The term unborn child. If parents want to save for their childrens future expenses can they open five to nine accounts in their own name and then transfer the account to their child once their child is born . Yes, you can. Hu i have done research and found the only place the appear as itchild is in laws relating to crime in emergency medical procedures for pregnant women. So does the term unborn child apparently where in the tax code . Not presently a new Internal Revenue tax code will stop so what happens if a woman has openness in the name of her unborn child and she subsequently ms. Carries. Would she be required to submit notice to the irs . Would she be committing fraud if the child was no longer in uterus in a stage of development in the womb . Moment. Step back a under present law, 529 laws are creatures of the state and governed by how the state has subject the plan to federal overlay. Under present law, if there is a death, the treatment of a plan where a beneficiary has died may vary from state to state. It would be i understand. I would like to enter into the record from november 2 of this a quote. Insertion of this language has nothing to do with College Savings accounts. This is an attempt by antiabortion advocates to reidentify personhood but in the tax code. Language is ahe small increment and the momentum we are building to ensure that one day every child is welcomed and protected under the law. The antiabortion group march for life when even further saying the proposed plan is a hugely forward for an antiquated tax the and we hope this is first step in expanding the tax code to include unborn children as well. It is this kind of dangerous language appearing in other areas of law, it could have andreaching implications ultimately inclusive of this language is another attempt to bar womens constitutional right to abortion but in this time it is under the guise of changing our tax code. This bill eliminates the deduction for state and local income taxes paid on wages, correct . Action is, it does. Chu isnt it true that this allows owners of passthrough entities to detect deduct portions attributable to their is this . Yes. Drag so a private Equity Partner aceiving shares could receive federal deduction for income tax paid by a janitor at the same private equity firm would not receive a deduction for the state and local income taxes he paid . I believe under the legislation it is generally incorrect because financial fromces would be precluded maximum rate of passthrough treatment. It is treated as ordinary income and income taxes attributable to that i think under the legislation would not be deductible. A passthrough still gets to . Educt income taxes, correct attributable to business income. Right, that is what i am talking about. This is the height of hypocrisy to not allow individuals to deduct their income taxes while allowing businesses to do the same. Arer. Buchanan, you recognized. Mr. Buchanan thank you. I want to talk about the idea of deficits. 2. 3 trillion in the next year and a half. Everybody has a reason they run for congress. The year i got here, it was 130 billion. If you look at the last 10 years it is 10 trillion dollars. When i got here it was 8. 7 train dollars running a evans said. I mean 8. 3 train dollars debt. Mean 8. 3 all year i trillion dollars debt. We have a accumulated 10 trillion dollars. We have had a 10 trillion stimulus. There is plenty of blame to go around. In 50 years have only balanced the budget five times. There is plenty of blame to go around. The point i am trying to make is maybe there is a way we can do you know on average what the growth rate for america was average per year the last 10 years . I am sorry mr. Buchanan, would have to look it up. 1. 5. Never got to two. Probably the slowest growing in 10 years. To continue doing what we have been doing does not make sense. And business i always think, you either grow or you die. That is why so many people have not gotten a pay raise in 10 years. Our economy has not grown. You know if we grow the economy, 1 with this tax plan in the next 10 years, what that means in terms of Economic Growth . Mr. Barthold i believe the congressional Legend Office growth projection is one. 5 , so you would be talking about an annual growth rate of real gdp of 3 . What does the extra 1 mean . H radel economy, and 8 trillion omy it was 2. 8 trillion. I will give you the math. You might be right on that. They were saying 1 growth. That is what we clearly need to do because what we have been doing does not work. So mayson why in my mind people are coming before us is because of two things. Oil is down. The business 40 years before i got here, my kids are there today. I can tell you, a lot of our Business People who are looking to get into business are relocating to florida and part of it is leadership. They are open for business. The second thing is, they are a lowtax state. They are always looking for ways they can lower the taxes. Everys why so many people single day from the midwest or northeast are moving there, simply because of the taxation difference and that is why this bill is so important going forward. I want to touch on the individual rate to make sure you understand what you said. A19, the middle class gets tax cut . Is that what . I said the , 2019, allovided categories receive a tax cut. In terms of Small Businesses, what does expensing do . I mean, how much is that going to help the Small Business guy . Most make 100,000 or less. 90 of them. I used to chair the florida chamber. 