[Congressional Record Volume 165, Number 198 (Wednesday, December 11, 2019)]
[Senate]
[Pages S6961-S6966]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
Tax Reform
Mr. WYDEN. Mr. President, over the next 45 minutes or so, finance
Democrats will come to the floor, and we will be discussing the second
anniversary of the Trump tax bill. As the ranking Democrat, I am going
to begin it. I know my colleagues will be joining me.
The Trump tax law is now 2 years old, and for millions of middle-
class Americans, it is not a very happy anniversary. My own view is
that the economic legacy of the Trump administration will be that they
spent $1.5 trillion to widen the economic gap in America. If I were to
sum up what the law--the Trump tax law--was all about, it was about
making wealthy people wealthier and the middle class being an
afterthought. I am going to walk through some of the reasons I reached
that judgment, and then my colleagues will be getting into some of
these issues as well.
Donald Trump and Republicans in the Congress promised--promised--they
would write a bill that was focused on helping workers and the middle
class. The President told me personally that he thought he and people
like him should not get a tax break. He said that to me personally, but
that simply wasn't the case.
We were told that the Trump tax legislation would pay for itself.
That was wrong by a couple of trillion dollars. We were told that it
would kick off a towering wave of job-creating investments in so many
hard-hit American communities. That has not been the case. We were told
that workers would get, on average, a $4,000 raise. That was wrong once
more. It was wrong on all counts with respect to the promises made to
the American people.
What, in fact, did happen is rates were slashed for folks at the top
and multinational corporations. The corporations then turned around and
shoveled that money back to the shareholders who, by and large, are
wealthy themselves, and you saw a historic boom in stock buybacks.
Now the sugar high has worn off, and I have been going home for town
meetings open to all. I am going to be in a county this weekend that
President Trump won. I will be listening to people. I won't give any
speeches. I will be just listening to people. What I hear at these
meetings in counties in Oregon that Donald Trump won is that folks see
very little evidence that their lives have changed or that somehow this
tax bill ended up trickling down to them. My sense is, it is amazing
that a bill can cost so much and can borrow so much and fail the middle
class so thoroughly.
There are two issues that are important to focus on going forward,
and we are going to talk about those. There is a lot of talk about how
congressional Republicans and the Trump administration are talking
about another--another--scam tax proposal, basically going to the same
playbook that made the middle class an afterthought 2 years ago. I
think it is important that people understand that all the evidence
indicates this second bill isn't going to focus on the middle class
either.
According to the reports in the press that have been discussing this
new Republican proposal--which is, in effect, an admission that the
first proposal failed the middle class while helping the most
fortunate--what we hear about this new proposal is that Republicans are
considering what would amount to yet another massive handout for folks
at the top of the economic pyramid.
One Trump adviser is reportedly discussing a proposal that would
effectively wipe out the taxation of capital gains, and we all know
that a fraction--a tiny fraction--of the American people get most of
those capital gains, and they happen to be the most fortunate.
The U.S. Tax Code is already a tale of two systems. We have one for
cops and teachers. Their taxes are taken out of every single paycheck.
We have another one for high flyers who can make most of their money,
for example, off investments. To a great extent, because of the laws
that allow them to defer paying their taxes, those high flyers can pay
what they want when they want to. I don't know of any cops or teachers
in North Dakota or Oregon who have that. Their taxes are taken out of
every paycheck once or twice a month. Their system is mandatory.
If you are a high flyer and you make most of your money off
investments, your taxes aren't mandatory, and if you use the doctrine
of tax deferral, you can just defer and defer and defer. And after you
pass, you can hand everything off to your kids, Johnny and Mary, and
they get the stepped-up basis, and then they get to do the same thing.
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You have to have one set of rules that applies to everybody. That is
what we, on our side of the aisle, have been working for. We think you
ought to have one set of tax rules that applies to everybody. That, by
the way, gives everybody in America the chance to be successful. That
is what Bill Bradley--somebody I look to for advice, a member of the
Finance Committee, and another tall Democrat with a lot better jump
shot than mine--but he and Ronald Reagan got together, and they
produced a proposal that gave everybody in America a chance to get
ahead.
That is not what this new Trump tax discussion is all about, this new
proposal. I am not talking about the top paying a fair share. I will
just mention what it could mean for folks at the very top. Wealthy
people whose income is based on capital gains could be off the hook
completely--completely.
