Today were going to consider our chairmans mark as modified. Having extensive questioning and discussion of amendments last night. Admittedly things were a little chaotic at the outset and i know tensions ran high. Were going to improve the process and communication today and hopefully make things move a little more smoothly. With that issue addressed, id like to say a few words about the tone of our discussion this week. I think it has been a real problem. As ive said, i dont begrudge anyone for holding a passionate viewpoint on any issue, and i dont doubt my various colleagues sincerity. But for the committee to operate, we need to be respectful and allow the debate to unfold in an orderly fashion. Members are, of course, free to disagree about any issue, but no one should interrupt another member or shut down the other side or impugn their character lea colleagues motives. In my opinion, we saw quite a bit of that and some of it was pretty inflammatory. As for myself, i can take it. I can guarantee that in my 40plus years in the senate, ive been called worse names. For the good of the committee, i want to encourage my colleagues to dial back the rhetoric and turn down the volume of some of our arguments. This is the last time i will raise issues about process for the duration of this markup. If were going to have a lively debate, it should be about policy. Lets talk about policy differences for a moment. Let me reiterate what our bill does. Our bill gives tax relief to individuals and families across the board with the middle class getting the largest benefit relative to their income. We provide this relief primarily by cutting rates and expanding credits for parents and families. Our bill will also help businesses of all sizes. Our passthrough solution is simple and effective which is why the bill is supported by the National Federation of independent businesses, the largest Business Organization in the country, in the world really and also most other small Business Organizations. The business section of the mark also includes a significant reduction in corporate rates. I know my colleagues have characterized this in a number of ways, but this is not some radical right wing approach. As ive noted, members of this committee on both sides have supported the proposition of lowering corporate rates for years now. The Ranking Member actually introduced legislation that would have reduced the rate to 24 in the past. Yet, now it appears that the notion that wed even consider moving down from the highest Corporate Tax rates in the industrialized world is something totally abhorrent to democrats. As we debated at length yesterday, the mark will also zero out the punitive individual mandate tax established under obamacare. Despite claims to the contrary, we contend that this is a pro family, pro middle class and pro growth proposition. It will undo one of the most regressive taxes in the tax code and allow us to provide additional tax relief to middle class families. By now im sure most of my colleagues are aware of the most recent developments of jcts analysis. I expect my friends will try to make some hay out of the new table this morning and thats their right. But i want to provide some context before that begins. We developed a modification to the chairmans mark that included additional tax relief for families throughout the middle class. Once again, it expanded further the Child Tax Credit, made it more refundable and provided it to a greater number of families with children. We also adjusted the rates downward for middle class families. Of course we relieved those families of the burdens imposed by the individual mandate tax. With those changes in place, jct noted a projected uptick of taxes of some in lower income brackets. Obviously we have no intention of raising taxes on these families. Heres the rub. Jcts analysis doesnt show wewe e were raising taxes on lower income americans. Were seeing some taxes go up in the distributional analysis because of a scoring assumption, not because of tax rates or tax policy. Congressional scorekeepers have assumed that if the individual mandate were to be repealed, a segment of people will opt voluntarily to not get Health Insurance. The assumption extends even to those who currently get their insurance for free under medicaid. Jct began with an assumption that some people in the lower income brackets will opt to not Purchase Health insurance and thus not take advantage of available tax credit subsidies. Without those credits, they see an overall uptick in their Tax Liability. I do not fault jct for this. They have to make assumptions in order to make credible projections. However in the world that exists outside of those assumptions, people will be making their own choices. In fact, our bill will give them additional freedom to do so. Nothing in our mark will impact the availability of premium subsidy credits. Nothing in the mark would direct or suggest to taxpayers they should not take advantage of the credits. This is the result of an assumption about economic behavior that is 100 voluntary. I believe jct has Additional Data that will demonstrate that. But for the behavioral assumptions, our mark provides significant relief to all low and middle class income brackets. I know were going to hear arguments to the contrary this morning, but lets be clear. Anyone who says were hiking taxes on low income families is misstating the facts. Anyone who says people will see their taxes go up because were taking away their Health Insurance is also misstating the facts. Just to make sure this is abundantly clear, i want to ask mr. Barthold about the latest jct distributional analysis. Now, let me just ask you this question. Does anything in the mark reduce the availability of premium subsidy tax credits . Mr. Chairman, your modified mark leaves in place the existing premium subsidy credit structure, leaves it in place, no change. Okay. Does anything in the mark suggest or direct individuals in any income bracket to not Purchase Health insurance or to forego the use of available subsidy tax credits . No, it does not, sir. Is the impact were seeing in the distributional analysis relating to decreased utilization of the premium subsidy tax credits the result of voluntary taxpayer behavior that is not mandated under the mark . That is correct, mr. Chairman. All the analysis we try to provide to the members, the conventional revenue estimates and the distributional analysis accounts for taxpayer behavior. The specific example youre referring to includes a lot of taxpayer behavior in the analysis. I appreciate the work youve done. Senator widen. Thank you, mr. Chairman. First, you made some comments about our personal demeanor and personal relations. I can go down the row and mention my colleagues affection for you starting with senator mccaskill who said, and quote, she loves you. I love her too. I cant top that, but as you know, nancy and i are so fond of you and elaine. Besides colleagues, chairman hatch is a former boxer. We do not want to mess with the prospect of his right cross. So thats thats good advice. Thats the story with respect to the personal relations. Colleagues, im going to make my Opening Statement. Then i have a question based on the jawdropping news of yesterday and senator carton indicated that a number of our colleagues have questioned because of the very extraordinary news weve just learned about. So ill make my Opening Statement. Then i have a question. Then, mr. Chairman, i feel very strongly that colleagues ought to be able to ask mr. Barthold questions about what we have just learned. We have gotten astounding