[Congressional Record (Bound Edition), Volume 163 (2017), Part 14]
[Senate]
[Pages 19843-19846]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          REPUBLICAN TAX Bill

  Mr. VAN HOLLEN. Mr. President, I come to the floor this afternoon 
because of the reports that the House and Senate conference committees 
on the

[[Page 19844]]

tax plan are nearing an agreement or may have reached an agreement. By 
all accounts, this would be shaping up to be one of the greatest 
legislative heists in American history.
  It is hard to imagine that you could take a tax code that is already 
stacked in favor of the very wealthy and very powerful special 
interests and actually make it worse, but that is exactly what we are 
hearing coming out of the conference committee. This is being worked 
on, essentially, by our Republican House colleagues and our Republican 
Senate colleagues.
  The actual conference committee is a bit of a charade because all the 
real discussions going on with respect to the tax bill are done behind 
closed doors, with lobbyists who are putting on the finishing touches.
  Here is what we are hearing from the reports that are coming out. We 
have already gotten details; some of the details had been released.
  From the Associate Press: ``Ample tax cuts for business, wealthy in 
new GOP tax accord.'' That is the headline about the tax plan that will 
be coming to this Senate soon.
  The reality is that any tax cuts for middle-class families are going 
to be a lot smaller than the tax cuts for the very wealthy, and they 
are only temporary.
  Also, make no mistake, you are going to see millions of middle-class 
families actually see a tax increase, but those who will get some small 
tax relief will see it only on a temporary basis, and then it will 
disappear. The corporate tax cuts--they are forever under this 
Republican plan.
  Here is the headline of the Washington Post about what is coming out 
of the House-Senate Republican conference committee: ``Republicans 
reach compromise tax plan, expanding tax cuts for the wealthy.''
  Let's get this straight. We had a Senate bill and a House bill. The 
Senate bill actually reduced the top rate--that is the rate that 
applies to the wealthiest in this country--to 38.5 percent. It is 
currently 39 percent; they reduced it to 38.5 percent. In the House, 
they kept the top rate where it was. So the Senate bill is 38.5 
percent; the House bill is around 39 percent. Republicans from the 
House and the Senate go behind closed doors, and where does it end up? 
They actually cut that top rate for the wealthiest folks in this 
country to a place that is lower than either of the tax bills that went 
into conference.
  So you take these bills and go behind closed doors, and all of a 
sudden, the wealthy--who are already doing really well under the House 
tax plan and the Senate Republican tax plan--do even better because 
they are dropping that top tax rate to 37 percent.
  For those who think that a drop from 39 to 37 percent doesn't sound 
like a lot, I will tell you, if you are making $1 million, that is an 
average tax cut of $20,000 a year when millions of American middle-
class families are seeing their taxes go up and so many others are 
getting crumbs and, again, just temporary crumbs.
  We were promised this would be very different. This is what President 
Trump's Secretary of the Treasury, Steve Mnuchin, told us: ``There will 
be no absolute tax cut for the upper class.'' That is clearly false 
because the upper class is getting a big tax windfall. Not only that, 
but as I just said, those tax windfalls are getting larger in the bill 
coming out of the conference than they were going in.
  What we are seeing is a lot of promises that sounded really nice to 
the American people, but it turns out it has been a scam. What people 
were told was that this was going to be out there to help working 
folks, and that is not what they are getting. That is why all the 
public surveys show that the American public doesn't like what they 
see, and that is why there is this effort to rush this through so 
quickly.
  My plea today is that there is still time. There is still time to 
turn back from this tax plan that is going to do so much harm to our 
country in the coming years.
  There certainly is an opportunity here for our Members on the 
Republican side to take a final look at what is coming out of this 
conference and decide to turn back and work on a bipartisan basis for 
real tax reform, not just something masquerading as tax reform, which 
is really a tax break for the big corporations.
