vacation 
for the first time in a long time. That is the money they have earned, 
and we are simply saying you can keep more of it under this bill.
  Finally, I want to mention the Federal deficit. Will the tax bill 
increase it? Well, yesterday the Office of Tax Policy at the Treasury 
Department released an analysis of expected tax revenue associated with 
the administration's economic growth initiatives. Among the key 
findings is, $1.8 trillion of additional revenue would be generated 
over 10 years based on expected economic growth. The Congressional 
Budget Office uses the baseline of 1.9-percent economic growth. That is 
because, during the entire Obama Presidency, the U.S. Government and 
economy experienced an unprecedented low rate of economic growth since 
the Great Recession of 2008, but, historically, dating back to World 
War II, we have seen the economy grow at 3.2 percent. So why should we 
settle for 1.9 percent or 2 percent? We shouldn't.
  Our friends on the other side have suddenly become deficit hawks 
after seeing the national debt double during the Obama administration. 
Let's not forget, they supported lowering these same corporate tax 
rates year after year and embraced other parts of our plan which we 
have incorporated. That is why their attacks, their histrionics, their 
screams of Armageddon are laughable, and, frankly, they insult the 
intelligence of Americans who are trying to figure this out. It is hard 
to figure out what is actually happening when you have somebody crying 
like Chicken Little that the sky is falling. It is hard for people to 
sort all of this out.
  Well, as we continue to work on a conference committee report to 
reconcile the differences between the House and the Senate versions of 
the bill, our focus will be on those hard-working American families I 
mentioned earlier--people of modest income, people of average income.
  Yes, we are going to make our businesses more competitive globally 
because that will benefit the same families we are trying to benefit by 
the individual tax cuts.
  You can see why I perhaps was a little reluctant to come address some 
of these histrionics and outlandish and unbelievable claims, but I have 
also learned that if you don't respond--if you don't counter falsehood 
with truth--some people are simply going to believe the falsehood, so I 
thought it was important to do so. Let's remain clear-eyed, and let's 
get this work done.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Michigan.
  Ms. STABENOW. Mr. President, I come to the floor to talk about the 
Children's Health Insurance Program and Community Health Centers, but I 
do want to take a moment to respond to my friend and colleague, the 
distinguished Senator on the Republican side.
  I can speak for myself and others, I know, on this side who very much 
want to see tax reform, very much want to close loopholes that take 
jobs overseas and support small businesses, but what is in front of us 
and what was voted on was a bill that, when fully implemented, would 
raise taxes on something like 87 million middle-class Americans. That 
doesn't make any sense at all.
  All of the rosy estimates on economic growth were not backed up in 
legislative language. As to the $4,000 wage increase that had been 
talked about as a minimum for people across the country to receive 
based on economic growth, I suggested we write that into law; that if, 
in fact, folks don't get their $4,000, the tax breaks would stop--and 
folks aren't willing to do that.
  I want to make sure folks in Michigan get their $4,000 wage increase, 
and we don't get another bunch of promises with trickle-down economics, 
where everything goes to the top 1 percent, and folks in Michigan are 
still waiting for it to trickle down.