news in the last hour. According to the latest figures from the joint committee on taxation, in 2021, families earning 30,000 and under are going to get clobbered by a tax hike of nearly 6 billion to pay for this handout to multinational corporations. A 6 billion tax hike on low income americans. And by 2027, the news is even worse. A decade out, this bill raises taxes by 27 billion on families earning 75,000 and under. And meanwhile, the big corporations are guaranteed a cut across the board. Colleagues, i believe this process ought to end right here and now and we get together when we are prepared, as our side wants to do, to work in a bipartisan way. I dont know how anybody can go home now to the folks they represent and explain why its a good idea to hike taxes on parents who barely stay afloat to pay for a massive corporate handout. What is happening now is just sha shameful. Republicans in this room spent all day yesterday stating that repealing the individual mandate is a tax cut. We now have Proof Positive that is dead wrong. This is what happens when you ledgislate in secret with such reckless haste. This amounts to writing tax policy in the dark, and the majority has done its best to keep the lights turned off. The first version of the bill that came out last week was a huge tax hike for millions of middle class folks. Then on tuesday, after two entire days of markups had passed, there was a new version that attacked the health care of millions of americans. Now we have shocking new information as of this morning. At this rate, republicans are going to test the limits of exactly how many different ways hard working americans can be forced to pony up vast sums for corporate handouts. I want to be clear, because we touched on this yesterday. I think were getting bead, colleagues, on whats ahead. Once the finance Committee Process wraps up, this bill is headed straight back behind closed doors. Senators head home at the end of the week for the thanksgiving holiday. But the majorities from the house and the senate are going to be hashing out the differences in their two bills. Theyre looking to cut a back room deal and make 10 trillion in tax changes on the fly. And if youre watching at home and its been a minute since you took civics, heres what that means. When youre reaching for the cranberry sauce, republicans are going to be reaching for your pocketbooks to give handouts to multinational corporations. This is not a real, honest to got attempt to have a full bipartisan debate on tax reform that gives everybody a chance to get ahead. There were amendments to bring some sunshine to the process, there was an amendment to protect medicare and social security. There was another amendment to protect veterans. Another stunner was what happened with senator brown yesterday. He brought up an amendment because he wants to protect red, white and blue jobs. He doesnt want them going overseas. He has been leading this crusade for years now and he took his proposal to the president. He handed it to the president twice. I know because i was at the white house when he did it. And when youre dealing with a smart bipartisan proposal, its all about protecting and creating red white and blue jobs, senators ought to look on the bipartisan basis at ways to make it happen. Thats not what happened yesterday. Yesterday it was said the amendment was nongermane because senator brown didnt have a score. He submitted his proposal for a score nearly a week ago, hours before the chairmans bill even became public. How can you ask a senator to do better than that . In my judgment, it seems like a convenient excuse to say no. If a pro jobs idea, a pro american jobs idea is important to senator brown gets blocked without any valid reason, its hard to see what this process is about other than getting this process out of committee and back into secret discussions. This morning people across the country are waking up to confirmation that the bill pays for massive handouts to corporations with a multibillion dollar tax hike on those who cant afford it. Colleagues, this is nothing like the thoughtful, measured, bipartisan approach that in my view defines this storied committees history. This isnt a process now of bringing together good ideas from both sides. This is an exercise in legislating with reckless ha ll. And working families and middle class families can now see, especially because of the news of this morning, that it has disastrous consequences. Before my question, i just want to say and i say this with great sorrow that if this process continues this way when the history of this extraordinary committee, the Senate Finance committee is written, this is going to be a dark, dark chapter. I want to ask my first question, mr. Chairman. Mr. Chairman, like you, i have one question, but i want to emphasize colleagues on my side have asked specifically for the chance to ask mr. Barthold about this extraordinary news of this morning. Now, mr. Barthold and colleagues, ive been asking for the distribution table wait, wait. Mr. Chairman, id like to ask the question like you did. Im going to run the committee. What were going to do is were going to have ten minutes to each person. Everybody will get their chance to ask questions. I apologize to you for asking asked a question of mr. Barthold. Parliamentary inquiry. In the interest of just fairness, could i now ask one questioning after my Opening Statement . Sure. Go ahead. Thank you for your courtesy. Ive been asking for a distribution table on the modified mark for the past two days. I still havent received the table directly, but i understand the table was put out earlier today. My understanding is that by 2027 almost every middle class taxpayer is going to get a tax hike or crumbs. I would like mr. Barthold to describe what the result is of this new plan for middle class people in 2027. That is my one question. As ive indicated my colleagues have questions as well. Okay. Thank you. The senator wanted me to respond . Just as he did to you. Senator widen, in 2027 remember, thats the year that includes the sunset of the individual income tax provisions in the chairmans mark as well as some additional provisions that increase taxes on businesses by changing the business tax base, page five of jcx 58 that we released approximately 9 40 this morning shows that compared to present law, the change in federal taxes is generally positive for the income groups from less than 10,000 to 75,000, slight modest negatives in comparison to the underlying mark for taxpayers in our income categories above 75,000. Thats my point. Im going to let other colleagues but im looking at the chart on page 6. And everybody over 75,000 these are hard working middle class families in michigan and maryland and colorado, all of the states represented here. You look at page 6 and those folks get hammered. Under 75,000, excuse me. Under 75,000, those folks get hammered. And its right in the table, colleagues, on page 6. Middle class families making under 75,000 in 2027, page 6, they get clobbered. They pay more taxes. All right. Youve made your point. Mr. Chairman, thank you. I am going to i have to assume for now that theres a profound misunderstanding on the part of the Ranking Member, because i know him well enough to know that he wouldnt knowingly suggest something as absurd as what he seems to be alleging. Let me explain whats going on here to clarify this. First of all, i think we all know we subsidize many activities through the tax code, whether people think thats a good idea or not, it happens all the time. Here in congress we have very, very strange and i