  Exhibit A as to why this is not tax reform is the broken promise with 
respect to closing the carried interest loophole. People will remember 
President Trump talking about that. I don't know what is going to come 
out of conference in the end, but what I do know is that neither the 
House bill nor the Senate bill closed the carried interest tax break. 
For hedge fund managers who are making big bucks, that is the loophole 
that allows them to pay a lower tax rate than the folks working for 
them in their office--for the secretaries who work in their office, for 
the folks who come in and clean the offices. The hedge fund managers, 
through the carried interest loophole, actually pay a lower tax rate in 
many cases than those folks who are working for them.
  In fact, it is such an outrageous loophole that Donald Trump got big 
headlines during the 2016 campaign. He promised during the campaign 
that he was going to close that loophole. In fact, when he was asked on 
the campaign trail for an example of what was wrong with the current 
Tax Code, for an example of how powerful special interests got their 
day using their lobbyists in Washington, he said: Take a look at that 
carried interest loophole. In fact, Candidate Trump specifically said: 
``The hedge fund guys are getting away with murder.'' That is what he 
said on the campaign trail.
  We are about to vote on a bill that claims it is tax reform; yet 
neither the House bill nor the Senate bill that went into conference 
touched this loophole. By all accounts, the bill coming back to the 
Senate doesn't close it either.
  It is not as if we didn't have a chance to fix it. In fact, right 
here on the Senate floor, Senator Tammy Baldwin offered a motion to 
close the loophole, to do exactly what Candidate Trump said that he 
wanted to do. But every single one of our Republican colleagues voted 
against closing the carried interest loophole. I guess that means, in 
now-President Trump's words from the campaign, that this tax bill will 
let those hedge fund managers ``get away with murder.''
  Don't tell us that this is about getting rid of special interest 
loopholes when it doesn't eliminate exhibit A of a special interest tax 
break that Candidate Trump talked about. It is exhibit A of broken 
promises. He said: Let's not let those hedge fund managers get away 
with murder when it comes to the Tax Code. Yet nothing was done about 
it in this piece of legislation.
  It gives you a clear understanding that this is not about tax reform, 
not about getting rid of those loopholes. What it is about is stacking 
the deck even further in favor of very powerful corporate special 
interests and the very wealthy against middle-class, working Americans.
  After all, President Trump said: This tax bill is going to put the 
middle class first. In fact, here is what he said, again, when he was 
running for President: ``Everybody is getting a tax cut, especially the 
middle class.''
  More recently, this is what the Republican Leader Senator McConnell 
said: ``Nobody in the middle class''--nobody in the middle class--``is 
going to get a tax increase.'' That is untrue, and the Republican 
leader has acknowledged that. But that is not what was promised to the 
American people, not by Senate Republicans and not by the President of 
the United States.
  In fact, under the House and Senate bills, more than 10 million 
families--10 million families--who make less than $200,000 a year are 
going to see immediate tax increases. What happened to that promise of 
no tax increases for anyone in the middle class? It is already broken.
  Instead of putting middle-class families first, the biggest tax cuts, 
by far, go to people making more than $1 million a year. In fact, those 
families making more than $1 million a year get an average tax cut of 
$35,000 a year right away. Just to give people some perspective, this 
is a tiny sliver of

[[Page 19845]]

American households, fortunate households. We want more millionaires, 
but how do you explain in a bill masquerading as a middle-class tax cut 
that it is the millionaires who are doing so much better than everybody 
else?
  Just to give you some perspective, for every 1,000 American families, 
there are four who make more than $1 million a year. That is great for 
them, and we want them to do well, but why we would give them the 
biggest tax cuts, rather than folks in the middle who are working hard 
every day, is something our Republican colleagues will have to explain.
