Schumer Floor Remarks on the Republican Tax Bill
Washington, D.C. – U.S. Senator Chuck Schumer today spoke on the Senate floor regarding the need for bipartisanship on tax reform and the consequences of the Republican tax plan on the middle class.
Now first, before I get to my main issue of taxes, I just heard the Majority Leader talk about taking away the blue slip. We hear from the other side professing they want to work in a bipartisan way, but every step they take takes away bipartisanship. Reconciliation takes away bipartisanship. Getting rid of the blue slip takes away bipartisanship. Unfortunately the Majority Leader has taken so many steps this year to remove any hint of bipartisanship, most notably reconciliation on this major, major tax bill.
This is the first time we are doing tax reform in 36 years, but then it was done in a bipartisan way. The product lasted, and people in retrospect were proud of it. Because this bill is being done in such a partisan and narrow way, and the idea – I even heard my friend from Utah say this – of “join us.” You don’t join us after you put together a bill in the dark of night just with Republicans and then say “come join us.” That is not how tax reform was done in ’86, that is not how the major, bipartisan efforts in this body have ever been done.
It is a group from both parties sitting down and coming up with a plan. To offer amendments and then have them all defeated or ruled out of order, and then say that is regular order. Who are we kidding? Who are we kidding? This has been a very partisan bill, that is why it is not a great product, that is why the other side is rushing it through. This is not a proud day for this chamber and history will show that.
Now I would like to talk about the specific plan, although we are still not sure what the plan will be.
According to reports, Republicans are still furiously debating changes to their bill. And who knows when they will put the bill on the floor. A bill like this deserves weeks of debate on the floor. At most we will get twenty hours of debate, and maybe not then depending on when the Leader puts the new, substitute bill on the floor. That is so wrong. That is so, so against the better angels of this chamber, and the history we have had for centuries. It is against the best practices that my dear friend from Utah, the Chairman of the Finance Committee, has exhibited throughout his career. So I hope we can, even at this late moment, change that.
We’re potentially only one day away from a final vote on a bill to rewrite the US tax code, and significant parts of the Republican bill are still up in the air. By the time of the vote, no one will have a definitive analysis of how the bill would impact the economy. No one will know how the last-minute provisions Republicans add will affect American taxpayers and businesses.
If this bill should pass – and I hope that it does not for the sake of America and for the sake of the middle class – my Republican friends will regret rushing it through in such a brazen way. There will be unintended consequences. The rush to get something – anything – done, will haunt my Republican colleagues in years to come, and I dare say in November of 2018.
I’d understand the rush if the Republicans were sure that they had a great tax bill. But they are not sure. I know so many of my colleagues and they have expressed real misgivings about this bill. They say it is better than nothing, but that is not the alternative. It is not either this bill or nothing because we Democrats are ready to sit down and work on a bipartisan bill that will take a couple of months, and come up with a much better plan that will get 70 or 80 votes on the floor of this chamber that we all can be proud of.
Every independent analysis has shown that it will end up raising taxes on millions of middle-class families. The Tax Policy Center estimates that 60% of middle-class families will see a tax increase at the end of the day, while folks making over $1 million a year will get an average tax cut of $40,000. Do millionaires need a tax cut at all? Are they doing so poorly? Is there any study that shows this kind of tax cut will make them work harder or create more jobs? No. None.
So the individual side here, which reduces the top rate paid by the top 1%, if that is still in the bill they are going to put before us, it is misguided.
Corporations will get permanent tax breaks while individual tax reductions will expire after only a few years. Estates worth over $11 million dollars will get a tax break while 13 million fewer Americans, mostly low and middle income, will get health insurance.
Why rush to pass a bill like that? It’s no wonder the bill is so unpopular with the American people. In every survey that I have seen, and every state survey that I have seen, the numbers who dislike the bill exceed, in most cases by a lot, those who like the bill. Just like healthcare.
Corporate profits are near an all-time high; companies are flush with cash, the richest 1% of Americans receive 20% of the overall national income. The rich 1% get over 20% of the national income, God bless them. I don’t like that percentage, and that percentage hasn’t been matched in nearly a century, since the Roaring Twenties. But do they need a tax break? Come on.