would say even ridiculous rules and scoring conventions that wildly mischaracterize these subsidies in a number of circumstances. Specifically, when we think a taxpayer voluntarily chooses not to participate or engage in a program that has such a tax code subsidy, we take that subsidy and we stick it in the table as though its a tax increase. The advanced premium tax credit is one such example. This is absolutely not a tax increase and you guys know that. The fact is and ill demonstrate this in a minute every single income cohort has substantial savings in taxes and virtually all middle income taxpayers are going to get a substantial tax cut. So let me try an analogy here. Lets imagine somebody qualifies for Unemployment Insurance. They lose their job, they could get Unemployment Insurances if they wanted it, but they choose not to sign up for whatever reason. They would not get the unemployment payments. Did we raise their taxes . Did that person just get a tax increase . Or how about more directly through the tax code. The earned income tax credit. Lets imagine somebody is working. Theyve got a job that pays 8 an hour and they get the earned income tax credit. For whatever reason they decide to quit that job. Well, they could be still working. They could still be getting the earned income tax credit but weve chosen not to. How about the American Opportunity tax credit . That is a partially refundable tax credit. It covers part of the cost of tuitions and fees of poeople wh go to college. Up to a thousand of it is refundable. If somebody decides theyre not going to go to college, did we raise their tax because they didnt take the American Opportunity tax credit . Thats ridiculous. Thats what our colleagues are suggesting is a tax increase. Now, it is not a tax increase if a person decides they dont want to buy an obamacare plan and as a result we dont send a payment to an Insurance Company. Thats what this is about. Thats what the advanced premium tax credit is. Its a payment to an Insurance Company if a person chooses to participate in the program. If they decide not to participate in the program, we dont send the payment to the Insurance Company. Thats a tax increase . Its actually a tax cut. Let me show this chart that depicts this. This simply shows the effect on taxpayers by cohorts, by income cohorts with the Insurance Company payments put aside. And it shows that each and every single income cohort has a substantial tax increase. What this reflects is the reality that the family is going to experience. Theyre going to owe less money to uncle sam. And if somebody decides that they want to participate in obamacare, then we dont make any change in that whatsoever and the premium tax credit goes as it would otherwise go forward. If they decide they cant afford that, were going to give them the tax benefit of not penalizing them anymore and then we wont send a payment to the Insurance Company. It has no effect on them. This is the chart that reflects the tax reality for working class and middle class families and everybody else. And virtually everybody and every single cohort in every single year has a savings. Thats the reality. Thank you, mr. Chairman. Mr. Chairman, just very quickly to respond. Wait, wait, wait. Now, look, were not going to be a free for all here today. This is going to be run in a fair but responsible manner. I dont think we did it yesterday very well. Now well turn to the Ranking Member first. Then well go back and forth. Ill take only 30 seconds because my colleagues have been waiting. Ive never heard a senator try to psycho analyze a joint committee on taxation table, but at the bottom of page 6, colleagues, its all there in black and white. You make under 75,000 and according to the table going through every group they pay more in taxes. Anybody who wants to try to psycho analyze otherwise, its their constitutional right but the table is indisputable. Does anybody on this side want to answer that . Thank you, mr. Chairman. Its correct that the table the Ranking Member is reading from has that number on it, but its also correct that no american who is attributed a tax increase by that number is paying it. Its a payment to an Insurance Company and it is a payment that every american whos on that chart could choose to take if they wanted to. The bottom line is, if you look at the Tax Liability of the people that youre talking about saying theyre getting a tax increase here and just calculate out their Tax Liability, whatever it was before this bill and whatever it will be under this bill, their Tax Liability is going down. The examples that senator toomy made are accurate. If somebody qualifies for food stamps and chooses not to apply for them, did we take away their money . No. If somebody qualifies for any of the other government programs, somebody qualifies for medicaid but chooses not to sign up for medicaid, did we give them a tax increase . No. And no matter how you try to characterize it, exactly what is reflected on these charts is the fact that people who are required by law to pay a penalty for not buying insurance and are relieved of paying that penalty are then going to have the choice as to whether to buy insurance or not buy insurance. But they now know they dont have to pay a tax penalty if they dont. And if they choose not to, that doesnt mean their taxes went up. Theres not one dollar taken away from them if they make that choice. This bill does not take one dollar away from them or charge them one dollar more. No matter what the way that our conventions about scoring refundable tax credits say. Mr. Chairman. Senator carden. I listened on monday, tuesday and wednesday as my republican colleagues pointed to the joint Tax Committee distributional chart as evidence that this bill will help middle knack families. I also heard my republican colleagues diss the joint committee on their revenue estimates, saying they were wrong and the 1. 5 trillion wouldnt be there when we know its going to be more than 1. 5 trillion because a lot of this is temporary in nature. Now we have the joint tax analysis that shows that middle income families will actually see their taxes go up, not down as effective rates. Yet high income families, they do fine. They do fine. Now i heard the chairman talk, well, this is their own behavior. Its interesting that the 180 billion were talking about that comes out of middle income families on the health care subsidies, the majority used that money in the chairmans modified mark. They used it to make certain changes that are reflected in the distributional charts. Youre saying, no, were not going to count the behavior on the health care in the distributional charts but take that revenue thats not going to be spent and use it to make the distributional charts look better. How hypocritical can you be to do that . Voluntary action people make decisions, businesses make decisions as to how theyre going to spend their money. That decision affects their Tax Liability. Youre not challenging that. Look, lets at least have some d decency to respect the professional work thats been done here. What this modified mark will mean is that middle income families are going to pay more. Higher income families are going to pay less. Youve targeted the relief to help the wealthy and the middle income families are going to get stuck with it. But now when youre saying voluntary activity, a person makes a voluntary charitable contribution, that affects their tax returns. The joint Tax Committee has to make certain assumptions as to whats going to happen. I dont think youre challenging their assumptions, because youve taken that 