  We are now talking about 710,000 wealthy families getting that tax 
cut of an average $35,000 a year, compared to 10 million middle-class 
families who are going to see tax increases--tax increases. It gets 
worse because the tax cuts for families are only temporary. At first, 
many people will pay more right away. Other families may see a little 
tax break right away, but it goes away, except for the corporate tax 
cuts, which are permanent. In fact, some families are going to see 
permanent tax increases to pay for the permanent tax cuts for 
corporations.
  This chart is from the nonpartisan professionals. This is the Joint 
Committee on Taxation. As we can see, when this bill fully kicks in, 
here is what the situation looks like. If you make $75,000 a year or 
less, your taxes are going to go up when it is fully kicked in. I am 
going to say that again. If you make $75,000 or less, your taxes are 
going up when this plan fully kicks in.
  As you can see, in addition to that, that means, of course, that your 
after-tax income is going to go down. This chart takes into account the 
idea that because we are going to give tax cuts to corporations, some 
people are going to see some lift in their income. So what this chart 
tells us, which is very important, is that even if you take that into 
account, people's after-tax income, if they are at $75,000 or below--
what they have for their family, what they have to pay the mortgage or 
pay the rent--is going down.
  Then there are some folks between $75,000 and $100,000 who pretty 
much, when this is phased in, will see no real change.
  But let's look out here. Let's look at the folks who make over $1 
million. When this kicks in, they are going to be doing even better--
much better--when it comes to their after-tax income. How much income 
do they have after paying taxes for their families? Even after many of 
the tax cuts phase out, the after-tax income for folks at the top will 
go up. Why? Because folks at the very top are the ones who have most of 
the stock holdings in our major corporations. So they are the ones who 
will continue to benefit over time from those permanent tax cuts to 
corporations.
  So this is a really important chart done by the professionals here in 
Congress that lets people know the answer to the very important 
question, which is this: How much will I actually have in my pocket 
after taxes for my family when this thing fully kicks in? That is what 
that tells us.
  In fact, this chart really undermines entirely the Republican claim 
that there is going to be some kind of big trickle-down benefit from 
this tax plan to most families. We have tried trickle-down before. We 
tried it in 2001 and 2003 with the Bush tax cuts. Trickle-down ran into 
the wall of reality around the country. After-tax incomes for the folks 
at the top went way up. The debt went way up. Everybody else was 
standing still or falling behind. That is what happened, and that is 
what will happen again.
  Now, we were promised by the Secretary of the Treasury that they were 
going to do this analysis that showed that if you cut taxes for all of 
these folks at the top--the wealthiest Americans--and you cut taxes for 
corporations, it was somehow going to create so much economic growth 
that the additional tax revenue from that additional growth would 
actually pay for the tax cuts. They promised we were going to get this 
big analysis. At the end of the day, they couldn't produce it; could 
they? They couldn't produce it.
  Instead, just a little while ago, we got one page. We got one page 
from the Department of the Treasury. Nobody put their name on it 
because the Secretary of the Treasury couldn't find any professional 
person to put their name on this one page. When you actually read it, 
you know why. It is because it just assumes the answer to the question. 
It assumes there is going to be all of this additional economic growth. 
Although, if you actually read it, they even acknowledge that the tax 
plan itself will not generate enough economic growth. They talk about 
other policies that are going to generate all of that other economic 
growth to allow the tax cuts for corporations and others to pay for 
themselves. They don't tell you what it is. The Presiding Officer could 
make up a number or I could make up a number. That is all they did. 
They made up a number and put it on a page.
  I really hope our Republican colleagues, who were serious when they 
asked the Treasury Department for that analysis, will recognize that 
they got taken for a total ride by the Treasury Department, because 
this doesn't pass the laugh test. This is intellectually dishonest, and 
I am sure that the folks who put it out know that.
  So if it is not going to happen by magic--and economic growth is not 
going to happen by magic--how are we going to see the benefits that 
were promised by our Republican colleagues, that when you give those 
big tax cuts to corporations, it is going to result in higher wages and 
all of this economic growth? We know it is not going to be true because 
they couldn't come up with any serious analysis. We also know that it 
is not true because the CEOs of these corporations are themselves 
telling us it is not true.
