Skip to main content

tv   House Ways Means Tax Reform Markup  CSPAN  November 7, 2017 4:14am-6:58am EST

4:14 am
will talk about security of the voting systems and public follows issues. be sure to watch c-span's washington journal live at 7:00 a.m. this morning. join the discussion. >> the house ways and means commission continues work on the house reform bill. themendment was offered to legislation that makes significant changes to the bill carriedg to the interest deduction. watch live coverage starting at 10:00 a.m. eastern on c-span3 and c-span.org. you can listen with the free c-span radio app. republicans brought their legislation to the ways and means committee to debate. the committee heard from the head of the committee on nonpartisan tax
4:15 am
analyst. kevin brady chairs the house ways and means committee. mr. chairman. and i think my good friend from pennsylvania for talking about the need to have the facts. it would've been great to have the facts here. it would've been great if we had one witness, one expert. instead we will have to go back and forth for arguments. i would like to submit the facts about the impact. he was the bill, and i understand -- may ask you a question? later on?e submitting will it correct the bill further? >> we will continue to correct -- improve this bill. >> the gentleman can review the amendment.
4:16 am
>> we don't have that information and we have not been allowed in the expert testimony and you can't understand why we are upset. you can understand why there are 41% of the people, 41% make those deductions. asked, what have your colleague described in new york is happening in massachusetts and new jersey and maryland and in california and washington state. coincidentally, blue states. having said that, what you are this to them as having regional shift of money. you are asking them to pay more. it is double taxation and you are taxing the success of professionals because they have been successful in what they have done. you are doing it without a
4:17 am
single expert or public hearing. that is what we are met about. we started out with what we thought was on the same page with everyone saying, yes, we certainly would like to see lowerindividual rates and corporate tax rates. and yes, we thought it would be a good idea also if they were both revenue neutral as they were in 1986 and as mr. neil has pointed out time and again that mutual proportionately as well. we also thought it would be a good idea to simplify the tax cut but this neither simplifies it nor is it revenue neutral, and i wouldutral like to submit for the record connecticut, from mr. peter grossi talks about the impact on the engineering firm and what it does because there are always winners and losers.
4:18 am
and when there is no expert testimony and when you just gymnast him because you want a political win, not a win for the theican people but for republican conference. congratulations. you will probably get that win for your conference but at the expense of many, many american people. and it is so -- not only, and i quote mr. brady here, but it was on morning joe how you will possible make up this money, this huge debt you are placing on the american people and he said well, actually you are right about that. you make a good point. we are not going to see this growth. this is just phase one. the next phase is we're going to make these cuts. what are those cuts? those cuts come in the way of social security and medicare.
4:19 am
so, for all of you out there to understand why there is no expert testimony it is because you know what that will do to you. not are out to cut entitlements because social security is an entitlement, it is the insurance all of you hate for. so is medicare. it comes in under the code under something we call fica, the federal insurance countries and act. his countries and, yours. what do they hope to cut? your benefits. i yield back. well. i'm sitting here thinking if the american people are watching this here today they are wondering what is going on here. are taking the american people's money and where using this billrly and actually starts to fix it and give it back to them. so when you shake your head yes let me finish the sentence,
4:20 am
because that is the problem. the american people are saying i'm working everyday and i don't have enough money to pay my bills and i end up paying these taxes and they go to washington and by the way, you know who puts his books together? you guys did. the ways in means committee did. if you are here with these laws were being passed, and mean, everybody on this committee is laws and taxes are being passed, you have been with this section of laws and we are trying to fix this section of laws by burning it down to a better tax system. so don't blame the ones putting the books together, blame the committee for putting the books together. that is to put all those laws together. let's talk about what we keep talking him up. you guys keep talking about stuff and i really don't get it. i mean, these are itemized deductions. works?realize how that summary has a loss. they have insurance. it pays for as much as a loss as
4:21 am
they can and then what is left over, there is a -- an amount, 1% of adjusted gross income and then it becomes in the demised deduction. deductionse itemized where, as you've already said, you've doubled the standard deduction on average. i realize there is no district like connecticut. you're right, connecticut has a unique situation. but how many people, with you double the standard deduction, eighttemize? >> combination of doubled standard deduction -- it was a combination of the double ,tandard deduction and another six percent. >> you also said the majority of the people are primarily d wealthier people. cap -- >> the top half. this bill, we are
4:22 am
affecting people who are not able to itemized reform. who were not able to get the opportunity. who were not able to get discredited now they will get an opportunity to save taxes. that includes state and local taxes, casualty loss, interest on homes and mortgages, all of the stuff. you want to keep talking about this? can we at least make sure we're talking about 6% except for some unique situations. that is really the key hair. -- that is really big key hair. how do i get some help.
4:23 am
we can talk about whatever you guys want to talk about. we going to them to itemize benchmark that is 6%? in the end, think what we need to talk about is the hard-working american taxpayer and making sure they are getting a little bit more take-home pay so they can make ends meet and stay bloom of money. and i think my friend said, he represents -- so i -- i represent firefighters. i represent all of those same people. i represent all of the same people who will get that tax break and want that tax break. i think that is important. 94% of these people, 94%, will not be itemizing on the average. you've got to start thinking come ofose firefighters this police officers, who will now have the opportunity to bring some more tax money home. i think you and i gild back.
4:24 am
>> thank you mr. chairman. it is kind of fun watching the opening bid of the process. my friends have been acting way from there proposal. now that we are finding other things, we won't know probably till he gets to the floor but as a tactical matter, what is clear is that they are focusing benefits on those who need it the least in this country. very large corporations, very wealthy individuals. hedge fund managers and athletes and professionals are going to pretend to be small businesses and be able to exploit a new loophole. what is clear is that our friends on the republican side have established up to a trillion and a half dollars in extra debt we will take on. several of my colleagues have pointed out, we pay interest on that debt.
4:25 am
over $21.5 will be trillion. 1% increase in the historically low interest rates we are facing. that will add another trillion and a half. i remember many of my friends on the committee used to be upset about deficits. we are wiring and a significant amount. there is an additional fact that concerns me. if you really want to help low and moderate and middle income people, we could have worked together to fashion things that would do that. we have republicans in the expandwho are willing to the earned income tax credit and make it refundable to deal with the 35% of the people your proposal leaves out altogether. we could further reward work.
4:26 am
this was a proposal that came in reaganagan -- in the administration. if you wanted to work with us in the grand committee of this tradition, i am wearing the ways and means bowtie i created rating.o chairman i found a way to cut it down and turned it until bowtie, we could've done that. there are some interesting proposals here dealing with what happens to the mortgage reduction. your knowledge the benefit is focused on people who need it the least. we could've crafted something that would be acceptable to the homebuilders and to the realtors and help americans who are struggling to deal with housing. not the most wealthy. but you chose not to do that. you are breaking a commitment with the wind energy industry that a number of us worked
4:27 am
together on a bipartisan basis to have a five-year phaseout and by the way, there were more jobs and patrolrgy ben: him. good family waged jobs. made in america industry. and the industry stepped forward with some $50 billion because congress, this committee included, worked out a compromise. i think it is the only provision you have included that is retroactive. why cannot we have added hearings to figure out what that is going to do to the wind energy in texas, in the upper midwest. but no, you are going to pull the plug on this. >> mr. kelly and i have been working on private i do but he warned. a pretty easy way to invest in infrastructure. gone. on whyu have a hearing those should be sacrificed he concentrate benefits on those who need it the least? anything like
4:28 am
that. it goes on and on. the number of you are from states that is the cap and raised the guests tax. in south carolina was passed over the governor's veto. couple of each, we could put together a broad coalition of people who are going to come in and say "invest in american jobs. renew and rebuild american. ." se my taxes we could've done this and bring people together rather than divide them. but we have not had those hearings. instead, we come in and get something dropped on us that will continue to change until it is on the floor of the house and then it will be changed again in the senate because a number of these things are absolutely nonstarters. it did not have to be this way.
4:29 am
the traditions of this committee and what happened the last time this happened on a bipartisan basis with president reagan. i find it unfortunate. >> thank you. >> thank you mr. chairman. i am very excited about being here today. i have been waiting 11 months. i've been on this committee. cuts and atax simpler and more fair tax code to middle close -- class families. we all know it is broken. american people are reminded everyday. i am excited we are taking action to actually help middle-class families. day has been years in the making. scores of hearings have let his hair for families. .elivering tax cuts a tax code so simple you can file it on a postcard.
4:30 am
we are enhancing the child tax credit. encouraging people to say for retirement. streamlining subfamily doesn't have to dig through legalese to figure out what works and what does not. we're doubling the standard deductions. we are allowing hard-working hoosiers to keep more of their money. take thelers already standard deductions and for the vast majority of my district they can keep the standard deduction and keep even more of their own money. many of the remaining of 20% to itemize will now be able to save time, money, and stress by taking the standard deduction. i have been traveling. my constituents are excited. they are excited for a simpler, quicker process that makes it more pain-free. vital small businesses in a lower rate of 25%.
4:31 am
family businesses past down for generations will not have to worry about estate tax. we are repealing it. this makes america far more competitive against foreign impediments. the tax code discourages companies from bringing back profits. it discourages companies from creating facilities here. no more. hr one lowers the rate, making it more attractive for companies to make new investments here or grow the one sailor you have. .ncentivizing u.s. companies mr. chairman, there is a lot to like in this bill. we have a long week ahead but i am excited to work with you and my colleagues today as we allow all ships to rise. i yield back. >> to strike the last word.
4:32 am
>> mr. chairman, i think what you are hearing so far is a whole lot of pent-up frustration about the process that lead us to this point. it is unfortunate because it did not have to be this way. i think there is great consensus 31oughout the country that years to take a serious run at the tax code is too long. there was bipartisan agreement concept.overlying to simplify, simplify, simplify the code to make it more repetitive with what the world has done in to make it more fair. and families in wisconsin. we're hoping we would not see a redo of more trouble down economics that have failed in the past. tax cuts for the most wealthy thatultinationals hoping would affect everyone else. we are meant down the road before. what is most troubling about this is that in order to develop
4:33 am
that, this committee has to do the homework, the hardware, having proper hearings on discussions across the aisle. proper vetting. listening to the people back home. too many of my republican colleagues have chosen not even to a public listening sessions anymore. thehould be running toward criticism. finding out what people are concerned about and quite frankly, other things congress is and is are not doing end run to that criticism and learn from it. to adopt those principles. none of that work has taken place. we have been shut off from the process. it did not have to be that way. our i partisan muscles have atrophied. we are a shell of what this congress should look like. it is all behind closed doors. dark of night legislation.