180 billion under the Affordable Care act and you spent it. You also took the money with less people in medicaid and you spent it. Senator, your ten minutes is way up. Call on senator kocornyn. Then were going to go back and forth. Thank you, mr. Chairman. I found since ive been in the senate the more shouting that goes on, the more tenuous the ground of the senator is on and i think thats the case here today. We flatly deny, disagree with the accusations made by my friend from maryland and the Ranking Member. Let me just ask could i ask mr. Barthold, what is the income threshold for lets say a single mom with two children . Whats the income threshold has to be achieved before they will actually pay any income tax at all . The standard deduction for a head of household, which is what youre describing, is approximately 9,000. And each personal exemption is 4,050. You said there were three so thats 12,150. So were saying approximately the first 21,000 of income for that household is exempt from tax before calculating any benefit that the household might receive, assuming its a working mother in your situation from the earned income tax credit and the refundable portion of the Child Tax Credit. So in fact, more income would effectively be not taxed by reason of those credits. So did i understand correctly that the 33,000 roughly under this circumstance that would be tax free . Do i understand that correctly . Theres a thousand dollars of tax credit, the person being in the 10 bracket so theres 3,000 of Child Tax Credit. So that would so that would lets see. I hate doing this on the fly. Youre doing better than i could. Yeah. No. So if we had another you said another 33,000, so another 13,000 of taxable income, most of it in the 10 bracket, would be only 1300 of income tax before claiming the Child Tax Credit. So the 33,000 of income, this individual should have no Tax Liability under present law. Sorry to be confusing. So the single mom with two children earning 33,000 a year would pay zero tax before this under present law, rough calculation. Under the chairmans modified mark, how much would be the income tax responsibility of that same single mom with two children . No change there. There might be some changes in the refundable portion. Youre kidding me. Our colleagues over here are claiming that were somehow targeting individuals like this single mother of two kids saying were going to raise her taxes to benefit multinational corporations when, from what youve told me, her Tax Liability under current law is zero and after this bill passes, her Tax Liability will be zero. Is that accurate . The income Tax Liability for the household that senator cornyn described should be zero you arent prese under present law and under the chairmans mark. Thats the distinction hes making. Well go both. Five minutes. Thank you, mr. Chairman. First i commented on a question. This bill just gets worse and worse and worse. It was trickle down economics on monday, and then it got worse and more people were going to have to pay more on tuesday, plus now people losing Health Insurance and now today this is thursday right . They all bleed together. The sfakt that tod fact is th we now see the worst yet in terms of numbers. The broad point i would make is no matter how you cut this, this bill is about trickle down economics. Its about giveaways for the wealthiest americans, multinational corporations. Most people, people under 75,000 a year, will pay more in taxes and many, many people will lose their Health Insurance. So you lose your Health Insurance to give trickle down tax cut to the wealthiest among us or you pay more taxes so that those who are the wealthiest among us will be able to get another supply side tax cut. Every piece of this bill is skewed to the wealthy and those at the very, very top and the very, very largest corporations, wealthiest individuals, every single piece of it. Now we know in three years, 2 2021, gives families earning less than 30,000 a year a tax increase. All together 6 billion spread out among taxpayers while millionaires and billionaires get a 28 billion tax cut. Thats what the joint committee on taxation has given us in terms of numbers. So every day this bill gets worked on, it gets worse and worse for middle income and working class people. So let me just ask a question regarding the Child Tax Credit. By the way, i should say that the personal exemption is eliminated in this bill so that if you have more than one child, youre going to be penalized. If you are a family of two children, three children, four children, that personal exemption is gone, which means you start in a hole. The Child Tax Credit to me is another example of how this is skewed to the top and trickle down economics. The Child Tax Credit is a thousand dollars, correct . That is correct, senator. And the new version is 2,000, correct . That is correct. Which sounds good. How much of that is refundable . Under chairmans modified mark, 1,000 remains refundable and thats indexed. So theres an increase, but if youre a working family, the mom that was just talked about, you wont benefit from that increase. But you know who benefits from that increase . They raise the cap on the income of the households that can benefit from the Child Tax Credit five times higher, five times higher. 500,000. So the working mom who now, under this analysis, earning less than 30,000, may see a tax increase, may have more difficulty getting Health Insurance, but shes not going to benefit from this Child Tax Credit any more than she does now. Maybe a tiny bit because of the indexing. But the folks that will benefit is something making a half a Million Dollars. So every piece of this bill, unfortunately, in the fine print goes back to the same thing. It is skewed to the wealthy and the wellconnected and its trick. Down economics, which has never worked. Just ask the folks in the state of kansas where after the disaster they had there, a Bipartisan Group of democrats and republicans had to come back and repeal the whole thing, because it was hurting families in their state. Thank you, mr. Chair. Senator warner, we understand youre next. Thank you, mr. Chairman. I guess i just want to make three quick points. One, you know with all due respect, if were assuming that individuals are not going to make rational economic choices in their own best interests in terms of receiving benefits that are available, i agree theyre voluntary. I guess then i would say should we also make those assumptions that businesses are going to not choose the expensing opportunities, that businesses are not going to choose to immediately right off their r d expenses . We get ourselves into a land of hypotheticals that i think are really dont get us there. Subsequently, you guys, jct, youve got a hard job. Youve got to assume rational behavior. I respectfully completely disagree with some of my friends on the other side that people arent going to act that way. As has been made mention by other folks on this side, you know, you cant argue that theres not going to be this loss when you then use the dollars for other purposes. Folks who make choices, presuming that people are not going to make rational choices to take their subsidies or other benefits from the government. I heard colleagues make mention of putting out a hypothetical that said this individual with three children. Because i think our tax code under current and future proposals does try to take care of those. I guess id ask mr. Barthold, using your numbers, if a young man in dallas, texas, a judge struggling entrepreneur trying to get his business started this dallas and he makes 29,000 in 2027, i believe based on your charts hes going to see a 25. 