The first Trump tax law took what is already broken about our tax
system, and they embedded unfairness to the middle class and made the
problem even worse. They are not going to fix it by doubling down on
the same failed policies.
The second issue that the Trump folks are apparently going to be
focusing on, going forward, is handouts to billionaires and
corporations. That is the big accomplishment to date. It is inseparable
from the Trump agenda, which is all about helping those at the top at
the expense of everyone else.
Donald Trump has sought to kick more than 20 million Americans off
their healthcare since day one. He has tried to gut Medicaid, which is
a lifeline for so many seniors who depend on long-term care and nursing
homes, and it is a centerpiece of our fight against opioid addiction.
The President proposed slashing education funding for students and
teachers and slashing housing funds at a time when millions of
Americans are struggling to afford rent or to cover the mortgage. I can
go on--home heating assistance, Meals on Wheels, same pattern again and
again.
Tax handouts for the most fortunate multinational corporations and
billionaires--the ones we were told would pay for themselves--sent the
deficit into the stratosphere, and then working people and the middle
class, in addition to being an afterthought in terms of benefits, are
expected to endure the pain of the Trump budget cuts.
Middle-class folks know they got a raw deal in the Trump tax law in
2017. That is why it has been so unpopular. I was struck in the
campaign of 2018 by Republicans who thought they had done something
that would be so valuable to the American people. They couldn't even go
out and talk about it with middle-class folks because middle-class
folks would say: We didn't really see much of anything. We might have
gotten a little bit to take the family to dinner, but we don't remember
getting much of anything.
So, on the anniversary of the Trump tax law, the people who are
celebrating are the high flyers and corporate executives who are
tallying up stock buyback benefits and the handouts they got, but if
you work for a living, you really are saying: This sure looks like a
con job.
In the months and years ahead, my Democratic colleagues and I on the
Finance Committee and in our caucus are going to be working with
anybody who is interested in fixing our broken tax system for good. We
have shown that is our interest. Personally, I wrote the only two
comprehensive bipartisan proposals to reform our taxes since Bill
Bradley and Ronald Reagan got together, first with Judd Gregg, then the
chairman of the Budget Committee and, most recently, with our colleague
who is director of National Intelligence, Dan Coats.
So I and others--and I see Tom Carper, a valued member of the Finance
Committee from Delaware here--are committed to working with our
colleagues in a bipartisan way to have a tax system that gives
everybody a chance to get ahead. That is not what we got 2 years ago,
but we want it understood that we are going to continue, and I say
personally, as ranking Democrat on the Finance Committee, that we are
going to continue to reach out a hand of welcome to Republicans who
want to work for something different than what passed 2 years ago and a
tax code that would create one set of rules in America, built on
fairness, that applies to all Americans.
I note my colleague from Delaware is here to make remarks on this
subject.
I yield the floor.
The PRESIDING OFFICER. The Senator from Delaware.
Mr. CARPER. Mr. President, I thank my colleague and my friend for his
leadership, and I thank him for yielding the floor to me.
I have been here 19 years. It is pretty hard to believe. Some of my
detractors say it seems longer. It has gone by pretty fast. In the
past, I have been privileged to have been a naval flight officer for
many years and retired as a Navy captain. I am the last Vietnam veteran
to serve in the U.S. Senate today.
I have been privileged to serve as treasurer, Congressman, Governor,
and Senator for my State. I loved being Governor. I love being a
Senator. I am really lucky. There are 1,900 people in the history of
our country who have had the privilege of serving here, and we get to
be among them.
Before I came here, I was Governor for 8 years and got to be chairman
of the National Governors Association as well. It was a huge honor to
work with Governors. There are a bunch of former Governors here whom I
get to work with today. I like that a lot.
During the 8 years I was Governor, we had 8 years of balanced
budgets. In 7 out of those 8 years, we actually cut taxes, but we
always balanced our budget. We paid down some debt, and we earned an
AAA credit rating for the first time in State history. More jobs were
created in those 8 years--in the 8-year period in the history of the
State of Delaware. I don't say that to be boastful. I didn't create one
of them. As Governor, I tried to provide some leadership and to work
with stakeholders in our State and in our government and outside of
government--people from all walks of life and businesses large and
small. I tried to create a nurturing environment for job creation and
job preservation. That is what we tried to do, and we were pretty good
at it. We were pretty good at it. We are still pretty good at it in
Delaware.