4:34 am
elseown directing everyone to fall in line. the great loser in this is the american people who should be us, testifying. raising alarms and telling us, you may want to think about this or the unintended consequence of that. we had none of that. we are flying in the dark hoping for a safe landing zone. we have been down this road before. the reagan tax cuts. the trickle down that was expected to lift all boats. economic data shows under your plan you will get the tape of birth we need but what is different this time and i asked the staff to put up a chart to help me illustrate the point is from 2001, 2 thousand three, where we are today -- we have run out of time. we do not have the luxury of
4:35 am
making a huge fiscal mistake and having enough time to recover before we have 70 million baby boomers who are beginning to start their massive retirement, 10,000 a day entering social security and medicare. we make that today and there is no time to recover. gdp ratiour debt to under the president reagan because of the exploding deficit and the old bush tax cuts, roughly 25%. followed with the 2003 tax cuts, 57.5% gdp. today, 103% mr. chairman. the clock has run out. we cannot take this gamble of hoping for some mythical economic growth that will somehow bail us out from unfundedtrillion of
4:36 am
tax cuts in your own budget resolution, none of it take for. at the extras, at the expiring tax provisions that are gimmicks in this tax proposal because we know future congresses are going to be hard-pressed not to extend is out. then you're talking 2.3 trillion or 2.4 trillion worth of additional debt just when the timebomb is going off with no time to recover. that will be the end of the long-term solvency of social security and medicare. under your own budget resolution you've called for $1.5 trillion worth of cuts to medicare and medicaid. we know where you are going with this if we have exploding budget deficits facing us. that is unfortunately because of history is any guide then while there has been some time to recover from physical mistakes in the past, we have run out of time. not with the massive retirement
4:37 am
taking place today. i would ask my colleagues to consider that as we move forward. i yield back. >> you stated the 6% were in the upper half of income. the middle income quintile dollar.o 72,000, one the averages $67,832. do you think people with income over $56,000 are wealthy? that is, the middle income? do you think taxpayers for whom the mortgage interest reduction and the charitable deduction are still available likely will make around $56,000? let's get our numbers straight here. taxes would rise for many in the working class.
4:38 am
the analysis just came out at 3:30 five this afternoon. 28% of americans would receive a tax increase by 2027. i heard from a constituent today in my district named david who lives in new jersey. a governor christie fan. george washington bridge. david is a 50-year-old holding trades union worker who was injured in a car accident. you will get a lot of anecdotal stories. you cannot overcome those stories. injuries he can no longer work by collect pension and disability. his wife works for the post office. they have no children home and share the home with his elderly parents.
4:39 am
they currently rely on the medical expense deduction for his medical costs that can be upwards of $12,000 per year and they pay more than 50,000 in a pretty taxes. property taxes. they are able to just break even each year. if this bill passes, david and his family will lose the ability to deduct his high medical expenses. all of his state and local income and sales tax and a portion of his property taxes and the state of pennsylvania you can tax the local governments. your local tax, income tax. that adds up to more than $15,000 he can no longer deduct. only if this bill passes, he will have to move out of his wife until from his
4:40 am
she can retire. you are tearing families apart. of these stories. you're going to listen to them somehow someway over the next four days. why should these hard-working families have to make that choice? what kind of middle-class tax break did they just give me? this is garbage. it will burythis, me. not only will it hurt a family like this, it will affect home values. about highof hearing taxes of new jersey. we have a densely populated state. every state has a different culture. a different situation. like we are just throwing money out, just tax the people, throat into the hudson river. that is not what we do in the state of new jersey.
4:41 am
we are for from perfect but you better take a look at your own treasury. will remember what happened in 2008 1 home prices fell. go back to your history. you've not only don't know culture, you don't know history. we cannot afford to go through this again, especially because of self-inflicted wounds. is the perfect record. we are sending all kinds of money offshore. hasmuch, which corporation $250 billion sitting offshore? which has 93 billion sitting offshore. you tell me one place in this bill where you are going to catch those people. all of your talking is unbelievable. i know it is hard to keep up his you're changing it every day.
4:42 am
if you are changing and day, find that at least read what the heck to change. i yield back. >> thank you. mr. smith you are recognized to strike the last word. question.ve a previously, few minutes ago there was a rather vigorous criticism of the bill. passing it's a late in the year. in general, do the changes in or 2018,apply to 2017 the effective date. >> it is for the taxable year beginning after 2017. so it would be in effect 2018. theble place for that is capital investment provisions. that's not case, this would be onected on -- effective november 2. they have essentially effective dates as of several days ago,
4:43 am
and in a couple cases a couple of weeks ago. the purpose thing not to shut down and have some activity deliberate so that taxpayers can proceed with props making an investment with the knowledge that they would be maybe a stuff rather than war stuff. >> thank you. some would not take effect until -- january 20 18. greg so if the average taxpayer were planning for how they might so if the average taxpayer were planning probably might make investments they would not be caught unawares or anything because they would have the opportunity to put forth their spending accordingly. >> yes. most everything is perspective revised to reflect
4:44 am
the new standard tax bracket rates so that essentially there would be helpful wage earners in terms of what is withheld in meeting their income tax liabilities. ivory shake the fact that we have the opportunity to exchange ideas here. i hope we can truly focus on the real numbers that are out there. i have for various characterizations of a $250 tax deduction. not even a credit but somehow a deduction as being better, and actual true reduction in tax liability far exceeding. >> i hope we can keep the exchange of ideas going here and stick to the numbers we know are there and hopefully end up with
4:45 am
a much better policy than we have today because we owe the american people a much better policy than the broken tax code currently in place. i yield back. >> mr. howell, you are recognized to strike the last word. >> chairman, this is not a tax reform. this is a tax sham that in my opinion will leave a higher tax bill for people in my district. a special-interest bill that itses taxes on american and slashes mortgage deductions forcing the class families to pay more for help. it also creates a new tax for homeowners when they sell their homes. eliminates the widely used deduction for state and local taxes which means nearly every american homeowner well pay taxes on their taxes. district, 891,000 homes
4:46 am
claim that deduction for state taxes in the average deduction is $9,600 and mike district. this is not just an issue for new york but for others. states like illinois, california, new jersey. i know my good friend from new york is defending his vote on the budget resolution by some colleagues from the new york state voted against that. i guess they got in on wrong and the only ones who got it was mr. reid. mr. fatso, tenney, donovan, all voted no. republicans voted no on that resolution because of the provision of the elimination of deductibility of state and local taxes. they all got it wrong. the cruel irony is while we are chipping away to provide tax
4:47 am
cuts for corporations, the same corporations will still be allowed to keep their deduction for their state and their local tax bill. they get to keep a deduction but the poor slob middle-class guy or gal, they don't get to keep theirs. if homeownership is the american dream, this will is the american nightmare. don't take my word for it, ask your local real estate agent. the national association of realtors predict people with incomes between $50,000 and $250,000 will see a tax increase drop of upwell as a to 10% of their home values if this bill becomes law. areot just homeowners heard, renters get crushed, too. this bill weld eliminate a number of incentives to build affordable housing.
4:48 am
this will lead to a loss of more than 70,000 new, affordable housing units in new york city alone each year and many more nationwide. that if you think there is an affordable housing crisis in our country. people who want shelter, this raises the tax middle-class americans. families with more than one child under the age of 18 will see taxes increase. students will no longer be able to deduct student loan interest. this will cause america -- cost america almost $40 billion and affect almost 22,000 of my constituents. smallrs currently get a deduction for providing school supplies to their students. they're cutting a tax break for teachers. this wasn't just the trumpcare
4:49 am
bill that created a new age of taxes. this eliminates the tax credit to elderly and disabled seniors and repeals the medical expense deduction which helps people whose loved ones have alzheimer's or need to go to a nursing home. almost a thousand of my constituents will feel this in queens and the bronx. oneblicans keep saying only in three americans itemize, so you eliminated these middle-class provisions one affect that many people. here's a good one. why are they so -- in eliminating the tax on estates when that tax only hits two out of every 1000 americans. that is why the mcconnell special-interest tax bill allows united states won't create. they will reward companies largere by giving them a
4:50 am
tax break while they continue on their own 20% tax here stateside for the creation of those jobs. where do we think the jobs are one to go? they will continue to go offshore. overseas, 20% here. it goes on and on. i don't have time to tell all of the shams in this bill. >> you are recognized to strike the last word. >> to why mr. chairman. >> thank you chairman brady. today is historic as we consider comprehensive tax reform. for years, members of this committee in congress at made the case as to why america needs a fair tax code that will help with economic growth. that will help revitalize our economy and most importantly, create jobs and put more money in people's pockets. ohio families can't afford the
4:51 am
status will. cuts and ther tax jobs act, we keep them in mind. when i first came onto this committee, told you all a story. that story was about my dad. told me when i took my first automatic mcdonald's when i was a senior, we have a crazy tax code. you get taxed when you earn it, even taxed when you save it, and you get taxed when you die. know ii know you all will be leaving this great body sometime in january. it was not an easy decision, a large part because of the work we do on this committee and the members who do it. when i was selected to serve on this committee over 10 years ago
4:52 am
it was a great honor. ever since, i have been fighting for the priorities of the people of my district. ohio's 12th district. has been a great, remarkable, and yet humbly honored. it is here that we all, democrats and republicans, have the enormous responsibility to get things done for the people that we serve. issues like tax code. health care. social security. welfare. issues that americans go to bed andight thinking about thinking about when they are waking up the morning. code, strengthening medicare for america's seniors, supporting free and fair trade agreements. i am proud of the work that i've done to help the lives of everyday americans. to my colleagues, thank you.
4:53 am
i've enjoyed working with the smartest members of congress on both sides of the aisle. and, staff on both sides of the aisle who are the best and the brightest. i have also been fortunate enough over the years to build friendships on the other side of the. i won't mention any of you because i don't want you to get in trouble. eggs back -- except for bill the -- outo can kick of anybody. we don't have the same philosophies but i know he has my back and i have his. i am grateful for the service of all of us working together to find common ground. we have done that outside of today's debate on many issues, even know they are not always covered in the media and they
4:54 am
are not the biggest issues of the day but they are important to the men and women we serve. when i first learned on becoming a ways and means committee, i could not have asked for a better assignment. of course, our work is not done yet and i look into our continued discussion on this issue and there are other issues where to deal with it are very important in the month or two ahead. i look forward to working with you and it has been an honor working with you. i bless you. [applause] -- god bless you. [applause] [applause] >> let me just say, our
4:55 am
committee is a better place and our congress is a better place and the constituents of ohio are better served because you set in this seat. i think it is safe to say that pat has been a great friend and your description of the ways and means committee is perfect. because that is how the committee always felt. it is still the prime seat for deliberation. just to hear the witnesses today or any other time, the debate that goes back and forth. on a personal note, you a body that same immigrant experience that many of us have known. families that are only one or two generations off the bone. so congratulations on your next endeavor. >> mr. levin. word. me just add a
4:56 am
as weldiered on, i think know. there were many family matters that you had to contend with and all of us have tried to wish you thinkl as we could and i you and i had just a brief time keeping track of each other but i think all of us have the greatest respect for you and george determination to carry on challenges,r family so we will miss you. and, by the way, we will miss roots. your blue-collar >> mr. lewis is recognized. >> mr. chairman, shermantine
4:57 am
want to thank you for your friendship and for your years of service. when i had an opportunity to meet your lovely children on the floor, they were wonderful. they are beautiful. they are really in your image. and long before i ever dreamed of being chairman you always called me mr. chairman, and i called you mr. chairman. we are going to miss you but we know you're going to be here two days longer and maybe we can sort of get together and do something together. so, thank you. >> we will continue. and again, we will have plenty more time, mr. chairman.