  Here is what happened just a little while ago. The Wall Street 
Journal had a forum. They invited CEOs. At this forum, they asked the 
CEOs in the room to raise their hands if they planned to use the tax 
cuts their corporations were getting to invest in their own businesses, 
to invest in their workers. Guess what. Hardly any of those CEOs raised 
their hands. In fact, Gary Cohn, one of President Trump's top economic 
advisers, looked around the room and saw just a few hands raised, and 
he asked: ``Why aren't the other hands up?''
  The reason the other hands weren't up is because the CEOs of those 
corporations do not plan to use their big tax breaks to give their 
workers wages or to invest in their businesses. These corporations are 
making record profits now, and they are not using those profits for 
those purposes. In fact, as has been widely reported, those 
corporations plan to use their tax windfall for stock buybacks and to 
provide higher dividends to their stockholders. So stockholders are 
going to do great. CEOs are going to do great. Everyone else is going 
to be left holding the $1.5 trillion debt that they are putting on the 
national credit card.
  Here is what MarketWatch reported. This is the MarketWatch, December 
8, headline: ``Share buybacks spike--dropping a strong hint at what 
CEOs plan to do with tax savings.''
  This is before the tax plan was even passed. People were just 
salivating at the idea that they are going to get this windfall that is 
going to go to CEOs and other executives and big shareholders.
  Here is the subheadline in MarketWatch: ``Forget trickle-down 
economics: Shareholders, not workers, will be big beneficiaries of tax 
reform. . . .''
  Next sentence: ``Long-term investors and workers hoping that the tax 
overhaul and repatriation holiday will encourage investment in growth 
and a rise in wages should brace for a disappointment.''
  No Senator should tell us a few months from now that they were not 
warned that this is exactly what is going to happen.
  Do my colleagues want to know who a good chunk of those shareholders 
who are salivating about this windfall are? Well, 35 percent of the 
shareholders in American corporations are foreign stockholders. Thirty-
five percent of those folks who are waiting for

[[Page 19846]]

that big corporate tax windfall are foreign stockholders. In fact, the 
Senate tax bill gives these wealthy foreign shareholders a $31 billion 
tax cut in 2019 alone. In the House bill, it is even bigger: $50 
billion in tax breaks to foreign shareholders in 2019 alone, paid for 
by increasing taxes on millions of middle-class Americans.
  For those Americans who are getting a small tax cut, let's take a 
look at how their tax cut compares to the windfall for big 
corporations. Here is how skewed it is. In the year 2019, the House 
bill gives $11 billion more in tax breaks to foreign shareholders than 
it does to every single working-class and middle-class family in all of 
the States that voted for Donald Trump in 2016 combined--combined. 
Think about that. For every single middle-class family in every one of 
those States who voted for Donald Trump--those who are actually getting 
some tax cuts--you add it all up and foreign shareholders get $11 
billion more than they do. Again, millions of middle-class taxpayers in 
these States are actually going to see their taxes go up so that the 
money goes into the pockets of foreign shareholders--so much for 
putting America first, so much for putting middle-class taxpayers 
first.
  So just to be clear, it means that all of these families in all of 
the States that voted for Donald Trump with incomes of $100,000 or 
less, if you add up their small tax cuts, it is still $11 billion less 
than the tax cuts for foreign shareholders. That is for the folks who 
are actually getting tax cuts in those Trump States. As I say, millions 
are actually going to see their taxes go up.
  Now, I want to focus on one other promise that was made by President 
Trump and Republicans about their tax plan. They said it is going to 
bring jobs back to America from overseas. As we look at this plan 
coming out of conference committee, this may be the worst and meanest 
of all the broken promises, because when you look at this plan and you 
talk to economists who don't care about political party, they will tell 
you that this plan is actually going to increase the incentive of 
American businesses to move their jobs and operations and factories 
overseas.