That nurturing environment is made up of a lot of different things.
Among the elements are our workforce, people who are educated, trained,
and have the experience to work to contribute in the workplace, whether
it is agriculture, tourism, financial services, manufacturing,
technology, you name it.
Right now, we have a big challenge in filling all of these holes in
jobs around the country. We just got a jobs report last Friday that
shows how the job market was going in the country in the month of
November. One of the things we learned in the jobs report was that
maybe about 156 million or 157 million people went to work in November
every day, but there are 5 million or 6 million jobs where nobody
showed up. Nobody showed up because they didn't have the skills, the
education, or the training, or they didn't live in the right part of
the country, they didn't want to do that kind of job, or maybe they
couldn't pass a drug test.
A lot of jobs are going wanting in this country. That has to be a
concern as we try to provide a nurturing environment, work on the
workforce side of preparing them for success, and help to bolster the
growth of our economy going forward.
Among the other pieces of that nurturing environment, besides the
workforce, are access to foreign markets and the investment by the
Federal Government and State governments, too, in the private sector to
put investment into research and development that can be commercialized
in order to create the successful businesses going forward in the
future.
Transportation is important, not just roads, highways, and bridges,
but rail transportation, shipping, air. All of that is important.
Access to the internet--there are a lot of places in the country that
don't have access to the internet. We think they are just in rural
areas, but a lot of them are in cities--in cities that have tough
neighborhoods and are struggling.
Last night I was privileged to have dinner with the cabinet secretary
for the State of Delaware, who has been working in a great partnership
in our State, where the State provides money and we work with private
sector partners to help bring broadband to virtually every rural part
of our State.
[[Page S6963]]
That is a great goal, and I think we are closing in on achieving that.
That is another important element in the environment for successful
businesses and for business growth.
Other ingredients include public safety, and they include the
protection of our intellectual property, cyber security, and the
ability to make sure that for our products--whether they are goods and
services, or goods or services, or both--we have the ability to sell
those into markets around the world without impediment.
Another one that is important is the Tax Code--a tax code that is
fair, a tax code that fosters economic growth, a tax code that is not
incredibly difficult for people to understand and comply with, and a
tax code that doesn't leave us with a huge hole in our budget deficit.
The folks at CBO tell us these days, if we look at spending as a
percentage of GDP--Federal spending as a percentage of GDP--today, it
is a little over 20 percent, maybe 20.5 percent. The percentage of
revenues of GDP is about 16 percent. When you spend 20 percent of GDP
and you raise about 60 percent of GDP revenue, that delta there is our
deficit.
The deficit for the last fiscal year was $850 billion. I haven't sat
down and added this up. That is probably more than the first 200 years
of our country, combined, and it is $850 billion in 1 year.
The deficit for the current year is expected to be $1 trillion. It is
an unimaginable number, except maybe in the case of a war, like World
War II or maybe World War I.
I serve on the Finance Committee with Senator Wyden, Senator Brown,
who is on the floor now, and Senator Stabenow. We were faced with the
opportunity to do smart things with respect to our Tax Code, to try to
make it more fair, better able to foster economic growth, less complex,
and, actually, to reduce deficits.
As it turned out, without a single Democratic vote--in fact, we
didn't have the opportunity to offer amendments as the measure moved
through committee and on to the floor through the Senate, and we had no
opportunity to offer amendments.
I just sat in a hearing in the Finance Committee a few minutes ago,
and they quoted Rob Wallace, from Wyoming, a senior official now in the
Interior Department. Rob Wallace likes to say that the best solutions
are the most lasting solutions, and they are bipartisan solutions. They
are bipartisan solutions. We had the tax changes. They were massive
changes in the Tax Code that were run through here without any
bipartisan support.
We were told at the time the tax bill was signed into law by
President Trump that it would pay for itself, that it would not
increase deficits--that it would actually pay for itself, it would
lower taxes. It would pay for itself, and we would have more revenues.
As it turns out, that is not true. It wasn't true this time, and,
frankly, it has been asserted many times that if we can continue to cut
taxes, revenues will just flow, and everything will be just hunky-dory.