4:58 am
let's express our love and admiration for you again. as i said, as mr. pastoral was hugging you and he will -- mr. mr. pascrell was hugging you. he will have to deny that someday. dr. davis, if you wish, you are recognized to strike the last word. asked you why mr. chairman. thankalways good to -- >> you, mr. chairman. it is always good. we are discussing in debating. of billions of dollars taken away from hard-working, struggling families. lining the pockets of corporate
4:59 am
special interests and the most wealthy and our country. real families will lose under this bill. exploding the deficit, this build triggers cuts next year. medicare, medicaid, other safety net programs as well as makes college costs increase. increases in student loan origination fees. making it difficult for those who have student debt to pay it .ff while corporate special interests can immediately write off all of their expenses individually in perpetuity tax benefits for their next net operating losses. while seniors will lose the ability to write off high ofical costs, victims
5:00 am
disaster will lose the ability to claim casualty losses. teachers lose the ability to write off the hundreds of dollars spent to help students learn. students lose the ability to write off student loans. adoptive families lose help with the high cost of adoption. new homeowners living in high-cost areas will lose vital assistance. and charities will lose key benefits that encourage taxpayers to give. while corporations can deduct their state and local taxes, this bill doubles taxes for ore than 40 million, middle-class households at a time when baby boomers are retiring and needing the most support.
5:01 am
they call the tax benefits to cover increased medical costs and the expenses of the elderly and disabled. government should help people, not harm them. government should strengthen the economic well-being of the middle class when wages have stagnated, not the most secure special interest and wealthy type in our country. the tax policy center estimates that the current plan will save and ttom 80% between $15 $450 in taxes per year. but it we those the top 1% an . erage of $129,000 a year it depives almost half of the individual tax cuts to households earning more than $500,000 and over 1/3 of the
5:02 am
households earning over $1 million. special interests reap 70% of the total tax cuts. the median income in my district is $54,000, not $500,000. though people in illinois and other places throughout the country will lose. the republican priorities in this bill are shameful. spending trillions for corporate interests when we should have been creating jobs by repairing our infrastructure and failing roads. we should be investing in rule nd urban areas to expand businesses. e should be making sure that
5:03 am
business developers can get incentives to reclaim communities and neighborhoods. no, i wish this bill was what it's not. i wish it was better. and as we work next throw, four, 10 days, hopefully we'll see some removal of changes so that i don't have to characterize it as the robin hood in reverse, taking from the poor to give to the rich, nd i yield back, mr. chairman. >> thank you. you're recognized for the last word. >> thank you, mr. chairman. it's interesting to listen to the debate and sort of tune in, and many people are very saturated in tax policy, and they listen to this, and then a lot of people who aren't saturated in tax policy would be listening to this discussion between these two sides and saying to themselves, they have
5:04 am
to be describing different things. there's no way that they can be describing the same thing. in thinking about it, my mind has turned to my wife elizabeth, who's an oil painter. living with an oil painter is a very interesting thing. i mean that in a good interesting way. because they tend to look at things holistically and in totality. oil painters don't look at one little narrow thing and say that's the whole painting. they step back and they do a creation, and you look at it in totality. so if you are going to be looking at anything in particular in isolation, that thing in isolation, you can say, wow, right, there's a group that's disadvantaged if that comes. but what we're proposing is not doing these things in isolation. what we're doing is saying, look, nobody likes what we have now. it's really interesting. nobody is defending the status quo.
5:05 am
and what we're proposing is to step back and say, if you could create a tax code for the entirety of someone's life, why don't you do that? rather than creating a tax code for different episodes in someone's life. so mr. smith's observation is a $250 tax deduction for something, is that better than a credit that's much bigger and much more robust and much more inclusive? no, obviously. the credit is better. and one of two things can't be true. it cannot be that he's right when he says everybody's taxes down and that his unabashed declare active statement based on the j.c.t. molingtsing, and then it cannot also be true that this is a raw deal for the middle class. so what i'm encouraging us to do is be real in this
5:06 am
discussion, and let's say lishedeats lock at these things in totality. let's resist the temptation to oversell, and let's resist the temptation to overcharacterize. but what we have now is an inflexion point basically. the inflexion is an opportunity for this committee to drive a national debate, really towards the transformational moment. and i would urge us time and time and time again when we observe these things and take up these amendments, let's discuss amendments in the coming days in the context of a larger, of a larger portrait, so to speak. i yield back. >> mr. chairman? >> thank you. i'd like to ask unanimous consent to have some letters from a couple of the cities that i represent and three of the counties that i represent who are the epicenter of the fires in california read into the record, asking that we fix
5:07 am
the problem we created in the bill regarding the casualty loss. >> just to be sure, since the public casualty losses will only cover wildfire losses, it can be itemized. i imagine a disaster relief plan, a tax relief plan from this city that allows people who have lost their homes to not have to itemize, so all of them get help. are they supporting my approach that allows everyone in those wildfires to get help for those who itemize? >> it sounds to me like your approach is not dissimilar to your amendment that we're going to see today, something that none of us have seen. we're going to get this thing drop in the last minute, and we're not going to have a chance to see it. that's part of the reason why you've heard from our side of the aisle that it would be nice to have a hearing on it. i understand, so this request is four letters related to restoring the property tax,
5:08 am
property casualty losses for ose who itemize and not to provide additional help? >> these letters, these letters re asking that we not be expunged from the law. >> to they also support help for them immediately for those who don't itemize, which is what i would encourage us to work together on in the wildfires? >> for some i've heard about it. has anybody else on the committee heard about that? >> you've never seen a disaster relief plan? >> not as it pertains to the fires. >> or the hurricane? my proposal is we help families in the wildfires as well. would you like work with me? >> is this the neil bill amendment about doing the permanent relief? >> no, sir, although those are three brilliant members. >> thank you. >> my question to you is, if you'd like to work together,
5:09 am
provide relief not just for those who itemize, those who don't, let's work together. >> well, of course i would, mr. chairman. >> without objected, the letters are approved. >> thank you. >> miss sanchez, you're recognized. >> thank you, mr. chairman. i feel like we should all agree that the tax code should reward companies that keep high wage and high skilled jobs right here in the united states. the type of jobs that support middle class families and the last thing that we want is for these kinds of jobs to be swept out of the u.s. by companies who are trying to gain the federal tax system. the republican plan that we're marking up today does nothing to close the tax loophole that is big businesses have exploited to ship job overseas and allow wall street billionaires to pay less than their fair share of taxes. i'm concerned the republican plan put forward today would incentivize big companies to outsource jobs and to create a
5:10 am
competitive disadvantage for small companies that can't move their productions outside of the u.s. i'm also concerned that it would encourage other countries that want to attract foreign investment to either lower their corporate rate, thus creating a race to the bottom, or create tax-free export processing zones. all of this at the same time that benefits to middle class americans are being slashed. forward, the plan in front of us today eliminates the state and local income tax deduction. since 1913, this deduction has allowed middle class families to avoid having their income tax doubled. in my district alone, that is over 85,000 families who may no longer be able to claim a deduction. of the millions of california families taking these state and local income tax deductions, more than 82% were families earning less than $200,000 in household income who rely on
5:11 am
the deductability to determine the affordability of their home. the average value of a deduction for a california ousehold is $18,438. priorityizing tax breaks for millionaires and enabling the outsourcing of u.s. jobs over helping the middle class and helping middle class americans is disgraceful. our hard-working american families don't expect a handout, but they do expect us to stop shifting the burden on to their backs. they expect us to work to grow u.s. jobs and opportunity without them having to hope, hope that a few of the crumbs will trickle down to them. american families deserve better than to be lied to. they deserve to know that what this fiasco of a tax plan gives with one hand, it eventually takes away with the other. they deserve a fair shot at getting ahead. they don't deserve to have the rug pulled out from under them.
5:12 am
this bill is nothing but a lie you continue to purport that -- they're the people that the american public wants to see pay their fair share. americans are sick and tired of having to scramble to get by because the wealthier continue to get wealthier, and they continue to get the bulk of the benefits from this republican bill and this bill congress. i urge my colleagues on the other side of the aisle, just be upfront about it. just tell the middle class, look, it's like poor people sitting down and having lunch that agree to split the bill in four ways. everybody is going to pay 25%. but guess what, we're going to allow multinational corporations to only pay 5%.
5:13 am
so where does that other missing 20% get taken out of it? it gets taken out of the highs of working class families and small businesses. enough of this farce that somehow we're going to grow our economy out of the debt that you're creating with this massive tax cut to the wealthiest of the wealthy. there is no evidence, and in fact, economic study after economic study shows the trickle down effect never trick else down to the people that need the help the most. so let's just be honest. this is a giveaway. this is so that you can run a victory lap and claim that you got one legislative accomplishment completed in a year of go it alone. let's freeze the democrats out. try all elected here to
5:14 am
to do what's right try to do what's right for the country. it would be really nice if i could see my colleagues on the other side of the aisle extend a hand to sit at the table and actually take our proposal seriously and to have a dialogue. but instead, you continue to persist in going it alone, and you're crafting policy that is bad for america. please, just be honest about that. i yield back the balance of my time. >> mr. higgins, you're recognized. >> thank you, mr. chairman. the elimination of the state and local tax deduction is a massive take for middle american, a major giveaway to corporate america. the deduction for state and local taxes was not a recently purchased loophole by a lobbyist. since 1913, there's been a federal income tax, and there's been a state and local deduction for that entire time, and that was put in place to protect local folks from excessive federal taxation. and for the record, in new
5:15 am
york, this deduction is worth 9% of taxable income. so if you make $100,000 a year, you lose $9,000. you make $50,000 a year, you lose $4,500. and all of this is being done to finance a cut in the corporate rate from 35% to 20%. first of all, nobody pays 35%. according to the congressional budget office, the effective orporate tax is about 18.6%. we're told this is being done to allow corporate america to boost the annual wages of people between $4,000 and $9,000 for the average household. that is absurd. so if that was really your objective, why don't you bypass
5:16 am
corporate america and just give workers a $4,000 to $9,000 tax benefit every year? because that will increase wages, which will increase demand, which will increase economic growth beyond the anemic 2% that we've experienced over the last decade. so let's bypass corporate america and give the break directly to the american workers. by the way, american businesses today -- and don't take my word for it -- today have $1.9 trillion in cash. sitting in u.s. treasury bonds. if they wanted to give workers a raise, they have the cash to do it without this huge tax bill, which is a huge giveaway to corporate america. and by the way, you have 150 american corporations, american
5:17 am
businesses, when say they noticed a tax cut from 35% to 20%. 150 of them paid between zero and 10% in corporate taxes every single year. in 50 of those american corporation, including wal-mart, including wells fargo that screw their customers, they have a negative tax liability, meaning that they get a rebate every year because of the loopholes that already exist. this is not tax reform. this is a tax scam. it's intended to take money from middle america and give it to corporate america unjustifiably. and there is not a credible, or a credible economist economic think tank that believes that this tax cut to corporate america will increase .2% a year.
