[Congressional Record Volume 164, Number 196 (Wednesday, December 12, 2018)]
[Senate]
[Pages S7474-S7475]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TAX LEGISLATION
Mr. GRASSLEY. Mr. President, as the 115th Congress winds down, I
would like to reflect on the enactment of the historic tax legislation,
which passed last year, and what is ahead for us in the new year.
In December of 2017, Congress passed, and the President signed into
law, the most comprehensive reforms to the Nation's tax laws in more
than three decades.
For years, both sides of the aisle have talked about the need for tax
reform that would provide tax simplification, tax fairness, and
increase America's economic competitiveness. With the enactment of the
law called the Tax Cuts and Jobs Act, we finally made all three of
those goals a reality.
Significant simplification was achieved for individuals by nearly
doubling the standard deduction. This means people will be able to pay
less and avoid the tedious task of itemizing their taxes. Overall,
roughly 90 percent of taxpayers will file their taxes by simply taking
the standard deduction.
Moreover, thanks to a significantly higher alternative minimum tax,
which we refer to as the AMT exemption, millions of middle-class
taxpayers will no longer be faced with figuring out their tax liability
two times: one time to calculate their regular tax liability and the
second time to calculate their tax liability under the alternative
minimum tax.
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It also provided tax fairness by reducing taxes across every income
group. In fact, middle-income families experienced the largest tax cut
by percentage.
Additionally, the reforms made the Tax Code more progressive, with
taxpayers earning more than $1 million shouldering a larger share of
the tax burden than they did under the previous law. In addition to
nearly doubling the standard deduction, tax relief was targeted at
middle-class families by doubling the child tax credit from $1,000 to
$2,000 per child.
It also reduced the previous 15 percent tax bracket to 12 percent and
the 25 percent tax bracket to 22 percent. As a result, a typical family
of four earning $59,000 a year will see a tax cut of more than $1,600
in the year 2018.
A key motivation for tax reform was to boost economic growth and
increase America's global competitiveness. America's Tax Code should
favor American jobs, American workers, and American businesses. That
means leveling the playing field so that we are not put at an economic
disadvantage with other countries competing with us, so the Tax Cuts
and Jobs Act brought the corporate and international tax systems into
the 21st century. You can tell it is already working because other
countries are looking at lowering their tax rates to compete with us.
Of course, what we did included lowering the corporate tax rate from
35 down to 21 percent. In one fell swoop, we went from a tax rate that
was the highest in the developed world to below the world's average of
23 percent. How can you be competitive if you are a country at 35
percent and the average is 23 percent? This means global corporations
will be more inclined to create jobs here, rather than in other
countries.
We also modernized America's international tax system. We were one of
the very last major countries to tax businesses on a worldwide basis.
By moving toward a more territorial system, we freed up more than $2
trillion for investment here at home that American companies were
holding offshore.
These changes to the international tax rules don't just help U.S.
companies that operate globally to compete in the worldwide
marketplace, but they also help those companies grow their businesses
here at home with more jobs, better wages, and increased investment.
Just as important, we worked to ensure that small businesses and
pass-through entities received more equitable treatment compared to
what a corporation gets. We have a new 20-percent qualified business
deduction benefiting pass-through businesses of all sizes, down to the
smallest family farmer or corner bakery. Enhanced expensing rules were
included to help all businesses, spurring investments in new equipment
and machinery.
Our efforts have contributed to a strong and growing economy. The
unemployment rate is at a half-century low; wages are rising at the
fastest rate in nearly a decade; and workers, employers, and small
business owners are all very optimistic about the future--more
optimistic than for a long, long time. America is working again.
As we look forward to a new year in 2019, with a new Congress and a
new majority in the House, it is my hope that we can work in a
bipartisan way to build upon this economic success I just described. I
will be doing my part as the incoming chairman of the Senate Finance
Committee, and I see plenty--plenty--of opportunity.
Unfortunately, I hear increasing calls from the incoming House
majority pledging to erase the progress made with the tax cuts and tax
reforms I have just outlined.
The proof of tax reform's success is in today's economy. It is
obvious to most people that it is in the best shape it has been in for
a long time. Why would we want to go backward--toward stagnation,
pessimism, and, obviously, joblessness?
Of course, no major piece of legislation is perfect. To the extent
that there are legitimate efforts to perfect the law, then I want
people to know that I am all ears. But to the extent that these efforts
would undermine the strength of the American economy for the sake of
ideology--and that ideology would be hiking taxes and undoing important
reforms to modernize the tax system and increase America's global
competitiveness--then they will be met with stiff opposition from this
Senator.
Instead of playing politics, we should be focused on examining how
the law is affecting individuals, families, and businesses in our
respective States and districts. Where necessary, we should work
together to take action and ensure the law is fulfilling its full
potential.
We should also work toward providing tax certainty for individuals
and small businesses. This would include making permanent marginal tax
rate cuts for individuals and families, making permanent the doubling
of the child tax credit from $1,000 to $2,000, also making permanent
the innovative 20 percent deduction for small businesses to provide the
certainty that is needed to make investment and to encourage that
investment and also to encourage hiring decisions and, lastly, the
ability of businesses to recover the cost of investment in property and
equipment faster.
I hope my colleagues in the House of Representatives join me in these
efforts. I have yet to hear a good reason why we shouldn't make these
and other tax relief measures permanent. It is the right thing to do
for the economy, the right thing to do for job creation, and the right
thing to do for wage growth.
I also wish to see us continue working on other important issues we
started in this Congress. This includes improving retirement savings,
bringing the IRS into the 21st century, protecting taxpayer rights,
enhancing the competitiveness of U.S. businesses, and encouraging
research, development, and innovation.
I also hope there will be plenty of opportunity to work on a
bipartisan basis on tax issues involving everything from education to
renewable and alternative energy, to consumer-directed healthcare
options. I have heard a lot about the desire of the new House majority
to engage in oversight of the current administration.
I will put my record of oversight up against anyone's record.
However, I want my colleagues to know I do not intend to engage in
political fishing expeditions. I think a person like me who has had an
equal opportunity approach to oversight--treating Republican
administrations the same as Democratic administrations--speaks for
itself.
I will not go along with efforts to weaponize the authority of tax-
writing committees to access tax returns for political purposes. Such
an action would be unprecedented, but if Democrats are interested in
doing nonpartisan, good government oversight, count me in.
I hope they will join me in my efforts to hold the IRS accountable to
the taxpayers; ensure the nonprofit sector is living up to the purposes
of its tax-exempt status; that they will also help me stand up for tax
whistleblowers who expose tax cheats; and track down, expose, and
address tax shelters.
My hope is, in the new Congress, we will be able to work to address
important tax matters in a bipartisan fashion. I am proud of my strong
record of bipartisanship on the Finance and Judiciary Committees. I
intend to continue my good working relationships with my colleagues
across the aisle and hope to forge a few new ones, not only in the
Senate but also with the new majority in the House of Representatives.
Senator Wyden, who will be the ranking Democrat on the Finance
Committee, and I have had a good working relationship on so many
different issues over a long period of time, and I think we will be
able to work together as well. We have already started communication
along that line.
I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. LEAHY. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
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