4 increase in his taxes from where they were at least in 2019. Is that not a correct assumption . Were looking at 2027 . Im looking at page 5. Okay. So this young single entrepreneur whos trying to make a business and failed a few times. Ive lived in that tax bracket. But based on the proposal of where he might be in 20182019 if this bill goes through and then happens in 2027, is he not going to see a 25 increase in his taxes. It depends. 25 for a specific individual depends on the specifics of not somebody that has three kids, not a single mom. This is a young entrepreneur am i misreading any of your charts . The only clarification i was trying to make, senator, is that the specifics when you say a single individual, entrepreneur, 29,000 in income, thats one of many of actually millions of people in there in different circumstances. The total that we report there is the aggregate change in tax the point being if we created an example that says the single mom thats struggling with three kids, maybe shes going to not have Tax Liability. If youve got a 25. 4 blended increase on that cohort, then someone i was just trying to pick an example that would seem to have the least amount of other deductions is going to see a big hit. And maybe to be more precise, what this reflects is in the chairmans modification there is the modified indexing. So that means that the tax brackets, the values of the personal exemption which would be back in effect under present law because of the sunset, that they are lower than they would be under present law. I dont want to abuse the chairmans time but i just want to say we could all show examples. But i think youre the referees and i think we have to count on the referees. My last point, mr. Chairman, very briefly, is just if we are going to end up and youve made the point, and unfortunately since ive been here weve done this. And i remember a few years back i thought we were going to vote on the final time of extenders. Well, we have created a whole new bucket of extenders by this gimmicks being used. Not my words, the committee for responsible federal budget. I again just want to introduce into the record their analysis, this group that most of us on both sides have supported that really say this added to the debt is about 2. 2 trillion. When you presume that these popular benefits expire, were going to extend them, you know, we ought to be straight with the american people. Adding 2. 2 trillion includes the additional interest charges. That is a much more accurate number of what we are doing to the debt. Your time is way expired. Thank you, mr. Chairman. Thank you plr, mr. Chairman. To my colleague from virginia, i dont think anybody here is suggesting that people are not going to make rational choices. People make rational choices. What im pointing out is the bizarre anomaly of the way we require joint tax to account for them thats whats so misleading about what you guys are alleging here. So senator from michigan seemed to suggest that every iteration of this is getting worse. These iterations are Getting Better and better for working class and in every cohort. Let me ask you a couple of questions, if i could. And i want to focus on taxes that people actually have to pay, not payments that the federal government makes to Insurance Companies. So lets not focus on payments that my colleagues are absurdly suggesting is a tax increase. If you look at the actual taxes that are actually paid by human beings and i look at the chart that was produced on november 11th, i see reductions in every single cohort, every income cohort. Lets take the 2030,000 cohort. The number on my sheet here is a 7 average reduction in taxes. Do you see that number . Which year, senator . Im sorry, 2023. The senator is referring to jcx 5053 which was the intrusion analysis for the underlying chairmans mark. Yes, in the 2030,000 we estimated that the total taxes collected attributable to that income group would fall by 7 . Correct. It falls in all the brackets. 3 of jcx5317 which was the distribution of the chairmans mark before the modification. Which simply illustrates contrary to what weve been hearing all week long that every middle income tax cohort has a tax cut on average. Then again, putting aside the paints that the federal government makes to Insurance Companies which is ridiculous to consider taxes i know you ran a set of numbers, exclusive of that dynamic. Ive got a chart up here for the calendar year 2023. That is the joint committee on taxation november 16th, 2017d1752. Yes, senator toomey. You and the chairman had asked if we could distribute the effects of the mark as modified absent the zero rated individual mandate penalty. Right. And when you then. All effects of that. When you look at the 20,000 to 30,000 cohort, average savings now is not the 7 it was before, but its 9. 5 . Thats correct senator. And actually, every single cohort has a larger savings which is to say a bigger tax cut under this more seniors version than the previous version. Right . Thats correct. So contrary to what our friend from michigan said. Mr. Chairman, do we have this document . Im just trying to follow it. You should have it. It was given to us. Senator toomey, it was not a public document. You had requested it separate analysis. I can provide ill have it provided to all the members. I had no idea that this was not being distributed. I put it on a chart. This is how big a secret i wanted to keep. Read it. My eyes are not as good as yours. I get that. Apply glasses work well. Ill help with you that. Listen, the fact of the matter is what weve done in the latest version is further reduce, theres no mystery about how. Mr. Barto, what are some of the devices that were used to further reduce the tax burden for middle and working class families . Did we increase the Child Tax Credit. The chairmans mark is modifies to increase from 1650 to 2,000. Any other changes . Also changed the original mark had tax brackets of 22. 5 , 25 , 32. 5 in sort of the middle brackets. Each of those you reduced to 22 , 24 , and 32 respectively. So we lowered rates. Lowered rates. On working and middle income families. We increased the Child Tax Credit for these families. And thats why unsurprisingly the tax burden in this iteration is lower still. A bigger savings for middle income families. All right, senator portman. Thank you, mr. Chairman. If i were watching this from the real world, not from this podium, i would wonder how this all squares because were hearing very different mess actions, and let me just make one obvious point i hope. When the Ranking Member, senator wyden and more recentry senator warner talked about 2027, which is ten years from now, and what the effect is going to be on rilts class families, they were talking, of course, about after the proposal is sunset. And so senator wyden went to page 6 and talked about 2027 and said that he was concerned that taxes went up for individuals. Well yeah, they go up because the tax cuts were putting in place with this proposal end. So if youre watching and wondering how could both these things be true that there are middle class tax cuts as mr. Bart hold just said from today until ten years from now, but somehow in ten years from now taxes go up, yeah, thats true because it sunset. So my friend, senator warner talked about the entrepreneur in texas and he referred to the chart of 2027. Yeah, thats true. Of course, the taxes go up because under the budget rules within which we have to operate here, there cannot be even a penny of deficit as scored on a