5:18 am
tax cuts don't pay for themselves. they never have. not in human history. not in america. not in anywhere in the world. not one utterance in this bill bout financing infrastructure. which based on any objective analysis we need to spend about $2 trillion, right? the last budget proposes to spend $200 pillion over the next 10 years. we just spent almost $200 billion in the last 10 years rebuilding the roads and bridges of afghanistan and iraq. nations of 30 million respectively. and yet for a nation of over 300 million people, which could
5:19 am
materially increase the economic growth and put people to work, these jobs can't be outsourced. we're spending $200 billion a year. this whole process is a scam that will not produce the explicit objectives by the sponsors of this bill. i yield back. >> >> you're recognized for the last word. >> it does vex me that my friends on the other side of the aisle continue to say that this is a tax cut for the rich or that we're taking money from the middle class to give it to corporations, when, in fact, the joint committee on taxation says a tax cut for every quinn tile of individual americans. the tax foundation says this is a tax cut for every quinn tile of american individuals. the tax foundation says it will save the average family $1,100
5:20 am
and the average small business $3,000. and "the washington post" for god's sake, "the washington post" says that this will sult in a tax cut in every income category for 93.5% of americans. but, yeah, in the face of all this, they say there's no credible evidence that that will happen. that's pretty fascinating to me. guys, guess what. we've tried it your way. you said you had the congress and the white house for two years you did, and you piled on the taxes and you piled on the regulations. dodd frank and obamacare, and guess what. for the last eight years, we did not have one year where we reached our average growth in g.d.p. of 3%. not one year.r 3%.
5:21 am
tax foundation says that this plan will increase g.d.p. by .4%. we've had economists testify in this room,y heard estimates from .3% to .9%. if g.d.p. goes up by one point, we add trillions of dollars of revenue. we add millions of jobs. and we restore american opportunity. the last eight years of more taxes and more regulation have cost this country opportunity. we have left a generation of folks coming out of college behind because of your policies. enough's enough. we need to restore this land of opportunity. i am so proud of this bill. this stuff about, you know, this bill encourages companies to off shore, that is the exact
5:22 am
opposite of what this bill is designed to do. it cuts the corporate tax rate from 35%, which makes our companies not competitive which forces them off shore to 20%, which is competitive in the world, and it will bring american jobs back home. we need to focus on the facts here. and the facts are the american of the ave had enough more tax, more regulations, lftovers of the last administration. we want to move on to a competitive economy, a competitive government. we want our children and our grandchildren to have the same opportunities that we had. we want to restore the nickname of america as the land of opportunity, and this bill does that, and i'm proud to be
5:23 am
associated with it. r. chairman, i yield back. >> you're recognized to strike the last word. >> thank you, mr. chairman. mr. chairman, what a great opportunity we have here today to make real reform for real people. sadly, mr. chairman, this bill does not do that. it is clear to me, as i look over this bill, that we have our work cut out for us. the bill we have would negatively impact middle class families and families striving to get into the middle class by taking away their personal exemptions and leaving many with higher taxes. this bill negatively impacts businesses. it helps large businesses on the backs of small businesses by ensuring that the vast majority of pass-throughs will see no benefits of tax rate reductions. that's why it's propose bid the national federation of independent businesses. and this bill does nothing to address the skills gap that exists in our workforce. know so important that we
5:24 am
that future work is around the corner, and we're doing nothing, and this bill does nothing to help that. this bill would negatively impact communities as a former public finance attorney i can tell you that the base broadening measures in this bill would dry up the capital and business activity in our local communities. private activity bonds, 501-c bonds and municipal bonds advance for funding make capital improvement projects at the municipal level possible. the new market tax credit and the historic tax credit drives billions of dollars in private capital to economically challenge and distress communities. these are the building blocks of economic opportunity for main street america, main street alabama, main street texas. the current bill would do away with them, and that would severely impact their ability to encourage economic
5:25 am
development. so mr. chairman, i hope my colleagues view this markup as an opportunity to improve this scombill have the bipartisan input that the american people deserve. my republican colleagues should know that there is plenty of room to craft a bipartisan bill if the will is there. we share a sense that the current tax code is outdated and has structural deficiencies. on the individual side, our tax code is too complex. it doesn't do enough to support working families and does too much to exacerbate existing economic disparity. on the business side, the tax code dent -- doesn't do enough to make you're workers are prepared for future jobs. mr. speaker, i was really excited to be on this committee. i wanted to be on this committee because i wanted a seat at the table for the constituents of alabama that i represent. many of whom are zriving to be in the middle class. our tax code is supposed to be reflective of our values. the tax code does take winners
5:26 am
and losers. and mr. chairman, the winners in this bill are the top 1% of the wealthiest americans. multinational corporations will benefit, and wall street fat cats. the losers in this bill are working families, the middle class, homeowners, local municipalities, and hard working americans who strife to achieve the american dream. these are the people that i value, and i know that you do too. mr. chairman, i am sure you have heard the old adage, better to have a seat at the table than to be on the menu. well, mr. chairman, the people i represent are on the menu in this bill, and i cannot stand by and let it continue as long as i am on this committee. mr. chairman, the hard working folks i represent deserve nothing less than to have a seat at the table and to have their voices heard on tax reform. the way this bill was drafted under cover of night without
5:27 am
input from the democrats means that the table was reserved for republicans only. mr. chairman, i don't believe that that is what our founding fathers meant by this democracy. so mr. chairman, as i am closing, i think of what shirley chisholm, the first african-american elected to congress said, if they don't give you a seat at the table, bring a folding chair. mr. chairman, this is my folding chair, and i'm here to give a voice to people i represent. >> mr. smith, you're recognized. out of play strike the last word. thank you, mr. chairman. today is the day that we will rip out the broken tax code by its roots. this bill is about employees and businesses of all sizes. it's about wages and paychecks. it's about getting to keep more of what you earn, the hard
5:28 am
working taxpayers of southeast and south central missouri are being punished by the status quo, and they sent me to washington to make our tax code simpler, fairer, and flatter. the code isn't built for average, everyday americans, but with this bill we are cutting out handouts. we are taking those savings and reinvesting it in the paychecks of hard working missourians. in southeast and south central missouri, folks are being penalized because they don't have an army of lobbyists and special interests up here advocating for them. but today this committee is considering a bill that would help these hard working taxpayers keep more of their money. for families and couples, the first $24,000 you certain now tax-free. you get to keep it. you get to determine what's best to spend. the tax cut and jobs act is also going to help the family farm and small businesses by
5:29 am
eliminating the death tax. as a matter of principle, it's wrong for the government to tax someone for literally dying. folks spend their entire lives paying so many different taxes, it's common sense that taxes should be triggered when a profit is made, not when a death occurs in a family. this bill respects the family farm, not special interests. of this entire committee, families in my district have the second lowest median yearly income. i am for this bill, because i know it will represent a tax cut and pay increase to those same hard working families. in missouri, a small community of less than 1,000 people, a family of four will see their taxes cut by over 75%. families from jonathan or mountain view or any other community across south central and southeast missouri deserve to keep more of their hard-earned paychecks. this bill ensures that they
5:30 am
have more money in order to pay bills or save for the future. it is time to make the tax cut clearer, simpler, and fairer. it is time to close loopholes and end handouts. it is time to make our economy healthier and to see that more jobs are created. it is time to see wages rise again. it is time to give the hard working americans more money in their paychecks. with that, mr. chairman, let's get to work, and i yield back. >> you're recognized to strike the last word. >> thank you, mr. chairman. i believe mr. rice brought up "the washington post" a moment ago. i just would like to say there's an article up at the g.o.p. bill projected to hike taxes for many in the working class. i think we are having a very important conversation today. it seems leak the authors of this legislation actively decided to target the most visual amongs when they were searching to ways to pay for their corporate giveaways.
5:31 am
they targeted those without a loud voice in washington, d.c., adopted children, teachers, victims of long-term illnesses, young people trying to get a piece of the american dream struggling under the crippling burden of student debt. now we know why republicans have hidden this bill from the public for so long, because tax reform is hard. and it's even hard when her you go it alone, cooking up things in back rooms, out of the light of day, instead of bringing democrats and the public into the process to have this tough conversation together, not as partisan, but as americans. republicans have made the most cynical tradeoff, only hurting people who need the help the most. this is wrong. cash reform should be about coming together and making choices that reflect our consciences and our values, the values of the people that we represent. and i can tell you not a single
5:32 am
working mother working two jobs to put food on the table, not a teacher, not a family caring for an aging parent has ever told me that what tax reform means to them is corporate cuts. they know those have never trickled down to them like republicans have promised, like they promised in kansas. my constituents know there's nothing left but fumes by the time the trickle reaches their doorstep. and those fumes don't help them pay for medical expenses, college tuition, housing, or even the basic necessities that the people who wrote this plan clearly take for granted. my constituents have been reaching out to my office terrified about what this disastrous bill is going to mean for them, and i can tell you they know better than the idea that somehow a bigger standard deduction will be the answer to everything. the republican standard deduction is not an answer to a teacher buying school supplies,
5:33 am
paying for a mortgage and trying to put her kids through college while paying for her husband's expensive cancer treatments. it's not an answer to seniors on fixed incomes trying to pay for long-term carement it's not an answer to a young family just starting out and trying to buy their first home while covering the exorbitant cost of child care. the math simply doesn't add up. if you have to pay $90,000 a year for long-term care due to alzheimer's, what food is $1, 200 standard deduction? if you're working hard to pay both a mortgage and student loans and made financial decisions expecting to be able to deduct those interest payments, what good is a $12,000 standard deduction when you can deduct more today? my friends on the other side of the aisle can't answer these questions, and they've not answered the cries of the people in this country. people who are just looking for a little fairness and relief. instead, they vow to -- bow to
5:34 am
special interests and political expediency yet again, reflecting the very worst of washington, d.c. to the citizens who sent us here to represent them and to look out for their best interests. the supreme court justice, oliver wendall holmes jr. once said, "taxes are what we pay for civilized society." the purpose of the tax code is not to award political friends and sticking it to blue state voters who pay higher state and local taxes, rather, it's to fund a functioning government and support an environment where every middle class family can succeed, to fund a civilized society. this bill undercuts the very notion of a civilized society. it's morally bankrupt and an outright attack on the middle class, built on a foundation of supplies mischaracterizations t. is fiscally irresponsible raising the deficit by
5:35 am
trillions and putting it on the back of our children and our grandchildren, a short-term rush at the cost of long-term economic stability. i will not accept them, and based on what i'm hearing from my constituents, the american people will not accept it either. thank you, and i yield back. >> mr. holding? >> thank you, mr. chairman. i sat here today for four hours and 20 minutes. i've taken two breaks. i've heard my honorable colleagues on the other side of the aisle argue for the status quo over and over. they've tried to paint this bill as negative to avoid the reality that this is a much needed tax break for the middle class. under the bill we are marking up today, a family with two children making $59,000 per year will see their taxes cut by $1,182. when i look at the cat for my district in north carolina, the numbers tell a similar story.
