[Congressional Record Volume 165, Number 71 (Wednesday, May 1, 2019)]
[Senate]
[Pages S2544-S2546]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
Tax Reform
Mr. President, a few weeks ago, our tax filing season came to an end.
This filing season was a very important milestone as it was the first
tax filing season under the Tax Cuts and Jobs Act signed by the
President before Christmas 2017.
Congressional Democrats sought to turn the filing season into an
indictment of the tax reform through a campaign of misinformation and a
campaign of half-truths. They were obsessed with finding anything--just
anything--they could hang their hat on to declare that the tax filing
system was a failure.
I will give you a case in point--maybe, several cases.
They attempted to use early and incomplete tax reform data to mislead
taxpayers into believing that since the average tax refunds went down,
taxpayers' taxes actually went up. Of course, such a claim is just
simple hogwash. The size of the tax refund tells you absolutely nothing
about a taxpayer's overall tax liability. The tax refund, as most
people ought to know, tells you how much a taxpayer overpaid the
Federal Government throughout the year.
None other than the Washington Post Fact Checker called out Democrat
tax refund falsehoods as, in their words, ``nonsensical and
misleading.'' The Democrat talking points earned the Democrats a
whopping four Pinocchios from that Fact Checker. Yet the Democrats
wouldn't let facts or reason get in their way, because if it did, it
wouldn't be a political win for them. The Democrats continued to
mislead and scare the public for several more weeks. And why not? The
truth might hurt.
Then, more complete tax refund data came in showing that the average
tax refunds were actually in line with the previous years. Much to the
Democrats' chagrin, their favorite talking point was, once and for all,
exposed for the nonsense that it is.
The fact is that this filing season was a resounding success for the
Tax Cuts and Jobs Act, signed before Christmas 2017. The filing season
happened to run remarkably smoothly. This became even clearer the
further into the filing season we went and a more complete picture
emerged. On four points, all the IRS computer systems functioned as
planned, refunds were processed in a timely manner, the total number of
refunds sent to taxpayers are up--and the average refund amount
differed by only $55 compared to the previous tax year--and, lastly and
most importantly, millions of middle-income taxpayers saw less of their
hard-earned money go to Washington. And, of course, that was the
purpose of the tax bill in the first place.
Now, unfortunately, the Democrats remain yet today as determined as
ever
[[Page S2545]]
to take down tax reform through a campaign of misinformation. For
years, they misled the American people and promoted a narrative full of
distortions and misrepresentations about what the law does and doesn't
do. Even when the bill was a little more than a 1-page outline,
Democrats began their campaign depicting tax reform as a giveaway to
the wealthy and a tax hike for the middle class. As the committee
discussed new ideas and as the committee drafted a final bill, it
actually evolved. It was never like somebody 6 months before said: This
is what we are going to pass, and we are going to pass it just this
way.
No, it evolved considerably from the initial framework.
Yet the Democrat talking points that began when we first started
talking about the bill never changed and, still today, haven't changed.
Analysis after analysis, ranging from the nonpartisan Joint Committee
on Taxation to even the very liberal Tax Policy Center, showed that tax
reform would cut taxes on average for every income group. These
analyses showed that to the extent there were tax increases, they were
largely concentrated on the wealthy--in other words, a more aggressive
tax law.
That is right. The taxpayers Democrats claimed were the big winners
in the tax reform are actually the ones most likely to see a tax hike.
Moreover, according to the Joint Committee on Taxation analysis, the
largest percentage of tax cuts are concentrated among low- and middle-
income groups. For emphasis, the Joint Committee on Taxation analysis
also shows that tax reform made the Tax Code more progressive. I have
said it twice now. I say it a lot of times. I am trying to get somebody
to understand that this is what experts say, not what this Senator
says.
Millionaires now shoulder an even larger share of the total tax
burden than under prior law. As you can expect, Democrats are
determined not to let these facts get in their political way. Since the
beginning, they have argued that up was down and that tax cuts were tax
increases, and have even suggested the bill's passage was a sign of
``Armageddon.''
Unfortunately, their constant drum beat, coupled with little pushback
from the mainstream media, has worked to mislead too many taxpayers.
However, there are signs that some in the media are starting to see
that the Democrats' talking points are the nonsense that those talking
points really are. You might not believe this, but a few weeks ago the
New York Times, of all papers, published an article highlighting how
Democratic talking points and far too many Americans' perceptions of
the law don't match reality.