100,000 gourmet club that they can write off, that has to be a gigantic opportunity for them to grow their business and great jobs, wouldnt you agree . Eggs yes, sir. Yes, sir. I will clarify, the expansion is from a under current law, expensing 500,000 worth of equipment versus expensing 5 million worth of equipment. We have got to turbocharge this economy. I think this will implode the growth in terms of america. If get america back in the business of business. Thank you, mr. Chairman. Thank you mr. Buchanan. Thank you mr. Chairman. And thank you mr. Barthold for being here. I was listening today and i feel a little bit bad for you. I know it is strange, isnt it . But, you know, a lot of people raise their voices at you and make political speeches is one really your role here today is to answer questions about the legislative tax in front of us. So i appreciate you being here and doing that for us because we want to make the best decision for families and the best decision for america so that we can growth the economy which basically means when you grow the economy, you raise wages, get more jobs in the country, people up options. Home was the last time you had worked on a bill of this size that was doing reform of the size . You been in your position for how long . Mr. Barthold i have been chief of staff since 2009. Have you had a bill of the sizes you been in your position . Mr. Barthold, the American Investment in recovery act was substantial but this will be mr. Barthold the American Investment in and recover act was substantial but this will be larger. It was interesting for me to hear some of my colleagues say this bill was written in the dark of night because i remember clearly over a dozen formal hearings on tax reform i have been a part of in this committee. Ive also heard my colleagues speak about not having will the lady yield ive been in several meetings that were bipartisan will the lady yield gentlelady, thank you. I wanted to ask you for some clarification on the Child Tax Credit gentlelady i have spent a lot of time working on Child Tax Credit. The change to the family tax credit has been very important to me that we get right. I wanted you to tell me a little bit about the demographics of the millions of people that would benefit from raising the 1000, 60 credit from up to 1600 per child and then we also at credits for the taxpayers and adult dependents as well. But what does that mean . What do the demographics of the family that would benefit from that Child Tax Credit of 1500 us this bill first of all, the Child Tax Credit has expanded and its 1000 up to 1600 dollars. Under present law, the Child Tax Credit is phased out beginning at 110,000 adjusted gross single return. 4 for those people who retained the single benefit, the child 600redit is increased by per child. The legislation before you also raises the phaseout point of the Child Tax Credit up to 230,000 or 115,000 for single files so that means if you have can you pull that microphone and a little closer to you . I think you have to raise the microphone volume. I think you can pull it closer. I am sorryd members, i was explaining that the legislation also increases the phaseout. The beginning of the phaseout tax credit. Child for example, under present law, nt filers so many more families will qualify . 115,000,ld so 230,000 will now get credit. That will be the profile of the family that will now benefit. For those that claim the child credit presently, 600 increase, for a number of families, of the0 and 200 30,000 gross income. Potentially an allnew and if it of 1600. Ask how will this benefit families that have three or more kids . Rides it is as numbers times three or four or more. So the benefit grows. I appreciate that focus on families and strong families. We want them to be able to provide strong futures for their families as well. The bipartisan feedback has been put into this. I yield back. Mr. Chairman. I am so excited to be here to remark on initiating our tax reform plan. Tax cuts and jobs act. Lot. He title means a tax cuts. Too often i think we focus too much on just where the tax cuts are going. That is not my primary goal. My primary goal is to restore our country is a land of opportunity. Barthold, your distribution analysis, correct me if i am wrong, but doesnt it say that every19 and 2021 that sees a tax cut . Is that correct . That is correct. 2025 there 2023 in is a small tax increase and then it comes back down in 2027. Inside correct . That is correct. To back that up to back that up, the Washington Post said to take some Democratic Senators that quartile wouldme receive a tax cut. That in fact, 23. 5 percent would receive a tax cut. Thatthen they throw on to saying that every income quintile would receive a tax cut. So we have pretty good reference material. If you count the Washington Post, every income quintile will receive a tax cut. So get beyond that. The most important thing to me is work, because i think that is how you restore American Opportunity. Mr. Barthold, you probably have numbers in front of you. Would it surprise you, mr. Barthold, to know that in 1990 well let me step back. In 1986, the tax reform cut was competitive with the world. And since then, we stood by while other countries make their tax cuts more competitive. Then in 1990, in inflation, just to dollars, the middle class dollars persand year. That surprise you, mr. Barthold . Know you are probably not born with a 1986 tax cut came out. I joined the staff after the 1980 six act. Would it surprise you the middle class was making 54,000 a year and 1990 . In 2017, if we went back, guess there has not been substantial growth in median Family Income of the last two decades. So i would not be surprised. That is my point exactly. The middle class has not had a raise since 1990, for goodness sake. And mr. Barthold, would it surprise you that according to the Census Bureau in 1990, the thele class made up 47 of population. Excuse me, 37 . Excuse me, 47 and today it makes up 43 . With that surprise you, mr. Barthold . Mr. Barthold mr. Rice, im actually confused. Mr. Rice this is according to the Census Bureau. They said in 1990, the middle class made up 47 of the American Population and today it makes up 33 . My point inc. That since 1990, the middle class as shrunk and it has not had a raise in 27 years. I am looking for growth and opportunity. This tax plan, and i know you have the joint committee on tax, but with rate reductions and with expensing, would you expect mr. Barthold . Mr. Barthold as