5:36 am
maybe a little better story n. my district, the average family of four will see their taxes decrease by $2,335. and this is real money that belongs to the hard working constituents in my district that the government will not be taking from them, and they will keep in their pockets to use as they see fit. still not only allows my constituents to keep more of their paycheck, this will finally put us on the path to sustain economic growth. by lowering the corporate rate and moving towarder iter to the system, we begin to level the competitive playing field and end the lockout that has discouraged u.s. companies from reinventing, from reinvesting their foreign earnings in the united states. our bill also finally provides relief to u.s. small businesses by getting them out under the top corporate rate, allows them to pay lower tax on their business income.
5:37 am
this important provision that finally recognizes the importance of small businesses in america. for the first time our billly finally provides relief to small businesses and farmers in my district that have had to sell off parts of their farm or assets to pay a bill because of he death of a family member. honorable colleagues have 1% when they talk about the estate tax, but my constituents know this burdensome tax for what it is, it's an assault on american businesses and american farms and the hard working americans and north carolinians that would like to pass on to further generations of fruits of their labor without the tax they gain. they're glad to see it. i'm proud to have worked on this bill with my colleagues on this side of the aisle to provide much needed relief to my constituents and businesses in my district in north
5:38 am
carolina. i'm proud to support this bill, nd it will bring more than 29,000 jobs to the state of north carolina. i'm proud i did not have to sit here and defend a broken tax code, the status quo over and over and over again as my honorable colleagues on the other side of the aisle have been doing for five hours and 25 minutes. so with that, mr. chairman, i yield back. you're recognized to strike the last word. >> mr. chairman, we are supposed to be here to mark up a tax bill to benefit the middle class. but in reality, this is a bill whose main beneficiary are corporations. these aren't just my words. the only priority that president trump and republicans could agree on was that this bill must cut taxes on corporations. in fact, the middle class is
5:39 am
largely an afterthought. and even then most of the benefits intended for families are hypothetical, rooted in the already disproven theory of trickle down economics. under this bill, families will receive a credit of $300, but even that small credit will expire after five years. tax cuts for corporations, on the other hand, are permanent. let's look more at what the bill does. the largest tax cut goes to corporations. the largest of which are getting their taxes slashed by %.staggering 15% from 35% to but remember that the actual average effective corporate tax rate is 18.6% thanks to various deductions and loopholes. many deductions and loopholes which this bill preserves. so come tax time, corporations will be saving trillions, getting away with taxes far
5:40 am
below what is even specified here. now, let's take a look at what individuals get. well, it's not trillions, that's for sure. they certainly don't get to keep their deductions the way that corporations do. it's actually by ending the deductions used by families and individuals that republicans are able to pay for the tax cuts for corporations. for instance, individuals, especially in states like mine in california, have been able to dkt their state and local taxes for over a hundred years. it's part of their calculus in moving to a new neighborhood, buying a home, or voting on state and local budgets. in california, taxpayers have been able to take an average deduction of $18,400. but under this bill, they will lose that deduction. republicans are ending that for individuals, forcing them to pay higher taxes or accept a lower standard of living. it's not that republicans
5:41 am
question the value of that deduction, though, since they keep it for corporations, it's just families who foot this bill. another deduction that families lose just so that corporations can become wealthier are the deductions for medical expenses. so now, if you're sick, receiving care at home, have alzheimer's, cancer or parkinson's disease or have a child with a disability, all of that becomes unbearably expensive. also getting more expensive, your college degree thanks to a new tax on interest on college loans. if you took a loan to earn a degree, use that degree to land a job, and then responsibly budget it so that you can make payments on that loan, you're going to have to suddenly figure out how you're going could cover the cost of that loan. republicans are even turning to children in foster care as a means for paying for their tax cuts for the rich. it's like reaching into the couch cushions for loose
5:42 am
change. this bill ends the adoption tax credit, which was used to encourage adoption and make it more affordable. and why are these vulnerable foster care children being denied health? to give a break to children like paris hilton and ivanka trump through a repeal of the estate tax for estates of more than $5.5 million. among those being punish ready immigrants, people who come here to work and contribute, but republicans are making it harder for them to have the same opportunities by requiring a social security number for the earned income tax credit or the child tax credit. not even small businesses get the help they need from this tax bill. republicans are using this to lower the pass-through rate for small businesses to 25%, but that's all already what 90% of small businesses pay. the real explanation for the pass-through rate is, surprise, surprise, yet another way for
5:43 am
the rich to avoid taxes. when it was used in kansas, the wealthiest individuals suddenly reclassified themselves as small businesses, avoiding thousands of dollars in taxes. so corporations keep many of the deductions, while families and individuals lose theirs. corporations get permanent tax cuts, while families lose their credit after five years. this bill is about corporations first. when we talk about the cost, it's not just the cost in dollars, it's the cost in lies that are getting harder, with opportunities denied and families hurt. >> gentlelady yield back and recognized to strike the last word. this time we'll begin with amendments. i have an amendment. i'm going to recognize myself or the purpose of describing amends. clerk, distribute the amendment and we will suspend while the clerk distributes.
5:44 am
>> mr. chairman? this is your amendment? >> yes, sir. >> i suppose, because we haven't seen it or anything, don't know its contents, i should reserve a point of order, though i assume it's in order or you wouldn't have offered it, but i will reserve a point of order. >> thank you, point of order is reserved. clerk will distribute the amendment.
5:45 am
>> i would like to ask a question. >> what is the nature of the question? >> we're just reading this over . has there been any discussion of this with any of us on the democratic side? >> no. gentleman may seek recognition to speak on the amendment. >> well, i just --
5:46 am
>> you will have plenty of time to go over the basics fully tonight. i am pleased to offer this amendment, amendment in nature of substitute, the amendment makes modest refinements to the overall tax reform package that delivers tax relief to millions of families and helps our workers and job creators compete and win here at home and around the world. the amendment continues to the year 2022, exclusion from income from employer-provided dependent care assistance. this benefit, when coupled with the other tax relief provided in the bill, will help families cover these important expenses. the amendment includes additional tools that will help protect the integrity of the earned income tax credit program, an important program for an unfortunately the status quo creates too much fraud. with respect to the investment education, the amendment focuses its application in institutions with assets of at least $250,000 per student.
5:47 am
this ensures that private endowments are placed on equal footing with private foundations. the amendment ensures that other changes in the bill would not disturb the characterization for tax purposes of income earned by songwriters when they sell their catalogue of compositions. in addition to the substantial relief for small businesses in the base bill, the first time our pass-through businesses along main street have received significant tax relief, the amendment includes provision to ensure that employees of start-up companies can also share in the success of the business, helping to build a better aligning the recognition of stock-based compensation for tax burps. the amendment includes the provision that imposes some additional holding period requirement of three years with respect to gains on a carried interest in investment or real safe business.
5:48 am
finally, the amendment better tailors the bill to international base erosion rules to circumstances involved in the potential for tax avoidance. it narrows the focus to situations where the foreign affiliate has high returns. it also mitigates potential double taxation without relinquishing u.s. jurisdiction with captured tax benefits from profits. as the legislative process moves forward, we'll continue to work to ensure the international tax rules operate to appropriately protect u.s. tax base while making this the place in the world to hire, invest, and do business. more broadly, our work to fix americans' broken tax code will continue at every stage in the process. throughout the passage of this today from today's markup to present day. i'd like to reflect on what's not in this amendment and why we are not including various health tax related measures as part of our tax reform effort.
5:49 am
there's support on our side of the aisle for full repeal of the jobs killing and other taxes. it increased healthcare costs for consumers, that will include as part of obamacare in order to pay for massive new entitlements. however, as a ranking member and members on both sides of the aisle know, we've been working with them over the past month to find a path forward. we're working on common sense, temporary and targeted relief for many of these taxes to be acted on in the house before the end of the year. that includes priorities, relief from the medical device tax. the health insurance tax by numerous others, and the tax on .ver-the-counter medication as such, women move to these important health policies separately and immediately
5:50 am
after conclusion of our tax reform effort. i will also note that this is not the last effort we continue to make further improvements on the base bill. as we work to deliver more and targeted relief to small businesses, working with organizations, like others, and working to address unintended consequences, certainly insurance provisions and working with the council and others in that regard. at this point, does anyone wish to be heard on the amendment? >> mr. chairman, i think you would agree, or i hope you would agree, members on your side would agree, that given the fact that we have now just seen this for the first time, an amendment to a piece of legislation we just saw for the first time last thursday, this only compounds the clarification issue as it relates to the committee. is there a score on this particular amendment? >> no. as is tradition in the end
5:51 am
rules of the house and committee, scores are not provided on individual amendments. >> mr. chairman, i would hope -- >> but the base bill in the chairman's amendment, just to e clear, mr. neal, is within 1.5 trillion reconciliation the committee has been given. >> mr. chairman, i would hope we have an opportunity now to vet this issue perhaps with a recess for our side or giving us the opportunity to go through this or hear what others might have to say, or at the minimum, we would take questions from the questions on our side as they try to parse exactly what's being handed to us now after 5 1/2 hours of discussion about a previous piece of legislation. >> so just as the minority does not vet or deliver their amendments to us during this process, during the process, we take these amendments as they are offered, debate them and build on them at the conclusion. >> mr. chairman, if we had had the opportunity last thursday
5:52 am
to see this incorporated into the provision that was going to be presented to us, perhaps we could have a different discussion. but you can see the rush of anticipation in the audience, it was like a monsoon had gone down the middle as people rushed over to seek the document. and here we are receiving the document for the first time, so i hope there will be ample opportunity to air this document in front of everybody and our side to ask questions. >> absolutely. does the gentleman wish to continue to be heard on the amendment? >> i think mr. levin would like to address the issue and go right down regular order again. >> mr. chairman, i'll wait until -- >> mr. levin, you're recognized. strike the last word on the amendment. >> this is disgraceful. i've been on this committee now or 32 years.
5:53 am
when i came here, there was an ability to work across the aisle on many things. that was true of the tax reform bill the year before i joined, and mr. neal and i, and i don't know if anybody else participated one way or another in the discussion. this is the opposite of bipartisanship. we present amendments, it's one it e, one by one, and isn't a whole flock of changes to a bill that we don't see this until the last minute. this has been just the worst kind of process. you brag about this as the first time in three decades,
5:54 am
and you're going bring now these amendments up? how are we going to have a discussion? are we going to discuss each one of them one by one? are we? one by one, each of these? e we going to be able to ask questions as to each of these? i've been working on carried interest for many years, and my colleagues have been working on other aspects. we've been working on base erosion issues for a long time nd discussed these when he was brought up. and base erosion is vital to discuss. so now you just throw this at us without any discussion with r. neal or anybody else? are you people essentially authoritarians? are you authoritarians and you just throw this down to us? this is utter disgrace.