static basis in the second ten years. And so we sunset those tax cuts that are substantial between now and then for that individual youre talking about because of these budget rules. And mr. Bart hold, is it true in 2027 the difference you see in these charts and again ill refer you to the chart that senator wide is asked us to go to, page 6 of jcx5817. If you look at that, youll see there is substantial tax relief until that last year, 2027. Look at the bottom chart, all taxpayers. Is that accurate that there is tax relief till the 2027 year . Yes, senator toomey. Im senator portman. Im sorry. I appreciate the compliment. So thank you, john. I mean tom, sorry. So i just for the folks in the real world watching this, thats what were talking about here. Now, every member of this Panel Including the democrats have the opportunity to strike that sunset. If they want to offer an amendment to say lets not have this sunset, lets not sunset this legislation after ten years because we want to continue this substantial tax relief that were providing under this bill, we have the opportunity to do that. On the floor of the United States senate. And it was indicated yesterday that perhaps one of our colleagues is going to do that. And if so, this wont be an issue. The tax relief will continue. But again, if i were watching id be kind of confused. The other part i might be confused about is this notion that in the lower bracket, 10,000 to 20,000, 20,000 to 30,000, there has been the argument made here that theres a tax increase. That tax increase is because of the expire riggs of the individual mandate was talked about it. Let me try to put it as plainly as possible. These are people who do choose, senator warner is right. People are rationale and going to make their choices. The joint committee ontachiation is supposed to reflect that rational choice. Being will say you know what, id rather not take this afford halliburton care act Health Care Plan even though i get atach credit if i do it because ill have other costs attendant to that. Some people get more of a Premium Credit than others. Some people will have copays. Some people will have deductibles that are higher. So im choosing not to take that. Tom bartold in the joint committee rephlebs that as a tax increase. Its a choice by people not to accept the tax credit because they would rather as a rational resume being make a decision, not have the other costs associated with that. Thats why i just hope as youre watching this and listening to what were saying, its a decision. Its a policy decision. And i would hope that the bop line is recognized which is that this provides substantial tax relief particularly to middle class families and that tax relief is going to be across the board in every single Different Group of taxpayers as is indicated on these charts as tom bartold has confirmed time and time again again today, and that means that the promise that we have made that there will be relief for middle class families that are feeling the stress higher expenses, flat wages, middle class squeeze are going to get substantial relief. In ohio its about 2400 for a family at the median income. Thank you, mr. Chairman. Thank you. Going to 2027, seating senator portmans point that the personal tax, individual tax cuts expire there, but lets look at what happens in 2027. Mr. Barto, isnt it true based on the last distribution table that youve given us that while taxes go up for people with 100,000 of income or less in 2027, they continue to be lower for everyone over 200,000. Senator mccaskill, thats correct in the total table and you can see the components on page 6 in the two sub tables above. Right. So the point is that even when the individual goes away, the millionaires are still paying lesstachs. Folks that make 500,000 to a million are paying less taxes. Its only the bottom folks that end up paying more and lets look at another diagram on year 2021 based on the distribution table, federal taxes paid in, people between 20,000 and 30,000 under the present law pay in 22 billion in taxes, 22. 5 based on your chart. Im page 2, year 2021. People between 20 and 30,000, nothings expired yet, they pay 2. 5 billion in taxes now and 25. 5 under this proposal. 3 billion more, correct . Thats the consequence of predominantly of the change in the Premium Credit subsidies. And cpi. And cpi. Okay. For millionaires, theyre going to pay 671 under the current law and theyre only going to pay 643. So they get to pay 28 billion less in 2021 while people between 20 and 30 have to pay 3 billion more. Now, lets look at the last one. 2025. Its really stark here. If you add up the numbers of the federal taxes paid by people who make 30,000 or less, theyre going to pay 4 billion more in 2025 based on this proposal. 27. 2 is going to 31, minus 4. Is going to minus. 9, 5. 9 is going to 6. 1. Thats a total of 4 billion more theyre going to pay. But if you add up everybody who makes more than 200,000, theyre going to pay 90 billion less. If you add up how much taxes they pay presently, 943. 3, 200 to 500, 889 under this proposal. 500 to a million pay 321 billion in taxes. Under this proposal 301, a million and over they pay 780 now, will pay 764 under this proposal. So in 2025, let me make sure everybody understands this, people making less than 30,000 a year are going to pay 4 billion more in taxes while people who make 200,000 and over are going to pay 90 billion less. Thats what were talking about. Thats whats wrong with this bill. Thats why we are offended at all of these things that are skewed toward the people at the top of the income charts. And if anybodys confused about the numbers i just did, im happy to walk them through it, but i added it up myself and i used to be an auditor. Thank you, mr. Chairman. Mr. Chairman, thank you. And thanks for this hearing. Listening to the previous speaker wondering what her point is to make all these rates make all these rates permanent. Ill join you on that if you want to make these individual rateser. The, if thats what youre. Id love to work in a bipartisan way 0 lower the corporate rate. Theres not anybody on this side thats going to disagree. Theres a group of us that would love to get together and do that. I want to go on the theme. Do this thing first. My friend senator portman if youre watching this on tv and listening to the other side of the aisle argue against themselves, its fascinating. I listened to apply friend from michigan talk about how those less than 30,000 a year are going to be paying more taxes. We just had jcts tell us they will not be paying more taxes. Then my friend from virginia said he agrees with jct they will not be paying more taxes because thats the facts. Now i listen to my friend from missouri and shes saying under 30,000 youre paying more taxes. Which is it . I want to hear from the other side . What is it . The fact is and ill tell you what it is, if youre making less than 30,000 a year under the current tax system, youre not paying taxes. That was well documented by the majority whip. And under this new, under this new tax system thats being presented today, you still wont be paying taxes. So to listen to time and time again, i know we air ear plug around here. Thats the key. Youve got your talking points in front of you. But the fact of the matter is mr. Bartold was very upfront and said under the Current System if you make less than 30,000 a year today you do not pay taxes. You do not have a federal liability. Under the new bill that we in front of us today and you make 30,000 or less, you still wont be paying additional taxes. So maybe i should ask this question