i noted earlier, there are a number of provisions that are clearly progrowth. There are other considerations to consider. I dont want to prejudge the analysis. Well it is said it will increase gdp growth by 24 . I have had estimates as high as my time is expired. Thank you mr. Chairman. I am juggling these coffee cups. Just a handful of quick things. I want to make sure im getting my head around and then i thought it would be appropriate. Hare sort of a personal legislationeform were to become law today is written, you see only 6 of americans having to itemize anymore. That would be our projection for next year, that is correct. So, 94 of americans would be just using the standardized deduction. That is correct. Have you ever taken a quick look to see, with that actually changed Tax Compliance because of it becoming so dramatically simpler for so many people . Actually, compliance is part of all of our estimates. So, some of the changes would be note there has been compliance, reporting of charitable reductions for example. And other miscellaneous itemized expenses said there would clearly be summoned those areas. It would be interesting as you start to do your growth modeling, to sort of see the breakout. We may gain some revenues from compliance. The estimate you have before you today or what we would call conventional estimates that tries to account for compliance gains. Mr. Barthold, in your mind, will you also take a look at payroll taxes . Foundations and their models that was published on friday had almost 300 billion additional payroll taxes. Will that be something you will also look at . We analyze payroll taxes for the committee as part of this analysis in terms of what happens in terms of onbudget and offbudget effects. I assumed the analysis of the Tax Foundation youre referring to as may projection of wage growth, generally subject to payroll taxes and taxemployment tax and fica if that is what they are reporting. Likewise, we would report increase in labor income as part of our analysis. Tracks would you agree some of that will be sensitive to the expansion of the economy . If wages increase. If labor force increases, you would see affects of the sort you just mentioned. Might understanding in some of the modeling you have done in the past on the static side where you used cbo cost gdp calculator. I think the cbo was coming back saying in the next 10 years expected 1. 89 gdp growth per year. Estimates start by making comparison to the cbo macroeconomic baseline. We dont use any sort of cbo calculator. Presenteds of what we to you over the past couple of days, how would things change relative to that baseline before trying to assess the growth rate change. None of that baseline changes in the numbers you produced . That is correct. Look, this is less of a question probably closer to a statement, many of us have an absolute fixation in a great bubble the death entitlement crisis just on the horizon. Whether it be some of the models someblowup in 18 years, longer, some less, the fact of the matter is we are going to spend about 50 trillion over the next decade. Spansion,economic change and Economic Growth, moving away from 1. 8 nine gdp growth to if you could get to 3 and have expansion of another 2. 8 train dollars and the size of the economy. Trillion dollars in the size of the economy. If you care about retirement, if you care about your brothers and sisters, care about people being able to save in finance and have resources for education, we are in incredible trouble. This becomesern is defending the status quo or defending an opportunity to grow. I yield back, mr. Chairman. Thank you mr. Chairman. Mr. Barthold, thank you for being so patient with us. Im excited. We content about tax reform a job creation but something just as important i hear about from is heading ready for these jobs and in flux. However as it stands now,. Amilies face a maze isnt it true there are 15 different tax incentives related to education . Reince yes, it is. Do families tend to use these aswan or in combination . Some are incentives to save for future expenses. Some are incentives to pay for past expenses. Some are incentives for current expenses. So, it is reasonable that many taxpayers may use multiple provisions. So is it paramount to figure out which incentives are right . They might turn to an irs publication which it finds the incentive. Are you familiar with how my pages that little document contains . Im afraid im not. Can i give you that information . I can look it up but i do not know. It is 95 pages. We have Everything Else to worry about, you should not have to sit down and wade through 95 pages to figure out or hiren benefits somebody. Can you explain why the education tax benefits and hrone in the new provisions as i noted in the overview, every americanaw opportunity tax credit and the lifetime tax credit and there is also currently expired and there has been of the past couple years a tuition deduction tax credit. These are all tax benefits related to current outlays for education. Hrone would repeal the lifetime learning tax credit. It keeps repeal the deduction tuition. It would say that for current expenses, theres just the American Opportunity tax credit. It would expand the American Opportunity tax credit to pick up some of the purpose of the lifetime learning credit. Claim tuitiono expenses for more than four years. Expansion is to provide a fifth year. So thosea tradeoff three concepts are collapsed into one. In terms of saving incentives, i know we covered an account basically repealed with balances. Ransferred hrone would keep the 529 program. Eliminate the covered program, so to the extent there was overlap there it would repeal the exclusion for the interest and special bond savings bonds related. It would just repeal that out right. I appreciate that. I am going to assume that irs publication 970 as much shorter. Delineation ofhe the tax credits that are indeed rolling in, making it easier for families to claim benefits. Thank you for your insight. I yie