5:55 am
don't you have enough confidence in your own position to present these in advance to us and let us discuss each and every one of them separately? you're smiling. yeah, you should stop smiling. this is more serious than that. >> the gentleman yield. so, as chairman of this committee, former chairman, you know the process of amendments. and in the minority, you routinely on every bill offered amendments not by giving it to us in advance or letting us look at it, but in the amendment process. >> take back, nonsense. >> no, that isn't nonsense. >> nonsense on the a.c.a. bill -- >> you delivered a bill of -- >> i believe the time is mr. levin's, mr. chairman. >> didn't the gentleman yield? >> look, the a.c.a. process was very different. you didn't like the bill, but
5:56 am
we didn't throw these things at you. we had hearings. we had meetings. we considered this seriously. you didn't like what we were going to do, but we didn't just throw things at you at the very end. you had yts of what was just nonsense. you had ideas what was in the bill all along. and now you just throw this at us, and you need introduce each one of these separately and ask, so we can ask questions about each of these. you make a mockery out of this committee. a mockery. and you know it. you make a mockery out of this committee. and why are you doing this? why are you doing this? you don't even talk to mr. neal and to ranking member and give this to him a day in advance. what are you afraid of? you're determined to pass -- i
5:57 am
haven't finished. >> the gentleman controls the time. >> you're determined to pass a bill because you haven't done anything of importance all this year. you are desperately looking for something to pass. and it's the blind leading the blind. i don't know who the pied piper is, whether it's you or it's the speaker, but this is a disgrace to this committee, mr. chairman. so let me ask you, i'll yield, are you going to have each of these amendments taken up separately? you know each of these amend ams, as by rules, and by custom, will be offered, and during your five minutes, you will have the chance to question this or request each amendment is ours, yes, sir. >> so each of these will be offered separately? > no, this is the amendment. we will debate this amendment. this is a separate amendment.
5:58 am
>> with all of these pieces? >> yes, with several provisions in them. >> why not take them up separately? each of us have time to discuss . >> your time has expired. >> this is a total disgrace. >> i know this is the moment where the outrage is supposed to occur. >> no, it isn't. >> in the process. >> i ask -- i ask that your remarks being taken down. >> oh, for heaven's sake. >> no, i'm serious. i didn't question your -- i did not. i did not. >> i think that would be -- >> i asked that your words be repeated. >> mr. chairman, i request that mr. levin's remarks being taken down. >> i'll be glad. i will be glad to. >> thank you. >> all right, let's do this. >> ski that your words be taken down. >> mr. levin, if i may, so we can go into the -- all of that if you want, or, as you know, as the former chairman, and as has been occurring throughout
5:59 am
this session as well, minority often offer amend ams, multiple provisions, lengthy amendments, without our being able to see it in advance. >> one at a time. >> no, sir. >> yeah, we haven't -- >> yes, you have. >> the most critical bills that we have. >> yes, you have. my point is this. we will take up this amendment. we will have plenty of time to question. we will go through this whole line. over the next hour or more we will have the opportunity to delve in. does anyone else wish to be recognized? consider it a recess so we'd might come up with a strategy as to our response? >> no. we will follow the rules of the committee. we will continue with this amendment.
6:00 am
this procedure has ramifications. we need an opportunity to digest what our response might he. but that is not provided when you offer your amendment. you are expected to digest it, ask questions, speak out and ultimately vote. we will continue to treat both forward.ally going some of these amendments, i know you will not like. just as we will be seeing your amendments later. we will ask questions and speak out but we will do it equally between the majority in the minority is the committee roles require. strike the last word. >> recognize.
6:01 am
>> ideal my time. >> thank you. it has become very clear that this hearing, this marker, is not about tax reform. it is about a political life preserver. totally outedure is of order. we were presented with the final version of 425 pages of changes andomplex tax law on friday now we are given an additional -- what is it, 30 plus pages? 33 pages to be precise of changes to that amendment. we have no estimate what these changes will cost. they are bundled together in a fashion that is not consistent with the operation of this committee. , if required, particularly
6:02 am
on international roles, sometime to evaluate how those intersect in the bill.sions one has to wonder of mr. harry cohen as the lead person at the white house had a hand in the development of these provisions. since we have been meeting, additional information has come out about hundreds of millions of dollars that are being handled in offshore accounts throughout the islands of the and inc in the caribbean some cases there will be no tax charges on them at all. slightest change in these international rules, which are included here, it is not possible without some review and some review by people who may have more expertise and understanding of the tax rolls and regulations than some of the
6:03 am
members of the committee and review andunity to do an independent evaluation of some of this. it is clear the majority does not feel they can pass their legislation by following the that thiscedure and amendment as nothing more than a series of patches to try to secure some additional support. these erosion roles may be nothing more than more erosion. what we need to do is be able to evaluate those hands we are not even accommodated with a few minutes to discuss and review and look at the intersection between these pages and the pages we were so recently presented. on the carried interest issue for example, the chairman position has been in the original view -- and this is one of the few parts of the bundle we can analyze -- to have a
6:04 am
holding time of one year is sufficient. now apparently in this he has reported that provision by extending it all the way to three years. he only problem with that is that most that i am familiar with and with some great ones from texas, extend for 10 years or more. so apparently this is nothing i something to protect carried interest. a loophole and a special provision that some hedge fund managers have for an opportunity to pay much less for taxes then other people pay. this is the very loophole that president trump as a candidate promised he would pay. eliminate. and instead of eliminating it first they had a one-year holding time and now they have expanded it with a broader facade and a way that will not have carried interest.
6:05 am
i analysis, even the joint tax committee of this amendment, we could determine whether or not it represented any genuine change. there are a host of other provisions worthy of further perhapsation but it is the coalition we afford a few times a few minutes ago with lots of questions for mr. thompson that something might be done about disaster relief. i don't see that anywhere in these 33 pages. i must say i shared your concern that we were providing relief one week and taking it away a few weeks later. you are told, don't worry, there is help coming up down the road. well it is not in these pages. is expired.'s time
6:06 am
i would ask you have the last word. >> you are recognized to strike the last word. >> so whether it is disaster weief or other provisions, consider this bill does nothing about the adoption tax credit. the provisions in the original 425 pages had the effect of taking way over the course of $2 bill a little more than million from the teachers of america, teachers who were in schools that have been hard-pressed by reduced budgets and to bring their own supplies to the classroom and are currently entitled to deduct up to $500. the response to that provision allour law is the same for of those teachers and there are thousands of them that take the 500 reduction and probably
6:07 am
contribute much more than $500 to enrich their classrooms. longer available. there is no commitment to supporting our teachers across america and reaching classrooms. i remember when my wife was a first grade teacher. it seemed that every new school, we had a truck load of new materials to take back to the classroom. in texas i find that same experience. what is wrong with giving those teachers of $500 deduction what many of them are spending far more than that for their classroom. i heard them talk about, they are going to give the money back to the people who keep in and we can make it chase -- choice with what we want to do with our money. i think there are people in california who had their homes are down on their chores i they can use it to rebuild their home or they can
6:08 am
abandon their home. that is their choice. the student who has a significant amount of student debt who will now be denied the right to deduct the interest on that student debt. muchstudent does not have of a choice. the bank is not giving him a choice to not take the interest on the debt. the question is whether or not we will encourage the students and recognizes is a time in america when the burden of student debt is even affecting students who either have their there is or remains they provided help to children or grandchildren, they have huge amounts of debt, they need to be able to deduct the interest on that debt. you can go down one provision after another and see that relief is not imparted. i will yield to the gentleman from michigan. right you know, when you go down this list you can see lobbyists at work.
6:09 am
>> carried interest is just one example when you look at each of these. you talk about special interest and you want to read the code of special interest. thank you for yielding. all of us on the democratic side can just look through these and just see what lobbyist has been in to see you guys. >> i think a little bit earlier in the debate in response to a question about mr. larson finding out the details of what is in this amendment, he was told by the chairman quote -- the gentleman can review the amendment when it is offered." it is clear it has been offered by many people. certainly, the members of the committee have not been a part of the courtesy even on issues of which they are keenly involved looking at the bundle of provisions.
6:10 am
we know many of the issues that have been raised by our colleagues this afternoon as improvements they have not been considered or included. all of this, whatever has been added here has of course been added with borrowed money. to the extent this involves additional cost it is being borrowed and added to the $2.3 trillion, not billion, trillion dollars. there is suggestion there is some new savings from moving from a chain cpi. that is nothing but a president for weakening social security. they want to do it here so they can come back to our social security recipients who sees a little coming in january. this will be the president set for saying to them, they don't even get a little bit of the cost of living increase they get
6:11 am
now. i would urge my colleagues to in rejecting the conditions of this committee. >> you are recognized to strike the last word on the amendment. >> thank you mr. chairman. i want to go back to what my colleagues said. i take exception. there are a number of things i know you have done looking to the members here. i can tell you in section 1104 and section 1105 as part of this amendment was a lot of work between myself and the commissioner and your staff which really addresses and -- which really addresses and proper payments. unfortunately we know this program is riddled with fraud
6:12 am
and error and a 2016 report from the treasury inspector general said one or more payments were improper, leaving 16 million annually. it seeks to address this issue in a variety of ways. i want to thank you for listening not only to me but as i look through this, there are a number of issues that you have also been working on that are also included in this. i know my colleagues have been talking about. i think it is important to know, i think you heard the chairman say, if you have issues you're concerned about you should bring them to the chairman. this is a document that appears to show the chairman is listening to members of this committee that of gone to him and asked him for certain things and also the business community as well. because as i went through this as you are spending your last 10 minutes talking, there are issues i know the business thinking about and
6:13 am
there is movement to a better place i want to thank you mr. chairman for listening. to getyou will remember this to a place where it is a better bill and the end. to make sure it grows and >> will be gentleman yield? >> i will. >> this is an area you have worked on. we help people get from welfare prayingand get better jobs. we retain that commitment. if i remember correctly from our long discussions, these provisions make sure the dollars go to those families. a great deal unfortunately of hard-working families who spend their money for this.t eligible
6:14 am
your provision says, your tax dollars will not be wasted. all of the work of dented the year will actually go to the people, the families we are trying to help move from welfare to work. they are trying to help themselves go from welfare to work. these provisions addresses directly, correct? >> they do. again, i for shake your time and effort because this make sure those dollars are going into the right hands. and i appreciate it. again, a number of issues in this amendment also go to members. thank you and i yelled back. are recognized to strike the last word on the amendment. >> i would like to strike the last word. you know, we came into this hearing today and we heard from you, mr. chairman, about the great history and tradition of this wonderful to midi and i think everybody here would tell you that we all work really hard to get on this committee for that very reason.
6:15 am
this committee deals with some of the most important and the weightiest issues that faced our constituents and the american people. then we proceeded after all the lofty talk, we proceeded to talk about a bill that none of us had last friday.until today, we start a markup on it and as was pointed out by a number, without any witnesses, without any hearings, we're going to mark this bill up and russia through and one week. we are want to change the tax law significantly and as also was pointed out, changes that have not been made, issues that have not been done within 30 years and we are going to russia through to be done by noon on thursday. -- rush it through to get it on by noon on thursday. and we will work right around
6:16 am
the clock to do this. my expenses been met whenever you work right around the clock to rush things through, you do not get the best public policy and the constituents we represent other one said suffer. anyone watching this hearing on broadcast, i am assuming they probably get the idea. they might confuse the that is don't want to use the terms by others, but they might get the idea that this process is a crooked process. they might get the idea this process is rigged. a rigged, crooked process. was it rigged against? it is rigged against the very american that we represented. that we were elected to represent in congress.
