[Congressional Record (Bound Edition), Volume 163 (2017), Part 14]
[Senate]
[Pages 20316-20317]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          REPUBLICAN TAX BILL

  Ms. KLOBUCHAR. Mr. President, early this morning, the Senate voted on 
the tax bill. I voted against the measure, and as I have said many 
times, I don't think this is a bill that is going to work for my State 
or for America. The House now has one more opportunity. I don't think 
many people think they are going to change their vote, but I just hope, 
instead of celebrating what happens today, they are going to step back 
and look at what this really means.
  I am in a group of people who have long called for tax reform. In 
fact, 2 weeks before this bill passed, we stood before the public and 
said we would like to work with the Republicans on a bill to bring the 
business rate down and to bring the money in from overseas but a bill 
that didn't add this kind of weight to the debt and a bill that 
actually was good for all Americans, not just some Americans.
  We also could have done so much more. We are adding $1.5 trillion to 
the debt. Yet we are doing nothing for infrastructure. We didn't change 
the carried interest loophole. We did nothing to fix so many things 
that even the President had identified as things that needed to be 
fixed in the Tax Code.
  I have been concerned by this latest effort, which has not been 
bipartisan at all. It has resulted in a bill that will, as I said, add 
to the debt, create huge, new loopholes, and will encourage companies 
to move money around and move jobs overseas to avoid taxes. It will 
have huge, unintended consequences on the economy. Why? We didn't even 
have a hearing over this bill, a bill that will affect every single 
American.
  Over the next 10 years--and this is not disputed--this bill will add 
$1.5 trillion to our national debt, and even the most generous estimate 
says it may add $500 billion in economic gain. If that is true, this 
bill would still be adding $1 trillion to the debt. By the way, it is 
not the wealthiest Americans who are going to have to worry about that 
debt; it is the kids of middle-class Americans, of people who go to 
work every single day. What do they go to work to do now? To have a big 
chunk of their money that is going to pay for the interest on this 
debt. Almost all economists agree that a deficit-financed tax cut at 
this point in the business cycle makes no sense at all. If anything, at 
this time of low unemployment and strong market performance, it gives 
us a rare opportunity to try to, one, do something about our debt and, 
two, while we are doing

[[Page 20317]]