one more time. Mr. Bartold, is there anything under this legislation that would prohibit an individual from receiving federal assistance to help them afford coverage . Senator heller, the chairmans mark as modified makes no changes to the credits available under 36b, the advance premium subsidy credit. If you make 30,000 or less today under the Current System, do you have a federal liability . Again, individual specific case, if we return to senator cornyns example. A mother with two children. None. Under the bill thats in front of us today, would that same individual have a Tax Liability . That same individual would have no Tax Liability. Mr. Chairman, im getting tired of listening to individuals talk about those who make 30,000 or less and having their taxes increase. Thats absolutely absurd and not true. So if we could go on to other portions of this particular piece of legislation, im willing to listen, but to continue to beat on that point is literally untrue. Simply because simply because you choose not to take the individual mandate is not a tax increase. I can tell you stories after stories back in my state that was hit hard by the recession of individuals that lost their jobs and were told that they could pick up Unemployment Insurance and they said you know by my boot straps im going to pick myself up, were going to work hard and find a job chose themselves not to take Unemployment Insurance, none of them believe their taxes were raised on them. Theres none of them out there. Ive talked to hundreds of people in nevada that chose not to take Unemployment Insurance during the depth of the recession. Yet, everybody on the other side here is saying they got their tax increased. Thats what youre saying. I want to make one other point before i finish. I want to thank my friend from virginia for his indoor voice. I want to thank you for your indoor voice. I hope the others on that side of the panel will use that as an example, as an example of how we can have a decent discussion back and forth. Thank you for that. Mr. Chairman, im done. Mr. Chairman a point of personal privilege if i might just for a moment. My comments have been a number of folks have referenced comments. I would like to ask one question of mr. Bartold given the fact that my comments have been referenced on a number of times. I want to keep this in a regular order. I know but as a point of personal privilege. The next person up was senator bennett. Might i take 30 seconds from mr. Chairman, i just know that in looking at these charts just for record, 2021 the new version of the bill families earning less than 30,000 a net tax increase of almost 6 billion. According to jct. Thank you. Thank you, mr. Chairman. I will clear this up later, but mr. Bartolds answer to senator warner was very clear that there was a circumstance where theres a tax increase. Look, this is supposed to be a tax bill. It comes on the heels of two attempts to try to repeal the Affordable Care act. The republicans decided to put health care into this bill and the result of that is that at least 13 Million People are going to lose their Health Insurance. Speaking of real life and in real colorado, i was recently this summer in frisco, colorado where i went to visit the Health Clinic there. Its a rural part of our state and i asked what the payer mix at the Health Clinic was. 33 was medicaid. 53 was uncompensated care. I said what . Whats that 53 . And they said those are people that are making too much money to get medicaid but not enough mope to get private insurance. They are in the middle of the middle class and those are the people whose insurance youre taking away with this tax bill. 13 million americans. And the reason it shows up in the tax tables is that youre making it harder and harder for them to be able to afford insurance. With respect to my friend from nevada and i have a lot of admiration for hip, its not true that people arent paying taxes. Theyre paying payroll stamps, theyre paying state and local taxes, sales taxes all of which are regressive, many of which are regressive taxes and you will have an opportunity today to vote for a bill hereing that recognizes that fact, a bill that i have with senator brown and senator casey that would make a profound difference in the lives of working people in this country especially ones that are raising children. You will have a chance to vote for that. So if that is your concern is what ive heard stated today, you will have the chance to express that in this vote. But the tax tables that ive seen and im happy to be proven wrong on this the tax tables that ive seen when you add up the state and local taxes that people pay, the payrolltachs that people pay, its roughfully proportion to what theyre earning. So the idea that there are a bunch of people in the country that are kind of free loading or might have some opportunity to pay more at the bottom i think just is incorrect. I guess i would ask mr. Bartold whether its true that people at this level are paying lots of taxes. I wont even use that characterization are, paying taxes, state and local taxes payroll tax, thats a federal tax. This is a distortion of what i said. I said federal Tax Liability. I didnt say they dont pay federal taxes. I said federal Tax Liability. Youve got to understand. Youve got to understand. I hear you. I appreciate that. Could mr. Bartold, could you answer my question. Sir, certainly, sir. There are many taxes levied at Different Levels of government and at the federal level, we have the income tax, we have payroll taxes. We have some selected excise taxes. Right. And many people particularly low income people purchase gasoline, purchase alcoholic beverages tobacco rods. Thank you. Thats federal Tax Liability. And i guess all i would say is, i enjoyed so much the chance to work with the senator from nevada on our infrastructure subcommittee from this committee. I thank the chairman for putting that together. I really think that what all this reveals this argument that were having today between senator toomey and senator warner and between me and senator all of it suggests to me we should go back to regular order. Lets have a bipartisan approach to reforming our tax code to reforming the corporate rate. To bringing it down. Lets do it together. And lets do it in plain sight of the american people. I think theyd have a lot more confidence in this process if we were doing that especially with the chairman and the Ranking Member leading it than they will have in a process where the numbers change from day to day and the work is done behind closed doors. Mr. Chairman, i yield back 40 seconds of my time. Thanks so much. Well go to senator thune. Thank you, mr. Chairman. And well wind up with senator cantwell. Thank you. Mr. Chairman, and i think that in response to senator from colorados comment, i think in a lot of ways our colleagues on the other side foreclosed that opportunity early on this year by sending a letter stating the conditions under which they would participate in a tax reform bill, many of which were just not feasible. So let me just come back to this question thats been kind of batted around all morning and i think with respect to federal income Tax Liability, the issue has been raised by senator cornyn, raised by senator heller, as well that if you have an individual with the income characteristics that was described earlier, that person would not have a federal income Tax Liability. And i would just ask mr. Bartold, under the chairmans modified mark, the standard deduction goes from what for a single and what for a married filing jointly . Married filing joint goes from present law today 12,700 to 24,000 head of household goes from 9,350 to 18,000. The single goes from i dont have the right number, 6,000 and a couple hundred dollars to 12,000. So youre lifting more and more people, raising the income thresholds at which somebody would have a federal income Tax Liability and then in the chairmans modified mark, what does the Child Tax Credit which is a thousand dollars per child today go to under the chairmans modified mark . It increases to 2,000. 