6:17 am
so then after five hours or however long it has been, six hours of going over a bill we did not see until friday, now dropped in our lap is another group of amendments that are pretty thick and themselves to deal with issues we are told is going to improve this bill. we have not had time to analyze them. we do not even know what questions to ask as to what these amendments do. i raised the issue of disaster assistance for the people in my burned out ofrk their houses and homes and that the the future rest of you represent to blowing experience disasters were told the chairman is going to work with us. i look through here, i do not see any reference to these folks. is this going to be in the next package of the amendments dropped and our lap in the 11th
6:18 am
hour? the ability to deduct state and local taxes? mr. larson pointed out, is it really going to cause donor states such as california that i represent who send more money to washington, d.c., then we get in a lot of districts. the state-local tax deduction provision is going to exacerbate that. towill be sending more money washington. the student loans, you know -- this is a real denigration of the process and of this historic committee that everyone wants spoke so laudatory only about. forget, this is going to ride to the 2.4 trillion dollars that the underlying bill is already going to charge to our children and grandchildren. we are going to grow the now plusdebt by 2.3
6:19 am
this. we have heard from folks on the other side of the house that said, you know the debt is not the issue. you're right. it is not. some of us have been working on for a long time and there is one role that we should all think about. that is, when you find yourself in your hole, keep digging. we are in a debt hole. we at 2.3 trillion to it for the first six hours and now who knows how much more with this bunch of amendments that none of us have seen and we do not have time to analyze or figure out where it is going. this is a bad way to make law. this is a bad way to treat this very, very important committee. i yield back the balance of my time. >> the admin's time is expired. mr. smith, you are recognized. you fort to thank
6:20 am
adding this amendment on page five. something extremely important to hard-working american families. this is child deduction. this is something i would think no one on this committee would want to vote against. this helps working families where it will provide tax free their childcare and adult care. adult care, dependent care services. i just want to applaud you, mr. german, for adding that your amendment and i would urge the entire committee to support this. >> the gentleman yields. >> i yield the remaining time to mr. rice. >> thank you for you and others speaking about the force of yearnuing up to $5,000 per employer which helps in combination with the aw family credit which is
6:21 am
dramatically larger account. for the first time both parents get a credit as well is that college kid or that parent who is moved back in. it is a commitment to make sure we help families move forward. i want to thank you for your work and others. >> to me as well. >> mr. smith, if you would like to yield. >> yes, i yield remaining time. the concernand about constituency suffered so badly by the fire in hell 40. how go out to them. >> our -- i understand the concern about the constituency who suffered so badly the fires in california. our hearts go out to them. they are still entitled to itemize this year the deductions and losses they incurred this year and these terrible buyers.
6:22 am
>> will be jim and yield? are eggs i will. >> thank you for the folks who lost their homes. -- will the gentleman yield? >> i will. >> thank you for the folks who lost their homes. and tired neighborhoods were burned -- entire neighborhoods were burned to the ground. do you really think we can exist -- assess all of the costs in the time it takes to make this amendment? >> it does not have to happen. the loss was incurred in this tax year. the deduction occurred in this tax year. they will be able to climb and on the tax return they claim forward this year. i yield back. >> thank you for clarifying. strike the last
6:23 am
word. the amendment does not include any modification to the state and local taxes. is that correct? greg this amendment would not include that. >> this amendment would not include that. >> one pleaded with me and said, come on let's be rational about this. this is only a 6% increase. i submitted what the state of connecticut commissioner of revenue sources stated. 41% of the residents of the state of connecticut itemize their accounts. mr. barthold, how does that stack up when the other side says -- who was right? is the commissioner wrong in connecticut?
6:24 am
dogs under present law, as reported, about 30% of tax filing units nationwide itemize. words has joined tax of been able to do any analysis on those states where there are significant eilers and there are many who itemize deductions. the difference between those dates and states that do not? >> the joint committee has not analyze. greg said that has not. that is why there is misrepresentation taking place. facts, and you wonder why we are absent, the actual fact, if any of your constituents were being 41% ofed, double taxed, the filers, you would not be angry i guess? i guess you would say, let's be rational about
6:25 am
this. let's have some more expert witnesses. there have been no expert witnesses. there has been no opportunity from anyone from the state of connecticut. any expert as it relates to what the impact of this bill will do, or this amendment for this matter, to the citizens of the state of connecticut so we have to rely and they are still reading it, as they say, on what they expect this impact will be. the impact is devastating on those individuals. we should have had an opportunity to hear this out. but no, we did not. this has an impact on 100%, 100% of our economy. colleague has said, what you are witnessing here is a shift. i heard people on the other side
6:26 am
talk glowingly about how this will benefit their district. i am sure it is. it is probably going to help your district. who pays for that? the citizens of my district. california,dy like massachusetts, donor states. we give more to the federal government then we ever get back. we are proud of that. we are proud to be able to bring to aid to houston. we are proud to do this because we are americans. yet today, to your fellow americans, you do not even give us the opportunity or the courtesy to stand up for the people who are going to be double-taxed for this. they do not even get a chance to speak out. >> i spoke about you while you were out of the room saying, how could this be true.
6:27 am
surely the commissioner of revenue services in the state of connecticut is not lying about the fact that 41% of its residents pay this. of course he is not. that is not the fact. today asoing on here has been pointed out is most unfortunate giving the fact that i regard the chairman of this committee and all of this members of honorable, decent people. and sometimes even honorable people are called upon to do political things for expediency. and it comes at the expense of someone and in this case it is the very citizens i represent in my state and that is why we are so angry about it about what is happening to these taxpayers. these republicans, independents, and fellow americans across this country with the actions taking place in this committee.
6:28 am
i yield back. >> you are recognized to strike the last word on the amendment. chairman, sorry. i want to thank you, first of all, for this amendment. the statement was made by my colleagues on the other side of the aisle that this was a product of lobbyists. i am looking through the list of can'this includes and i remember a single lobbyist talking to me about any of these. the change to carried interest makes it harder to claim carried interest. it makes it harder to claim carried interest as income. i worked literally hundreds of hours on the family tax credit $5,000 costthe exclusion. i am thrilled to see that reinstated in this amendment.
6:29 am
this is for families who can barely make ends meet who want to include their income so they can use it to help pay for child care cost. i have the highest average rate of working moms. do know what my average rate is? 50,000 dollars. do you think they're they are doing it because they won a little bit extra spending money? no. in south dakota we pay double .he average energy cost winters are cold. summers are hot. it is a long way to drive anywhere. a provision in here will help them pay bills, take care of their kids, go to work, and maybe take a weekend when they can go somewhere fun with their kids. you listeningn, to mothers and fathers trying to get by and saying, you know what? i know my colleagues on the other side of the aisle think the government makes better decisions for taxpayer money. i do not believe that.
6:30 am
i believe the taxpayers work hard and make it or decisions with their money for their families and that is the difference between the ideology between the two sides. i believe they can put this money back into their pocket and spend it to best provide for will family and now we show will help the economy create jobs and raise incomes. this tax package, we will have paychecks larger for these families. they will be larger because it will put more money in their paychecks they can use for their families. so mr. chairman i want to thank you for putting this substitute amendment together because it meets the need and i do not see one that lobbyists would get a win on any of these. these look like one sitter adding integrity to the bill and i appreciate the effort on it, especially as someone who just spent a lot of time making sure working families are getting some relief in the economy we have had to live under in the
6:31 am
last years. with that, i yield back. >> i ask that this letter be put in the record from the county of black lake, supervisor district one on the provision i have talked about a number times. rights without objection. >> mr. khan your, -- mr. khan -- mr.ou are recognized conyer, you are recognized to strike the last word. 33 pages, a lot of complexity a lot of changes in the tax code which is pretty hard to decipher. just to give the viewing audience a sample of what i am talking about, it was just stated that the chairman was listening to the moms and dads let's go to page 28 of the amendment starting on page one. this is what it says. induction allowable under
6:32 am
subsection c, subparagraph b, such amounts. page 37 the two, line 12, strike and insert subsection subparagraph two, subparagraph c-h or sub paragraph five. see page 76. straight lines 3-7 and insert paragraph one,- commodities grossing, commodities grossing could be met any income wealth income from the disposition of commodities extracted by such corporation or partnership or subparagraph b. gross income of such corporation with the disposition of property which gives rise to income described in subparagraph a. and insert thee following, subparagraph c, corporation shall be allotted a deduction in the taxable year aeferred to in subparagraph equal to the product of subset
6:33 am
i, the sum of 104% plus the annual federal short-term rate determined under subparagraph e graph -- for the last month could goth the -- i on. i think, other than mr. barthold none of us have a clue what i read here in this committee or the complexity of this and this is certainly not something moms and dads in wisconsin were lobbing the chairman to get included. this smacks of powerful special interests in washington showing up on your doorstep asking for special simplification. this is anything but simplification of the tax code. we will be having more volumes of rules and regulations because of the complexity of this language.
6:34 am
this committee has not had the opportunity to vet it or get into it in any detail and have no idea what it means and who will benefit and what the budgetary implication will be. i doubt that any of it is meant to pay for the 2.3 three dollars worth of deficits this is going to add. my sense of reviewing it is that it is going to add to the debt at the end of the day rather than decrease it. this is what was presented to us literally minutes ago on the day of our first markup. we should be demanding a lot from thisformance committee as far as changing a tax code that is going to have an effect on every living person in this country, including businesses large and small. and set of this, without any chance to review it, without any hearings, without any feedback. we're supposed to be making a reasonable judgment within a matter of days whether or not to report this on not out of committee and send it to the
6:35 am
house floor by next week. and there are colleagues not even on this committee you of not lived in this world of taxes and tax policy ramifications because they are going to be asked next week. they have to make a reasonable judgment of whether or not this makes sense for the future of our country. i submit there is not one of us, recent members of our committee, who can make that judgment even if we can ask questions about. one thing i did not notice, mr. chairman, maybe you can clarify for me but did you include in your nature of a substitute hearing amendment retaining the work opportunity for tax credits which is given in to businesses large and small if they hire veterans and their workforce? because i did not see that. under the original bill, that is currently being repealed and i do not see that being restored. it am i correct? christ is the gentleman yield? >> as the member knows, we often get these exact amendment from
6:36 am
you on what we do not understand, we query either mr. barthold or the witness in front of us about what exactly does is amendment do. we have the same opportunity to do that were that is not my question, my question is whether it is being restored. underlying legislation. >> mr. barthold, does that include it in this amendment? >> a work opportunity tax credit is not imminent. i asked to be clear, that is a tax write it for businesses that have a preference for hiring veterans. >> do you yield back? >> strike the last word. >> last word. >> mr. chairman, i want to thank you for providing in this amendment for the songwriters.