I would like to ask you to study this chart. It compares the liberal
Tax Policy Center's analysis of taxpayers receiving tax cuts under the
individual income provisions of the law with a recent survey of
taxpayers who think they received a tax cut.
Follow me on this chart. As you can see, there is a large gap between
how many taxpayers actually received a tax cut and those who think they
did.
Based on the Tax Policy Center analysis, nearly 70 percent of
Americans earning between $30,000 and $50,000 saw a tax cut, but only
about 36 percent think they got the tax cut. Similarly, more than 80
percent of Americans earning $50,000 and $70,000 received a tax cut,
but only half that amount, 40 percent, think they got a tax cut. The
gap between perception and reality continues as you go up the income
scale. Only about half as many people who did actually get a tax cut
think they did. As noted in the New York Times:
To a large degree, the gap between perception and reality
on the tax cuts appears to flow from a sustained--and
misleading--effort by liberal opponents of the law to brand
it as a broad middle-class tax increase.
Now, read ``liberal opponents'' as people in the leadership of the
Democratic Party, both in Congress and outside of Congress, misleading
the people. You can see from these statistics on the chart that they
were enormously successful and they probably knew what the information
was, but for some people, when it comes to politics, the truth doesn't
matter.
Something I don't get a chance to do very often is to applaud the New
York Times for finally calling Democrats out for their efforts to
mislead the American public, but even in this New York Times article,
the paper was selective in its reporting. The paper chose to highlight
only the Tax Policy Center's analysis of the individual income tax
provisions rather than its analysis of all major tax provisions enacted
in the Tax Cuts and Jobs Act. Even the liberal Tax Policy Center
recognizes the person who has the legal burden of paying a tax isn't
necessarily the one who bears the economic incidence of that tax. For
instance, it is widely recognized that a portion of the corporate tax
ultimately falls on individuals in the form of reduced wages, so we cut
the corporate tax rate. There ought to be a positive benefit from that
for the workers.
Thus, when all major provisions of tax reform are considered, the
percentage of taxpayers receiving a tax cut is not 70 percent, as
reported, but 80 percent. Moreover, when you look at taxpayers with
incomes between $50,000 and $70,000, the percentage receiving a tax cut
climbs to 90 percent.
Mr. President, I ask unanimous consent to have printed in the Record
the complete Tax Policy Center analysis of Americans who receive tax
cuts under tax reform.
There being no objection, the material was ordered to be printed in
the Record, as follows:
TABLE T18-0026--THE TAX CUTS AND JOBS ACT (TCJA). ALL PROVISIONS AND INDIVIDUAL INCOME TAX PROVISIONS TAX UNITS WITH A TAX INCREASE OR TAX CUT, BY
EXPANDED CASH INCOME LEVEL, 2018
[All provisions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tax Units Tax Units with Tax Increase or Cut Average Tax Change
------------------------------------------------------------------------------ (Dollars) for all Tax
With Tax Cut With Tax Increase Units
Expanded Cash Income Level (thousands of 2017 -----------------------------------------------------------------------------
dollars) Number Percent of Major
(thousands) Total Pct of Tax Avg Tax Pct of Tax Avg Tax All Provisions
Units Change ($) Units Change ($) Provisions Included
Here
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than 10.................................... 13,260 7.5 19.3 -40 0.3 430 -10 -10
10-20........................................... 23,850 13.5 62.0 -100 1.1 850 -50 -50
20-30........................................... 22,240 12.6 79.1 -250 2.6 780 -180 -180
30-40........................................... 16,640 9.5 87.3 -460 4.5 750 -360 -360
40-50........................................... 13,220 7.5 90.4 -670 6.2 710 -570 -570
50-75........................................... 24,450 13.9 91.6 -1,010 7.0 810 -870 -870
75-100.......................................... 16,650 95 91.5 -1,540 8.1 1,200 -1,310 -1,310
100-200......................................... 30,860 17.5 92.5 -2,560 7.4 1,510 -2,260 -2,260
200-500......................................... 11,640 6.6 95.1 -7,000 4.8 2,820 -6,560 -6,520
500-1,000....................................... 1,530 0.9 95.0 -22,170 5.0 9,970 -21,240 -20,570
More than 1,000................................. 670 0.4 88.3 -88,940 11.7 121,920 -69,660 -64,300
All............................................. 176,100 100.0 80.4 -2,140 4.8 2,770 -1,610 -1,590
--------------------------------------------------------------------------------------------------------------------------------------------------------
[Individual income tax provisions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than 10.................................... 13,260 7.5 4.4 -80 0.3 440 * *
10-20........................................... 23,850 13.5 29.8 -150 1.3 790 -30 -40
20-30........................................... 22,240 12.6 51.0 -320 3.1 700 -140 -140
30-40........................................... 16,640 9.5 65.2 -520 5.5 660 -300 -310
40-50........................................... 13,220 7.5 73.9 -720 7.6 660 -480 -480
50-75........................................... 24,450 13.9 81.7 -990 8.7 750 -740 -740
75-100.......................................... 16,650 9.5 86.6 -1,380 10.1 1,140 -1,080 -1,080
100-200......................................... 30,860 17.5 89.1 -2,250 10.1 1,450 -1,850 -1,860
200-500......................................... 11,640 6.6 90.9 -6,020 8.5 2,450 -5,280 -5,270
500-1,000....................................... 1,530 0.9 92.1 -19,050 7.3 8,930 -17,340 -16,900
[[Page S2546]]
More than 1,000................................. 670 0.4 78.2 -75,110 20.8 98,200 -41,910 -38,290
All............................................. 176,100 100.0 64.8 -2,180 6.3 2,760 -1,260 -1,240
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0217-1).