2,000 per child. Per child. Who benefits from a 1,000 increase in the Child Tax Credit distributionly if you look at the Income Distribution table . Well, the increase remember the tax credit reduces Tax Liability so anyone who under who before the Child Tax Credit would have a positive Tax Liability positivetach liability. So thats part of its refundable as under present law. Thats everyone up and down the income level except the area where its phased out which the mark would set at above 500,000. Right. So basically, those two basic changes are going to flow through all the income categories income cohorts that have been talked about and what weve stated as our objective in all this, the desire to lower taxes for middle income families, those changes would in effect make that happen. And then we also are reducing the rates throughout the entire tax structure in a way too that i think also helps or in many ways impacts those same income cohorts. Would that be right . They would also benefit from the rate reductions that are occurring under the chairmans modified mark . The mark maintains the 10 bracket and then lowers brackets above that by having 12 instead of 15, 24 instead of 25, et cetera. So basically, i mean, everything that the charps modified mark does should should accrue to people who are in those middle income categories, those middle income families that have been the principal beneficiaries as has been our intention with this legislation all along. So it is hard to understand why our colleagues on the other side somehow think that theyre not going to benefit from this. People in the lower income thresh holes we talked about earlier who dont have a Tax Liability, income Tax Liability federally cant raise taxes on people who dont have a federal income Tax Liability. And thats for single mom, as was suggested earlier with a couple kids in the 30,000 to 33,000 range. So its hard to argue taxes will go up in somebody in those income categories if thats all true and thats all true under the chairmans modified mark. I guess i look at the distribution tables that have been distributed based upon the initial proposal, the chairmans modified mark, and if you look at who bears the tax burden when this is all said and done, its very similar today. In fact, people over a Million Dollars as far as i can tell, in most cases their actually share of taxes paid burden of taxation in this country is higher than it is today. So people over the socalled rich, the people in that income category are going to pay more as a percentage of total tax burden than they pay today. So it seems to me that the chairmans modified mark accomplishes the objectives that it set out to accomplish and that is to deliver meaningful tax relief to middle income families all across those middle income families. I hope we can get on with it and vote on some amendments. Lets move this legislation forward and bring much needed relief to middle income families in this country. Thank you, mr. Chairman. I appreciate the distinguished senators comments because thats true. Were going to wind up here with senator cantwell. A votes already been called. Shell finish it off and then were going to recess until 2 30. Thank you, mr. Chairman. And i wish any, ill talk the opportunity even though this is a very important subject and i know we have a vote thats down to one minute on floor. Mr. Bart oeld, the mark repeals that specifies that oil based income are subject to the current taxation. Is that correct. Thats correct, senator cantwell. How much revenue does this provision lose, this break . How much revenue. Ill have to look it up on our table. Its somewherearound 3. 9 billion over ten. If thats what we reported in jcx57, i agree. So the foreign your comments are that the foreign based Company Income consists of personal holding Company Income which includes passive income such as dividends, interest, rent, riots, of income, business operations, foreignbased Company Sales income, foreign based services, foreign based companies or related income. Are there any other categories of foreign based income repealed in this mark in addition to Oil Companies . No, senator. Okay. So why are we assuming a revenue loss for this provision . Does jcta believe that the oil Company Revenue will not be captured by the marks current inclusion of global and tangible low taxed income . Does drilling a well not create a global local tax intangible income. Well, drilling would be the necessarily create global intangible low attached income senator. The estimates provided here reflect a lot of interaction between the different the different provisions. So i will have to ill have to provide you, i dont want to waste your time by floundering here. I will ill provide a more detailed explanation to you separately if thats all right. I think the question here is that currently law was initially enacted to combat any kind of tax haven for these kinds of operations. So the Committee Report from which this provision was enacted state because of complex structures, oil income is particularly suited to tax haven type activities. The net result is that Petroleum Companies have paid little or no u. S. Tax on their foreign subsidiary operations despite their extremely high revenue. So if we repeal that provision, will there be foreign based oil revenues that will never be taxed by the United States . Will we be creating a new tax haven opportunity for Oil Companies . So my concern here is understanding why Oil Companies get a special deal on this. I think our colleagues would say oh, no, no, this is about this larger repatriation, but if it is why do we have to give this additionaltach break to them and what haven are we creating by doing that . So you can take the time and come back to us but thats the concern i have with this provision. And its very costly provision. Its nearly 4 billion. So its a big cost and really want to understand the difference for Oil Companies versus other companies. Thank you, mr. Chairman. Ill provide you a more detailed answer. Thank you, senator. We are going to stand, the committee will stand in recess until 2 30 this afternoon. Well resume. So as you heard the Senate Finance committee taking a break in this fourth day of reviewing the republicans tam plan. Theyll be back at 2 30 eastern. Well have live coverage here on cspan3. If you missed any coverage, you can see it on our website cspan. Org, type tax reform in the search bar. While we wait for the senators to return to continue their deliberations well take you back to earlier today to hear from some of the senators as they got this markup session today started. The committee will come to order. Today were going to were going to continue our consideration confident chairmans mark as modified to the tax cuts and jobs act. Having balked through both the mark and nod modification with extensive questioning and discussion of anticipates last night, admittedly things were a little chaotic at the outset and i know some tensions ran high. Were going to improve the process and communication today and hopefully make things move a little more smoothly. With that issue addressed id