Corporations and the wealthy are doing great right now, god bless them. They don’t need a tax cut. To lavish them with huge tax breaks and ask the middle class to bear the cost – that’s about as backward as it gets. That is not a bill anyone in this chamber can be proud of whether your views are for tax cuts or not.
The main argument my Republican colleagues use to counter these damning facts – what I’d say is the core of their argument for this tax plan – is that a massive corporate tax cut would grow the economy and make it easier for companies to invest in their workers.
The argument that a massive corporate tax cuts leads to more jobs and higher wages is a flimsy house of cards that falls down under the slightest scrutiny.
Yesterday, Bloomberg published an article citing the CEOs of major companies like Cisco and Coca-Cola who said, according to the report, “they’ll turn over most gains from proposed corporate tax cuts to their shareholders, undercutting President Donald Trump’s promise that his plan will create jobs and raise wages for the middle class.”
We’ve seen similar quotes by major corporate leaders on earnings calls over the past several months. They admit it. This big corporate tax break will go in large part to stock buybacks and dividends, which we all know go to the wealthiest people in America. The preponderance of it goes to the wealthiest people in America. The additional profits from corporate tax cuts won’t go towards new investments or higher wages, but CEO bonuses, stock buybacks, and dividends.
Perhaps the most compelling testimony was given to top White House economic advisor Gary Cohn himself, who spoke at the WSJ’s CEO Council earlier this year. The gathering of business leaders was asked to raise their hands if they planned to invest the money they got from corporate tax cuts (into their companies). Gary Cohn had to ask why there weren’t more hands up.
And again, they say ‘well they were afraid to say so, they don’t want to reveal their plans.’ Well corporate executives are revealing their plans in earnings calls, and when reporters ask them so many of them say ‘I am not going to invest this in jobs, I am going to invest it in stock buybacks, dividends, and send it back to the shareholders.’
The harsh fact of the matter is that tax cuts don’t result in the kind of economic growth and job growth my Republican friends predict. They didn’t after the Bush tax cuts. They didn’t in Kansas where there were so many promises. ‘We cut taxes in Kansas, there will be huge growth and jobs.’ Well it was a huge flop, what happened in Kansas, that our Republican colleagues are repeating. They are not learning from history. Kansas’ job growth last year was much lower than the national average, despite all the big tax cuts they gave.
I’m afraid that Republicans are willing to paper over their serious reservations with this bill in order to just get something done. They’re willing to look past the fact that 60% of middle-class families will see a tax increase at the end of the day; that healthcare premiums will rise 10%, and 13 million fewer Americans will have insurance. That the tax bill will exacerbate inequality in an economy that’s already perilously un-equal.
All in the name of a deficit-busting corporate tax cut that won’t create the kind of economic growth and job growth that they’re predicting. I heard the Leader speak a minute ago and say ‘the focus of this bill is on the middle class.’ It’s only on the middle class if you believe in trickle-down economics and that giving money to the wealthy corporations, giving money to the wealthiest of people, will create jobs.
Trickle-down: it has never worked. 77% of Americans, by a recent poll, don’t believe corporations should get tax breaks. They don’t believe in trickle-down. The only people who seem to believe in trickle-down are the members of this chamber and the big corporation leaders who will get the benefits. Nobody else seems to believe it. Trickle-down is wrong. This bill could be entitled ‘The Trickle-down Tax Bill.’ Let’s hope and pray, middle-class people, that when we give most of the breaks to the wealthiest and biggest corporations, that you just might get a few crumbs. Nobody wants that. We could do better, much better, working in a bipartisan way.
I’d say to my colleagues, particularly those who aren’t sold yet on this bill: we can create a better product by working together. Democrats and Republicans agree on many principles in tax reform. We both want to lower rates and close loopholes, reduce burdens on the middle-class and small businesses, and simplify the tax code. I think many on the other side agree with us that it should be deficit-neutral. But this bill is none of those things.
If we start over and pursue tax reform the right way, the bipartisan way, the open way, the sunlight way, I genuinely believe we can find a product that both sides can be proud of, and one that will be much, much better for the American people.