  Let's just take a quick look at this because I am appealing to my 
Republican colleagues to fix this before it is too late.
  First, it is important to understand that the Republican tax plan now 
will allow U.S. corporations to pay zero taxes on their foreign 
profits. If you have a company overseas, currently you have to pay U.S. 
taxes on the proceeds on that after you have paid the foreign 
government, but under the Republican plan, you pay zero taxes on those 
overseas profits. So under the new plan that reportedly is emerging, 
corporations will have a 21-percent U.S. tax rate, but if you move your 
business or company overseas, it is zero, not 21 percent.
  Now, just like today, those corporations that move their businesses 
overseas will have to pay taxes to those foreign governments on the 
profits they make overseas. Lots of those corporations can shift those 
profits to parts of the world where there is zero income tax liability, 
and Republicans in the House and Senate claim that they solve this 
problem by going to a minimum tax on certain foreign profits.
  Here is how our Republican colleagues claim they fix this problem. 
Let's say a company either has its headquarters or puts its profits in 
the Cayman Islands. I hope my colleagues will follow this and fix this 
while there is still time. You have $2 million in profits in the Cayman 
Islands, so you pay zero foreign taxes because the Cayman Islands 
doesn't have any tax. Of course, under this plan, you pay zero U.S. 
tax--except our Republican colleagues said they have a plan to address 
this problem; that is, in this situation, there will be a 10-percent 
minimum tax. So on the $2 million in profits in the Cayman Islands, you 
would actually pay a tax of $200,000. That sounds good. At least that 
is a small fix, supposedly. But then in the same bill there is a huge 
loophole to this fix, and that is that corporations get an exemption 
from this minimum 10 percent tax if they move their factories overseas. 
If you move jobs overseas, you can escape that 10 percent minimum tax 
because in the Senate bill corporations get an exemption that equals 10 
percent of the value of all their offshore factories and equipment. The 
House bill is similar. What does that mean? That means that if you are 
a corporation, you get an exemption from the foreign minimum tax by 
shipping factories and jobs overseas.
  Here is the math. A corporation made $2 million in the Cayman 
Islands. Remember, they were going to pay $200,000 in taxes on that. 
But now they move the factory overseas. That is worth $100 million, and 
it makes a $5 million profit. Now they add up their overseas profits, 
and they are now below that--they are 7 percent--and they pay no 
foreign minimum tax on that.
  Since then, Gene Sperling and many economists have raised alarm bells 
about this. Yet our Republican colleagues seem to have blinders on 
about the commitment they made to make sure that we don't offshore more 
American jobs. This will offshore American jobs.
  This bill is full of broken promises. I ask my colleagues to go back 
and look at what was promised by Candidate Trump, President Trump, and 
our Republican colleagues, because the tax bill doesn't do that. I also 
urge my colleagues to allow the newly-elected Senator from Alabama, 
Doug Jones, to have a vote on this incredibly consequential piece of 
legislation. He was just elected by the will of the people of Alabama, 
and we should not rush headlong into passing this bill, which will 
impact the people of Alabama like everybody else, without his having a 
chance to vote on it.
  This is something Senator McConnell mentioned in a similar situation 
many years ago when Scott Brown from Massachusetts was elected to fill 
the seat of Senator Kennedy. He asked people to wait and allow Senator 
Brown to weigh in on the healthcare bill. They did. Doug Jones and the 
people of Alabama deserve the same respect, and the people of this 
country deserve a Senate that is duly elected to make this very 
important decision.
  There is still time. There is still time to turn back in the 
conference committee. There is still time for Senators to say that the 
bill that is emerging doesn't match the promises that were made. We can 
go back to the drawing board and come up with real, bipartisan tax 
reform. Let's do that.
  The PRESIDING OFFICER. The Senator from Alaska.

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