something about our debt, figure out what our priorities are for 
investment. I would say one of those top priorities is infrastructure, 
including broadband, including rural broadband. That wasn't in this 
bill. We accumulated $1.5 trillion in debt.
  Adding to the debt will, of course, put pressure on programs that 
everyday Americans rely on. This means Social Security, Medicare, and 
Medicaid. One of the most troubling developments in this bill was the 
inclusion of a provision to repeal a key part of the Affordable Care 
Act that would kick 13 million people off their insurance by 2027 and 
increase premiums by 10 percent in the individual market, and that 
means less money in the pockets of American middle-class families. The 
American people want us to move forward together to make fixes to the 
Affordable Care Act like the Murray-Alexander bill, but instead this 
bill moves us backward with a partisan approach that kicks people off 
their healthcare.
  This bill, in the end, is really a bait and switch. Millions of 
middle-class Americans will end up paying more in taxes in the long run 
since many of the tax cuts they receive, if they receive a tax cut at 
all, would only be temporary. In 10 years, most Americans earning 
$75,000 or less will pay more in taxes while people earning more than 
$100,000 a year will continue to pay less. According to the analysis by 
the Institute on Taxation and Economic Policy, 644,000 people in my 
State with incomes below $153,800 would see a tax hike in 2027. 
Meanwhile, a huge majority of the tax cuts in 2027 and after will 
benefit only the top 1 percent of Americans.
  The bill creates a new and complicated system of taxing the income of 
companies, especially with regard to their international income. The 
practical effect of this systemic change is entirely untested. While 
the bill seeks to impose a minimum tax on overseas earnings, it allows 
companies to blend the tax rate for income overseas. This seemingly 
minor detail opens a big loophole that can give companies incentives to 
move jobs to foreign countries and may create a whole new tax avoidance 
scheme. While I heard celebration in this Chamber last night, I can 
tell you who are really celebrating--the tax accountants, the lawyers, 
as people are going to pay them millions and millions of dollars to 
look for new loopholes in a scheme that, again, didn't even get a 
hearing. I support bringing down the rate on foreign earnings held 
overseas and to make sure the money, though, is invested here and 
invested in infrastructure.
  Bob Pozen, the former chairman of the oldest mutual fund company in 
the United States, has said the new system in this bill, which includes 
a new minimum U.S. ``tax is like Swiss cheese. It has so many holes 
that it would rarely be paid by U.S. firms.'' He goes on to say that, 
in fact, this proposal would encourage U.S. companies to ``relocate to 
foreign countries more of their U.S. factories and U.S. intellectual 
property such as patents and trademarks. A minimum tax would be 
effective only if it applied to the foreign taxes paid by U.S. 
multinationals on a country by country basis, rather than on an 
aggregate basis across all foreign countries.''
  Again, we haven't had one hearing to understand the impact of this 
bill.
  This bill would allow a one-time opportunity to bring back some of 
the trillions of dollars of earnings overseas. Again, I have long 
supported this, but I would also like to see at least part of this 
money be used on infrastructure. That was our original plan. Our 
original plan was that we were going to create incentives to bring the 
money in from overseas--a bipartisan plan--and then put a chunk of it, 
if the money was voluntarily brought back, into infrastructure.
  Why? Well, the American Society of Civil Engineers' 2017 report card 
gave our Nation's infrastructure an overall D-plus grade. There is an 
economic imperative to fixing our infrastructure. The future of our 
markets is exporting to the 90 percent of those who live outside of our 
shores. Yet this bill, with the accumulation of $1.5 trillion in debt, 
doesn't put the money into the infrastructure that will allow us to 
have that kind of an export economy.
  True comprehensive tax reform requires closing loopholes, yet this 
bill does almost nothing to close the worst loopholes in our current 
Tax Code. The carried interest loophole, which President Trump promised 
over and over again that he would close, is still there. The loopholes 
that benefit big oil are still there. The Buffet rule that would make 
sure the wealthiest Americans pay the same tax as their employees is 
nowhere to be found. I have already mentioned the new opportunities for 
tax avoidance created by the new system of international taxation. That 
is just one of them.
  This bill contains vast new loopholes for hedge fund managers, real 
estate investment companies, and anyone who can take a few minutes to 
reorganize as a passthrough business to take advantage of a lower rate, 
if they have the money to pay for a lawyer or pay for an accountant to 
do it. By taxing wage and salary income at a higher rate than so-called 
passthrough income, this bill creates opportunities for tax avoidance 
that are virtually unprecedented.
  Given the speed with which this bill was rushed through, enterprising 
attorneys and accountants are going to find dozens of new loopholes in 
the coming years. If done right, we could have closed loopholes. We 
could have brought back money U.S. companies are holding overseas to 
fund infrastructure projects here at home.
  We could have given local businesses the ability to compete against 
out-of-State internet retailers, support our rural communities, and 
provide incentives to keep jobs in America.
  I have always wanted to bring the corporate tax rate down--I have so 
many successful businesses in my State--but not like this, not with 
adding $1.5 trillion in debt that is going to be put on the people whom 
I represent in my State, who just go to work every day. They don't have 
holdings overseas. They don't have a hedge fund manager. They don't 
have people who are investing money in all kinds of ventures all over 
the world. They just go to work and get an hourly wage or maybe they 
get a salary, and they just get enough money so that they hope they can 
have a house and send their kids to college. This bill doesn't make it 
easier on them.
  It does not simplify the Tax Code. If anything, it makes it more 
complicated. It does not close loopholes. It is a huge missed 
opportunity.
  A few weeks ago, I joined 17 of my Democratic colleagues in calling 
on our Republican colleagues to join us in a bipartisan approach to tax 
reform. Unfortunately, the bill that we voted on early this morning--
and the bill that the House still has an opportunity to look at once 
more--involved negotiations only on one side of the aisle. When that 
happens, bad things happen.
  We can do better. I will continue to work across the aisle on 
bipartisan solutions. We have to make changes to this bill going 
forward. We know that, and the American people will depend on it.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mrs. Ernst). The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. CASEY. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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