That is not true, unfortunately.
Almost 2 years, to the day, have passed since the Republican tax bill
was enacted. I think it is time to take a good look at some questions
that my Democratic colleagues and I posed when we were debating this
bill, to see how this law has fared.
First of all, is it fair?
A fair tax law would have ensured that working families in Delaware
and across the country share in the benefits of tax reform.
Unfortunately, the 2017 Republicans tax law fails the fairness test in
spectacular fashion.
According to the nonpartisan Tax Policy Center, by 2027, the top 1
percent of earners will receive 83 percent of this tax law's relief.
Eighty-three percent is for the top 1 percent. By the same time,
Americans earning less than $75,000 will actually see their taxes go
up. How about that?
When it became clear that the wealthiest Americans would get the
lion's share of the benefits, this administration tried to play a game
of smoke and mirrors with the American people by promising that their
massive corporate tax giveaway would trickle down to working families.
President Trump told us that the average household would see their
income increase by $4,000 to $9,000 per year. Sadly, it is clear that
has not happened. In fact, according to a report by the nonpartisan
Congressional Research Service, ordinary workers saw very little wage
growth in 2018.
What about the bonuses that workers were promised? That same
Congressional Research Service report shows that the bonuses attributed
by companies to the tax law--when divided among all American workers--
comes out to $28 per person. It is not exactly the rewards that were
promised.
The second question is, how does this tax law encourage economic
growth? It was passed at a time when we were about 8 years into the
longest running economic expansion in the history of the country when
this was enacted. It came as the economy was growing consistently for
almost a decade.
Two years ago, a survey of top economists from across the political
spectrum found that only 1 out of the 43 experts surveyed believed this
type of tax reform would boost economic growth. It turns out that the
other 42 were right. Don't take my word for it. Let's look at some
facts.
The CRS report I mentioned earlier found that in 2018, GDP grew at
2.9 percent, the same as what the nonpartisan Congressional Budget
Office predicted before the tax law was factored in. Business
investment did increase in 2019, but CRS found that the investment
patterns did not align with the incentives of the 2017 tax law, raising
questions about how much longer term, sustainable growth will result
from the law. For example, CRS found that the tax law made investing in
R&D comparably more expensive than investing in other areas, such as
equipment and structures. But R&D investment actually increased faster
than investment in equipment and structures in 2018.
In fact, now that the sugar high of the corporate tax cuts has
passed, business investment has started to slow in 2019 to the point
where the Federal Reserve has cited what they call continued softness
in business and investment as a key reason for the Fed's most recent
interest rate cut. Instead of sustained investments, corporations have
used their savings from the tax law for record-setting stock buybacks
that have an outsized benefit for wealthy shareholders and senior
executives.
Job growth follows the same pattern. Despite President Trump's
constant self-congratulations over jobs numbers, job growth has
averaged about 180,000 per month so far in 2019, down from the sugar-
high average of 223,000 per month in 2018. In fact, average job growth
in 2019 is more comparable to job growth in 2016, where it was about
193,000 a month. In 2017, it was about 179,000 per month, in the 2
years leading up to the tax law's enactment.
The third question: Did it simplify the Tax Code?
One goal of tax reform was supposed to be simplifying the Tax Code,
to reduce the unpredictability and uncertainty, but the 2017 Republican
tax law fails on this question too.
In 2017, Republicans said that after tax reform, Americans would be
able to file their taxes on a postcard. What we ended up with last year
is a mighty big postcard--one that included six new schedules, and, as
then-National Taxpayer Advocate Nina Olson predicted, caused additional
complexity and hassle for taxpayers, increased the risk of errors, and
resulted in higher tax preparation bills for most American families. In
fact, the word ``postcard'' got to be so unwieldy that the IRS has now
redesigned the form to look more like the one Americans filled out pre-
tax law.
We also failed to get greater certainty from the 2017 tax law. I have
heard from Delaware families and businesses alike that they are
concerned about the impact of the tax law's mistakes and unintended
consequences--an unsurprising development since our colleagues rushed
to pass the law in the dead of night without any public hearings and
with changes scribbled in the margins.
What is more, the law created a new fiscal cliff at the end of 2025,
which makes tax policy unpredictable for families and businesses.
That brings me to my fourth and final question: Has it been fiscally
responsible?