6:37 am
the songwriters in particular in as muchicult time as what they create is now being stolen over the internet and their income for their product is not like something you would make him put it in a store where store tould go to a buy. their product is over the internet and that is another situation we will have to look at two make sure we continue to keep the talent that for some years has given us great entertainment. some already paying income tax or self-employment tax. when a songwriters cells their catalog for their future earnings, they are again taxed personal income rate and pay income tax again so really it is a double taxation for them. 2000 six, the songwriters capital gains tax equity act was put into place and it was actually supported by members on both sides of the
6:38 am
eye. it was a bipartisan support from both the house and the senate from the cosponsors. literally, there was no opposition through this legislative process and so changing this back again would be devastating for our songwriters. so i appreciate following what has been the tradition for them and replacing once again what was taken out of the code. but this back in to make sure that our songwriters out an opportunity to be able to create and continue to earn a living on their creations. so, thank you for that. i would like to yield the balance of my time to miss rice. >> thank you. mr. barthold, in addition to the saying thaton people up and down the income spectrum will get a tax refund and the washington post saying that people up and down the income spectrum will get a tax
6:39 am
refund and your computation of the same thing, when you computed the fact that all these people are going to get refunds, did you take into account that the state and local income tax deduction would be repealed? >> yes, mr. rice. >> you did? wait, even after the state and local deductions being repealed, people of every income quintile were going to get a tax refund? >> let me ever size again, we were reporting average effects. we accounted for every provision .n the underlying legislation >> did you exclude people from connecticut when you came up our that computation? >> sample is based on a national youle and i could not tell how many people from connecticut
6:40 am
were represented because the ideas to reflect -- >> will the gentleman yield? >> so, even after state and local, i just need to reemphasize very clearly. >> once we repealed state and taxes, people across the country, and every income or tile will be at the tax refund. they will pay less taxes. they will pay less taxes. >> the debt is negative in each income category. back.nk you, sir, i yield >> time is expired. strike the last word on the amendment. >> mr. chairman. how does this amendment affect the earnings of tax credit? you.ank
6:41 am
the, the amendment with regard to the earned income tax credit does not modify any provision of the underlying legislation. rather, it introduces some procedures to try and reduce improper claims of the earned income. >> can you explain those procedures briefly, please? writes yes. for example, the proposal limits earned income for purposes of the income tax credit to the amount substantiated by the taxpayer on statements that are either furnished in the taxpayer third-partyiled by recording requirements substantiated by the taxpayers on books and records. that is one example. >> so, in other words, we're not moving money here in any manner, shape, or form. we are just adding a condition upon which that person would have to come forward with so that that person would check to see if there eligible.
6:42 am
>> it would be more the case that they would have to be sure they could verify. >> why is this being done? in order to stop quote unquote fraud? is that why we're doing? >> the effect of the proposal, i cannot tell you the underlying rationale but there has been concern about fraud in the earned income tax credit. >> had you explain this? has put forth information about this quote unquote fraud -- most of it is not fraud. most of it is a mistake or a mistake in the miss filing. this people have to file all over again in terms of the
6:43 am
ati's. you know how important this is in many parts of the united states of america. so, you know how much money is involved. you know that is what keeps people working. tuesdayem an sentence on the job. if we have done this in puerto rico we would have not have had to listen to the president about what is wrong with puerto rico. so let me ask you this, mr. barthold. if the fraud has not been crs, why are we doing this? in comparison to what else is in this particular amendment. when did you get this amendment? mr. chairman? >> if the gentleman would yield i can explain this amendment if you like. >> i am talking to mr. brady. mr. brady? >> for what purpose?
6:44 am
>> i said, when did your side get this amendment? >> at this time. words, -- just as when you propose amendments, you show to all parties at the same time then we begin the questioning and debate. >> so another words, your membership did not discuss is with you before? >>'s is was delivered to all members at the same time. >> down answer the question directly, i understand that. >> we're not talking about fraud here. we're not talking about fraud. the washington post article said he came out of three: already. we are talking about those corporations that have money offshore. beginning with apple. all the way down . $240 billion. they manipulated the system. an fact, there does not seem to be anything illegal about what they did. on face value.
6:45 am
we are not examining it. not yet. >> there seems to be nothing wrong with that. we're not concerned about billions. we are concerned about joe on main street, who made a mistake in his application in terms of proving his particular condition that he was working and the sheet he had to fill out. that is who we are concerned about. if we are off the wall, nobody is. if we do not get our priorities straight, the country will be even further off the wall. zeroing in on front that does not exist, just like we did with the voting. now we are not talking about any of the deals with those corporations who are not paying their fair share. i am not done. >> mr. chairman -- >> do not interrupt me --
6:46 am
>> you is a matter of want to go to moscow, go to moscow -- >> your time has expired. thisks continue on amendment. mystery, do you wish to strike the last word #>> gentleman is recognized. thank you mr. chairman. we have set here now for six hours. my colleagues on the other side of the aisle are claiming this is all done at the last minute. everything is being dropped on us. we don't know anything about. give yourselves a little bit more credit. on thisyou have been committee more than i have been alive, for pete's sake. you know tax policy. laughter] >> are you going to take down his words? laughter] >> i appreciate that. we brought some levity back to
6:47 am
our chamber. we do have a good relationship across the aisle. you know tax policy. you have been on this committee, you indicated you for tarred to be on this committee at this moment to debate this important issue of tax reform. i will remind my colleagues as and theon our side other side, we have focused on tax reform. we had chairman dave camp put out an entire rewrite of this bill. we had numerous hearings and meetings on the rewrite of the tax code from the bottom up approach. the debate we are having today has been held for year after year after year. so when you get this amendment here today, i am very confident. , you know international taxation. youerosion. i have watched you have conversations on the floor and debate these issues.
6:48 am
i know others have had the issues of state and local deductions discussed ad nauseam. >> it is not this bill, though. not this bill being recommended. >> i will not yield. to claim to the american people that somehow you are not capable or we are cramming this information through is just not accurate, ladies and gentlemen. we've had this debate 31 years in the making since the last time tax reform was done. this is the product of those 31 years. we are taking steps today to reform this code so that folks represent, and i have heard lengthy debate where you argued whether or not middle-class folks, hard-working folks, are going to get a tax break.
6:49 am
and the facts remain i have run the numbers for my district. calculations for different families of four, single mothers, seniors, i have done the homework. i come back to one conclusion each and every time. tables mr. barthold's recognize. there are tax cuts being proposed in this legislation which mean those hard-working people that we all represent, it is indisputable, are going to be a keep more of their money as a result of this tax reform bill. us living31 years of under this broken american taxco, we are watching our frommy being decimated within. we're not competing on the international stage. we are losing american businesses and industries because we cannot compete because our code is so old. when the code was written in
6:50 am
1986, no one even about the internet. no wonder about the digital economy. we have to update the code so we stage.pete on the world i am looking at the proposed amendments here that the chairman has put forward. we are going to continue to the debate as we go through this of the next four days. we will have debate with the senate bill. we will have debate on the floor. we will debate as we go to the finish line and i'm confident we'll be able to the bill as we go through it the end of the day, what we are doing here is not something that we do not know what is going on. we've been working on this for a long time and i want to yield my 40 seconds to explain the earned income tax credit because it has been worked extensively on. >> unfortunately, the program is overwrought but this amendment does not hurt the program. >> i have not yielded. [crosstalk]
6:51 am
>> the gentleman from new york controls the time. reggie took 10 minutes of my time. a report from the inspector general estimated nearly one in four payments are improper. >> the gentleman from new york controls the time. willu have members who yield to you you can speak. >> can i have my time? rides no, no when you do not tell the truth. >> mr. chairman. >> excuse me, what we sang. >> here you go. look, we know things get heated. that would have crossed the line on the quorum and the roles of the committee in the house. taken.as some time would you like another 15 seconds on mr. reid's time? >> thank you. just speaking out
6:52 am
of turn here, but this is not going to hurt. all this does is go back and do a comparison of wages to those which are reported. something that was star a long time ago and now even the irs commissioner has said this is a reasonable way of assuring. good piece this is a of legislation that i think even you would agree with its people do not want to see -- and it's tough enough when we give the united states government money taken from the taxpayers. they don't want to see and wasted, going in the wrong direction. >> i yield back. >> dr. davis is next in line to speak. my intention is after dr. davis speaks, more questions for mr. barthold, we will recess for votes on the house floor. we will immediately reconvene here, finish the amendment, and vote tonight. actor davis, you are recognized to strike the last words on the
6:53 am
amendment. davis, you are recognized to strike the last words on the amendment. >> i yield. >> in response to what mr. reid said, some of the words are very similar. we cannot model, even though there is broad disagreement, there were a series of informal sessions, formal sessions, we went back and forth. most of it was based on good will. much of the reporting came from your side. in fairness, mr. camp gave us every opportunity to participate in that dialogue as we went along that bill. the two of us joined the committee on the same day. we were very good friends. i must tell you he broken down so that every single item in his eventual proposal was thoroughly parsed.
6:54 am
eventually he was down to his own staff. i get that. but that is not the beginning of the process, that is the end of the process and i yield back my time, mr. chairman. just like to begin by correcting the record on one thing i said with reference to mr. reid when he was out of the read -- room with reference to the stack of documents he has. it is my belief that the internal revenue code has expanded the number of pages by almost 40% since republicans first took control of the congress. him across have been a charge for two years with a democratic president during all that time so when you stack those books up , about 40% of it, a little less, is there as a result of republican loopholes, changes in our tax laws.
6:55 am
what i see them as additional 33 pages is more of the same. anyone to explain how these provisions that were written on international base erosion were written anyone other than corporate lobbyists and perhaps mr. cohen over at the white house who has so much experience with international tax avoidance. these provisions are designed to create a swiss cheese type of international race erosion. erosion. accountants will work around these rules to ensure as much line the pockets, the tax rate will be essentially zero. they will find ways around the so-called 10% on high income and they will pay nothing. i will why the focus and alert you now, we will not alerted the amendment we will be offering has one and only one
6:56 am
purpose, to ensure that the profits that are earned get taxed on the same basis as those here at home said that we are an investmentg elsewhere but encouraging investment right here in the united states. on these international tax rules, there will be no post-filing. there will be complex filing in order to avoid any tax liability in the united states on these earnings that is unfair to small business, domestic business, and certainly to the families that will have to pick up the tab. and i yet. >> the gemini yields. >> does the gentleman not recognize lowering the corporate tax rate will make it less profitable unless likely that corporations will -- >> reclaiming my time. reduction in statutory corporate tax rate as long as it is not done with broad money but i maintain if you have the corporate tax rate
6:57 am
at 10% here and 5% or 0% abroad there will still be an incentive abroad andew jobs that is exactly what you have on your bill. you have a purported disparity of 20% at home and 10% abroad but in fact thanks to those swiss cheese erosion provision, it will affect zero from this transaction and this new language has been written to help leverage attorneys and accountants to avoid paying taxes on their foreign operations. it is designed to outsource and export american jobs said that someone chooses between san antonio and stuttgart, they will choose student guard because they can match it up -- student stuttgarte.
6:58 am
that is why i oppose this. >> the midi stands in recess. in recess.e stands christ the house ways and means committee continues work on wednesday. watch live coverage at 10:00 a.m. on c-span3 or c-span.org or listen on our free c-span radio app. >> discussing in a few states today. electing a new governor and virginia. republican ed gillespie, a white house adviser to george w. bush is running against democrat ralph northam, a pediatric neurologist. we will have live coverage tonight on the c-span networks. and voting on who will replace republican governor chris christie. watch election

28 Views

info Stream Only

Uploaded by TV Archive on