* Non-zero value rounded to zero.
Mr. GRASSLEY. Mr. President, I hope that the New York Times article
will be a wake-up call to congressional Democrats and people outside of
Congress to abandon this misleading rhetoric. Unfortunately, it is more
likely they will continue their campaign of misinformation. Yet, as
more and more hard data come in on the benefits of tax reform, it will
become harder and harder for the American public to take the Democrats
seriously with their rhetoric.
With the tax filing season now behind us, we are finally starting to
get some of this hard data. H&R Block has released data for this filing
season based upon its experience in helping taxpayers during this
filing season, which demonstrate how taxpayers fared in each State.
Again, as you can see from this chart, taxpayers who are in red and
blue States alike have all benefited from tax reform.
One knows what the rhetoric was around here even before we voted on
this bill: It is an attack on the blue States. Well, it didn't turn out
that way. On average for all States, taxpayers saw a 24-percent
reduction in their tax bills.
This data directly contradict misleading arguments by these
Washington Democrats, as I stated, that tax reform was an attack on
high-tax blue States due to the cap on the State and local tax
deductions, and we set that cap at $10,000.
According to H&R Block, not according to this Senator, some of the
largest tax reductions are actually found in the high-tax blue States.
On average, taxpayers in New Jersey saw the largest reduction in their
tax bills at 29 percent. New Jersey, based on the last several
elections, is a blue State. Massachusetts had the second largest
reduction of 27.6 percent, and California had the third largest with
27.1 percent. They are blue States.
The fact is, on average, taxpayers in every State have benefited from
tax reform, and in some cases, high-tax blue States have fared even
better than red States.
I am proud of the work we did on tax reform. No bill is perfect, and
we still have work to do in addressing a number of technical correction
issues, but we have kept our promise to enact meaningful reform that
has cut taxes for the middle class.
Even more important is what tax reform means for long-term economic
growth. It doesn't take a tax expert to see that income, wages, jobs,
and unemployment numbers have all very much improved since the
enactment of this tax bill. That then reflects in significant benefits
obtained by American workers. Of course, that is on top of the direct
tax relief that hard-working individuals and families are already
receiving, which I described at the beginning of my remarks.
Annualized growth in real after-tax personal income averaged 2\1/2\
percent during the Obama administration; it has averaged 3.3 percent
since tax reform.
Annualized growth in real average hourly earnings averaged a mere 0.6
percent under Obama compared to 1.7 percent following the enactment of
the tax bill. So it is about three times as much.
Monthly job gains averaged 110,000 under President Obama; they
averaged 215,000 after this tax bill passed.
There have been nearly 5.4 million jobs created since January of
2017, with more than half of that job creation having occurred since
the enactment of tax reform.
Under President Obama, the unemployment rate averaged a whopping 7.4
percent. Today, it averages 3.9 percent.
Following tax reform and for the first time since 2001, the number of
job openings in the national economy has exceeded the number of
unemployed Americans--a phenomenon that has continued for the past
year. That means an American who wants a job can get a job.
To say it simply, tax reform is working for America. For the
Democrats to suggest otherwise is nothing more than their continued
effort to mislead the American public. I invite the Democrats to take a
page from the New York Times article, acknowledge the facts, and work
with us to continue to improve the economic environment for hard-
working individuals and families all across this great country.
I yield the floor.
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. BRAUN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.