Even though the law's individual provisions--including the increase
in child
[[Page S6964]]
tax credit increase in the standard deduction--expire at the end 2025,
this law blows a $1.5 trillion hole in our national debt. And it will
be far costlier than that as the deficits grow in the years and decades
ahead.
Two years ago, our Republican friends in Congress and the
administration repeatedly claimed their tax law would pay for itself.
As I said earlier, it just hasn't happened.
According to the nonpartisan Congressional Budget Office, U.S. tax
revenue in 2018 was $275 billion lower than if the tax law had not been
enacted and lower than otherwise would have happened. This sharp drop
in corporate income tax revenue has been particularly dramatic.
CBO data shows that corporations paid $135 billion less in 2018 than
they would have if the law had not gone into effect--a decline of
nearly 40 percent. As a result, U.S. revenue as a percentage of GDP in
2018 was 16.4 percent, a lot lower than the 19 percent during the 4
years of balanced budgets in the Clinton administration, when we had a
Republican majority in the House and Senate.
The other side of this equation is, again, that the spending was 20.5
percent. That delta between those two numbers explains the deficit.
Let me close with this. I would like to quote a fellow from Wyoming,
who was recently before the Energy and Public Works Committee. He has
been nominated to be the head of the part of the Interior Department
that includes national parks and fisheries and wildlife. He used to
work for Malcolm Wallop here. He is a longtime friend of John Barrasso
and I think others from Wyoming, Mike Enzi. He is a very impressive
guy. I like him a lot. This is one of the things he said: Bipartisan
solutions are lasting solutions. That is what he said. He said:
Bipartisan solutions are lasting solutions.
The tax law that was enacted 2 years ago was not a bipartisan
solution. As it turns out, in retrospect, it has not been fair, it has
not fostered the kind of economic growth long term that we expected or
hoped or told it would bring, and it has not made the Tax Code all that
much simpler. And, finally, it has just dramatically inflated the
budget deficit. That is not sustainable. Other than that, it turned out
just great.
I yield the floor to some others who have been waiting, including
Senator Brown and Senator Stabenow.
The PRESIDING OFFICER (Mr. Perdue). The Senator from Ohio.
Mr. BROWN. Mr. President, I appreciate the comments of Senator Carper
and Senator Wyden and all the members of the tax-writing committee with
Senator Stabenow. I believe a couple more Senators will join us--I
believe Senators Cardin and Cantwell.
Thanks for the work you do, Senator Stabenow, on this issue and so
many others.
We all know now what the Trump tax scam did. We know it was a
giveaway to the richest people in the country. It was a $1.5 trillion
tax cut. Seventy percent of it went to the wealthiest people in the
country. We know that. We pretty much knew that in the beginning. We
know the President said all kinds of things--one lie after another--
about it.
I want to tell two stories. One of them is from when I was at the
White House with the President and half a dozen other Senators sitting
in the President's Cabinet Room when he was talking about the tax bill.
He said to me and to other Senators that every American will get at
least $4,000 more in their paycheck--at least. I guess he meant people
in Gallipolis and Ironton, OH, and Portsmouth and Cleveland and
Lansing, MI, and Kalamazoo and everywhere else. He said everybody was
going to get $4,000. That is what he said when the bill was being
written. When he signed it, he said everybody was going to start seeing
a lot more money in their paychecks. Well, he lied. No surprise there--
he always does that. He lies about a lot of things. But I particularly
take it personally when he lies about something like that; when voters
in Lima and Piqua, OH, don't get what he promised them; when citizens
and workers just don't get the help.
At the same time, when I was at that meeting, I went up to the
President. I had in my hand a bill I was working on called the Patriot
Corporation Act. I went up to the President after the meeting. I had
mentioned it during the meeting, and then I walked up to him and said:
Mr. President, this is the Patriot Corporation Act. I want you to
consider this.
Unlike the bill we were looking at, which gave tax cuts to all kinds
of corporations and all kinds of the wealthiest people in this country,
the Patriot Corporation Act was simple. The Patriot Corporation Act
said: If you pay your workers a decent wage; if you provide adequate
benefits--health and retirement--to your workers; and if you are in
manufacturing and you do your production in the United States, then you
will get a break on your taxes. So if you do things right as an
employer--decent wages, decent benefits, do your production in the
United States--you get a lower tax rate. But if you don't, if you pay
low wages or outsource jobs, you pay something called the corporate
freeloader fee.
