Wyden Remarks at Tax Policy Center on House Republican Tax Bill
WASHINGTON – Senate Finance Committee Ranking Member Ron Wyden, D-Ore., today addressed the House Republican tax bill and prospects for tax reform as part of the Urban Institute-Tax Policy Center’s Distinguished Speaker series:
“The centerpiece of the Republican tax bill is big corporate tax cut. And it’s not temporary, like the family tax cuts are. It’s permanent -- set in stone, written in ink, locked in place.
“Republicans will say it’s about helping corporations invest and hire. But here’s the reality -- corporations are already awash in capital. This is among the defining characteristics of the American economy after the Great Recession. Profits are up, unemployment is down, times are good. There is no shortage of cash. The big economic challenge of the last several years has been figuring out how to make sure that workers get to share in the prosperity our economic engine is capable of creating. There is no reason whatsoever to believe this Republican tax handout to corporations will accomplish that goal.
“Furthermore, corporate heads are already out there previewing their plans to use these tax handouts to fund stock buybacks, retire debt and pass on windfalls to shareholders. That doesn’t sound to me like a win for the working man.”
Wyden’s full remarks as prepared can be found below
I want to begin with a line I read in a newspaper report on the tax bill over the weekend. It said that a conservative group had hired some messaging gurus to test out various tax lines on voters. And one of the most effective lines was, “The plan will benefit those who need it most, the middle class.”
Conservatives sure wasted a lot of money on that pollster. As one independent analysis after another shows, it’s clear the Republicans have put forward a tax plan that is overwhelmingly skewed toward big corporations and those at the top.
According to press reports, the JCT said that nearly eight out of ten dollars in the Republican tax cuts go to corporations or the wealthiest estates in the country. Eight out of ten! So much for the old Mnuchin Rule, no absolute tax cut for the wealthy.
Now, I’m coming off of four town halls back in Oregon over this weekend. And it was clear from the conversation in those town halls that Americans aren’t buying the idea that this plan is all about the middle class.
There was one tax issue in particular that stuck out, and it dealt with the unfairness of eliminating the student loan interest deduction.
College grads, under this bill, will no longer be able to write off their student loan interest payments. But corporations will get to keep many of their interest payment write-offs.
That’s just one of the gross double standards in this proposal. And I believe you’re going to see more and more of these examples hitting the front pages and driving big traffic online.
Another example -- I’d wager that a lot of families of limited means will be shocked and concerned when they hear about how the Republican bill will hike prices on everyday consumer products. This is all about the “base erosion excise tax,” which is just Washington lingo for a new grocery tax, a new auto tax, a new clothing tax.
It’ll mean that a grocery shopper in Medford, Oregon, could be out an extra 50 bucks with every trip to Fred Meyer to stock up the pantry.
People in the market for new cars are going to have to reconsider what they fit within their budgets because the Republican tax bill sent the sticker price a few thousand dollars higher.
A single mom taking her kids back to school shopping might have to scale back her expectations of what she can afford.
Those kinds of scandalous revelations are going to keep making news in the days ahead. Because the end result of this bill is going to be a tax hike on millions of American families.
There’s also the talking point that this bill is a win for simplicity. But there’s no way you can look at the new passthrough loophole and come away believing this Republican plan makes the code a whole lot easier to deal with.
Suddenly, there’s a new “70/30” rule having to do with categorizing income.
And if that’s not tough enough, there’s a “facts and circumstances” test to add even more murky complexity to this new loophole.
Let’s all recognize one thing. Every time the phrase “facts and circumstances” is uttered on Capitol Hill, a tax lobbyist on K street makes partner. It’s a bonanza for white-shoe lawyers and accountants, and there’s no way the IRS can administer that kind of extraordinarily complicated system.
So much for simplicity, I guess.
Bottom line, the centerpiece of the Republican tax bill is big corporate tax cut. And it’s not temporary, like the family tax cuts are. It’s permanent -- set in stone, written in ink, locked in place.
Republicans will say it’s about helping corporations invest and hire. But here’s the reality -- corporations are already awash in capital. This is among the defining characteristics of the American economy after the Great Recession. Profits are up, unemployment is down, times are good. There is no shortage of cash. The big economic challenge of the last several years has been figuring out how to make sure that workers get to share in the prosperity our economic engine is capable of creating. There is no reason whatsoever to believe this Republican tax handout to corporations will accomplish that goal.
Furthermore, corporate heads are already out there previewing their plans to use these tax handouts to fund stock buybacks, retire debt and pass on windfalls to shareholders. That doesn’t sound to me like a win for the working man.
So as you look at this bill from various angles and you’re left scratching your head, you have to wonder what economic problem the Republicans are trying to solve with this bill.
It does virtually nothing for working Americans.
Millions in the middle class will see their taxes go up, especially as their temporary tax cuts phase out.
College grads could be out billions of dollars as paying off loans becomes more expensive.
Vulnerable people with big out-of-pocket medical expenses, particularly seniors, could take an enormous hit.
The new grocery tax will send everyday costs even higher for families walking an economic tightrope.
The real winners under the Republican plan are the big corporations and those at the very top.
This is a remarkable contrast to what happened back in 1986, when Ronald Reagan and Democrats came together to pass a revenue-neutral tax reform plan. Back then, Republicans wanted a more efficient tax code. Democrats wanted to clean out special interest loopholes and give more Americans a chance to get ahead. And so under the Tax Reform Act of 1986, corporations paid more, Congress closed loopholes, and the tax system became a whole lot fairer than it had been.
The corporate giveaway Republicans are trying to jam through the Congress today makes Ronald Reagan’s tax reform look like the work of a rabid socialist.
And I’ll wrap up with one last thought.
The way Republicans are forcing this plan through the Congress is an obvious and shameful corruption of the legislative process.
This is a comprehensive overhaul of our tax code. It was written behind closed doors. It does not include a word of Democratic input. There will be no legislative hearings on the content of this plan. Just a few days after its release, the Ways and Means Committee began its markup.
Now it looks like that pattern could be repeated in the Senate. In less than a week, the Finance Committee will begin marking up a bill that will make major changes to the tax code, and not one Democrat on the Finance Committee knows what’s in that bill.
The Congress should never handle legislation that has the power to reshape the entire American economy and lift or devastate millions of families’ finances in this kind of slapdash partisan manner. That’s my bottom line.
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