[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.