This is because so many companies in this country--they might be
retail outlets, whatever these companies are--pay $8 or $10 or $12 an
hour, and their workers are eligible for Medicaid, food stamps, Section
8 housing, and, basically, those companies are subsidized by taxpayers.
So why not have a tax system where corporations that do the right thing
get a lower tax rate, and corporations that rely on the government to
fund them--food stamps, the earned income tax credit, Medicaid, and all
of that--those corporations ought to pay a corporate freeloader fee to
the government.
That is the first story. The second story I wanted to tell you
about--the three of us right here in this room right now, Senator
Cardin and Senator Stabenow and I, were in the midst of this--when this
tax bill was written, it was written in the Senate Finance Committee.
You know, when we do things in the Senate, we do these things out in
public--in the Senate Finance Committee--but we know that much of the
work is done in Senator McConnell's office down the hall. That is where
the corporate lobbyists who want these big tax cuts line up.
We were doing our public meeting in the Senate Finance Committee, and
they were in such a hurry to pass this bill. We worked way into the
night, which we are all fine with doing, but the next day we worked,
they were moving so fast that we would get an amendment that would be
handwritten in not very good writing, and it would be added to the
bill, and we really didn't know exactly what we were voting on. They
didn't want to give us time to do it.
The people who run this place--Senator McConnell and the special
interest lobbyists who line up down the hall--know that if they can
operate and people can't understand what they are doing--they will work
all night sometimes. They will do things by hand instead of actual
legible writing so that we end up with the kind of confusion that came
out of that. Well, you know what happened, Mr. President. There were
all kinds of mistakes in this bill, and the President signed it. We
didn't know what the mistakes were, but then we found out.
Now Republicans are coming back and they want us to clean up this
mess. Well, cleaning up the mess means more corporate tax breaks, more
giveaways to corporate America, and more help for the richest 1 percent
in this country.
We are saying: We want to fix the technical mistakes you made when
you hurried through this bill. We want to do that. We all voted against
the bill because it was a corporate giveaway and a giveaway to the
rich. We want to fix this so the Tax Code actually reads right and
there won't be all these court cases regarding it. But if we are going
to do that, you are going to give some tax breaks to middle-class
families, and you are going to pass legislation expanding the earned
income tax credit and the child tax credit.
We have simply said to the President and to the Republican majority
that writes these bills that we will work with you. We want to do that,
but you are not going to hurt middle-class and working-class taxpayers
again. You are going to expand the earned income tax credit, take care
of electric vehicles and the kinds of issues we want to do there, but
fundamentally you are going to help low-income and moderate-income
children whose parents work just as hard as any Senators work but don't
have much to say for it.
Again, it comes down to, whose side are you on? Are you going to
stand
[[Page S6965]]
with workers, or are you going to stand with corporations? Do you fight
for Wall Street, or do you fight for the dignity of work? If you love
this country, you fight for the people who make it work. The President
promised to fight for American workers. He betrayed American workers,
as he has betrayed American workers on minimum wage and overtime and
trade deals. He has betrayed workers over and over again. He broke that
promise he made.
It is important that we fix it and we fix it for the broad middle
class in this country.
I yield the floor.
The PRESIDING OFFICER. The Senator from Michigan.
Ms. STABENOW. Mr. President, I want to join with my colleagues today
in expressing great dismay as we are approaching the 2-year anniversary
of the massive Republican tax giveaway. Middle-class families and
workers have not gotten even remotely close to what they were promised.
Instead, President Trump and Republicans gave the big drug companies,
the wealthiest Americans, and other special interests an enormous tax
cut just in time for the holidays. Merry Christmas to them. But what
did he give the majority of families in Michigan? He gave them the
equivalent of a beautifully wrapped gift box with nothing in it. There
is a word for that, when you make a bunch of promises and fail to keep
them. In Michigan, we call that a betrayal.
President Trump made some really big promises about the Republican
tax giveaway. In his words, it would be ``one of the great Christmas
gifts to middle-income people.'' Unfortunately, President Trump turned
out to be less like Santa Claus and more like Ebenezer Scrooge. The
wealthiest 1 percent of taxpayers received an average tax cut 64 times
the size of the one given to the middle class.
He said--as my other colleagues have referred to--people would get an
average of $4,000 more in their income. We in Michigan are still
waiting for that $4,000 per person who is working to show up. What
happened is, the real number is about $514. And what is even worse is
that bonuses for working people have actually gone down 22 percent
since the tax giveaway passed. Bonuses are down, not up. You don't have
to have the math skills of Bob Cratchit to know that is far from what
was promised.
He also promised that businesses would use their tax windfall to
invest in workers and create jobs. Unfortunately, that has not
happened. We know that in the third quarter of this year, business
investment was a negative 2.7 percent. That is the second straight
negative quarter for business investments despite the promise of
``tremendous'' business investment. I am deeply worried because we have
had two straight quarters now of contraction on manufacturing, which is
actually the technical definition of a recession. Coming from Michigan,
where we proudly make things and grow things, that is deeply concerning
to me.
Meanwhile, in the first year of the Republican tax betrayal,
businesses rewarded CEOs and wealthy shareholders with more than $1.1
trillion in stock buybacks. What does that mean? That means you do a
buyback of your stock. It drives up the price of the company stock. It
enriches the CEOs and major shareholders but does nothing for the
workers. In fact, corporations spent 140 times as much money on stock
buybacks as they did on increasing wages and benefits for workers. In
2018 alone, the 10 biggest drug companies spent $115 billion--with a
``b''--on stock buybacks and dividends, but I don't recall seeing the
cost of medicine go down. Instead, they keep raising the prices, which
is outrageous.
Perhaps the most ridiculous promise that President Trump made was on
the national debt. He said: ``We have $21 trillion in debt.'' That is
what he said back in July 2018. ``When [the Republican tax law] really
kicks in, we'll start paying off that debt like water.'' I am not
exactly sure what that meant, but it didn't happen. Instead, the
Federal budget deficit has risen by $319 billion so far, and counting,
since the passage of the Republican tax law.
To add insult to injury, our friends across the aisle doing the
budget used the fact that there was a deficit to one more time say that
we need $1.5 trillion in cuts to Medicaid and $800 billion in cuts to
Medicare to reduce the deficit because, oh my gosh, we have a deficit,
so we should take healthcare away from seniors and families across
America.
On top of all of that, the Trump administration now is implementing
rules that could take food assistance away from up to a million people
who work part time or seasonal work. They get a job at the mall during
Christmas, but then they lose it. They are in and out of the market. By
the way, the average amount of help to these men and women who are
working hard, trying to hold it together, is $127 a month--just barely
making sure they are not starving. As another Republican President once
said, ``There you go again.''
Let me say in conclusion that 2 years ago, President Trump promised
middle-class families, working families across Michigan and the
country, a whole lot of things. He said that the deficit would
disappear, that corporations would pass along their tax savings in the
form of jobs and better wages, and that people would get $4,000 more in
their paychecks, in their income. He said that this giveaway would be
one of the great Christmas gifts to middle-class people. Instead, the
majority of Americans got a lump of coal.
Promises have not been kept. We believe in keeping promises in
Michigan. This is about more than the numbers; it is about making sure
everybody who is working hard is treated fairly and has a fair shot to
care for their families and have the American dream. That is not what
happened with this tax giveaway.
I yield the floor to the Senator from Maryland.
The PRESIDING OFFICER. The Senator from Maryland.
Mr. CARDIN. Mr. President, I join my colleagues on the floor today to
point out that 2 years ago, we had an opportunity in the Congress to
reform the Tax Code. The Tax Code, basically, was the one enacted in
1986. In 2017, we had an opportunity to reform that Tax Code, and that
opportunity was missed.
What the Republicans did, instead of engaging in a truly bipartisan
process that would have used the expertise of all Members of Congress,
they went on a partisan mission in order to help big corporations and
wealthy taxpayers at the expense of middle-income taxpayers and fiscal
responsibility. As a result, our children and grandchildren will pick
up the tab for this bill, and those who are going to benefit will not
be middle-income families. They are the losers. The ones who are going
to benefit will be big corporations and wealthy taxpayers.
Let me just talk about some things that should be the basic
ingredients for tax reform.
First, it should be fair to the taxpayers of this country. The tax
bill that was enacted 2 years ago was certainly not fair. It failed in
that test. As I pointed out, who benefited? Large corporations
benefited dramatically by this bill, but they said: Look, we will pass
it on to the workers. Yet did they pass it on to the workers? In 2018,
$1.1 trillion was used to repurchase stock to make the wealthiest even
wealthier, and it did not go to the benefit of the workers. The benefit
was the greatest on the personal income tax side as it went to the
highest income taxpayers. They are the ones who benefited the most, and
it was not fair to middle-income taxpayers.
Secondly, a tax reform bill should be fiscally responsible. After
all, we have taxes in order to raise revenue, in order to pay for
services so we don't borrow from the future--from our children and
grandchildren--to pay for what we are doing today. The administration
said this would be a fiscally responsible bill. The verdict is back,
and $2 trillion has been added to the national deficit--$2 trillion. It
has certainly failed on fiscal responsibility. Corporate taxes have
gone down 40 percent. So we have given a break to corporations at the
expense of our deficit. Who is picking up the bill? Middle-income
taxpayers are picking up the bill.
Thirdly, the Tax Code should be efficient, and we should try to make
it as simple as possible. No one can argue that the 2017 tax bill has
simplified the Tax Code or has made it more efficient. To the contrary,
we are now told we are going to need technical corrections because of
the mistakes that were included in it. I can say, in my talking to many
individuals who had the plan based upon the Tax Code, that there is
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so much more uncertainty in the Tax Code now than there was prior to
the passage of the 2017 tax bill.
Who is going to pick up the tab? Middle-income taxpayers are going to
pick up the tab, and let me just give you some examples.
The 2017 bill included a limitation on State and local tax
deductions, and let me just talk a little bit about the taxpayers of
Maryland. Almost 50 percent of Maryland's taxpayers used the itemized
deduction and took the advantage of taking off of their Federal taxes
what they paid in State and local taxes so they didn't have a tax on a
tax. As a result of the limitations that were imposed in 2017, these
taxpayers are now no longer able to take the full amount of the State
and local tax deductions. In fact, because of the full changes,
Maryland's number is down to about 25 percent when we did have almost
50 percent taking advantage of itemized deductions. We have lost about
half of those filers who today can't take any of those tax deductions.
This is an affront to federalism, and it also hurts middle-income
taxpayers. It is philosophically wrong to have a tax on a tax. So the
verdict is in with Maryland taxpayers, and the average refunds are down
6 percent. The refunds are what middle-income taxpayers depend on, and
they are down in our State.
It has also affected the ability of State and local governments to
provide essential services that are important for all citizens. Yet
whether it is their support for public education, public safety, et
cetera, these essential services are very much dependent on middle-
income families. All of those are now being stressed because of the
restrictions on State and local tax deductions.
Let me also talk about middle-income taxpayers. They don't benefit
from the corporate tax cuts, which I already pointed out, but these tax
cuts were made permanent. The individual tax changes were temporary in
nature. Again, this hurts middle-income families.
Lastly, let me point out that it was advertised by this
administration that it would strengthen our economy. When you take a
look at the first six quarters since the passage of the 2017 tax
giveaway to the wealthy families and corporations, the gross domestic
product has grown about 2.5 percent, which is far less than what the
administration predicted. If you take the six quarters before the
passage of the bill, it had gone up by 2.6 percent. So there has
actually been a slight decline, and we haven't seen a boost to the
economy.
There is a better way to do this as this bill ignores small business.
I have the opportunity of being the ranking Democrat on the Committee
on Small Business and Entrepreneurship, and we have had many
discussions with small business leaders who tell us this tax bill
actually hurts them--it doesn't help them--because they don't pay the C
rate but, rather, the individual rate, and the pass-throughs that were
put in here don't benefit small companies. So, when we are talking
about helping the driver of our economy--small business--the tax
giveaway 2 years ago has made it even more difficult.
The better way is to work in a true bipartisan fashion and engage all
Members of Congress on both sides of the aisle. Let us truly change our
Tax Code so that middle-income families benefit and so that we don't
burden future taxpayers by our making irresponsible changes that are
not fully funded. Let's do it in a way in which it will help the growth
of our economy. That is what we should be doing. There was a missed
opportunity 2 years ago, and it is moving the Nation in the wrong
direction.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. TESTER. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.