, i want to say a few words about some of what has been said thus far. My democratic colleagues always professed to be the champions of middleclass families. We see that rhetoric in full bloom, on full display today. That is why it is astonishing to atthat they are so opposed the repeal of the individual mandate tax. They talk as though everything is fine with our health care system. And that the repeal of this taxable said it all tumbling down. Obamacare is already failing. Largely because the mandate has failed to do what it was designed to do. It has not improved markets. It has not brought down premiums. Markets are in decline. Premiums continually rise, despite the presence of this tax. The great irony of obamacare is that on one hand it makes Health Insurance too expensive for many to afford, while on the other hand it imposes a tax on those who do not buy it. The mandate has not improved the health care system. It has imposed significant burdens on middleclass and low income families. This tax is one of the most regressive taxes in the entire Internal Revenue code. 80 ofng to the irs, american households who paid the makeidual mandate penalty less than 50,000 per year. Tax for nothe 2. 5 ofng insurance is household income, or 695 per adult. Whichever is greater. Up to 2085. Highcare premiums are so that millions of americans had to pay thousands of dollars more for coverage that does not fit their needs. Contrary to what many of my democratic colleagues have claimed, the most recent analysis from cbo on repeal of the individual mandate does not herald the collapse of our health care system. , and i am going from the most recent analysis, if the mandate tax work to be repealed, quote nongroup Insurance Markets would continue to be stable in almost all areas of the country throughout the coming decade. Lets not distort figures. Lets tone down the rhetoric a little bit. Let us be clear. Repealing the tax is not take anyones Health Insurance away. No one would lose access to care it to coverage. Enrollthey chose not to in Health Coverage once the penalty for doing so is no longer in effect. No one would be kicked off of medicaid. Theye would lose insurance are currently getting from insurance carriers. Nothing. Market in the modified impacts obamacare policies like coverage or preexisting conditions, or restrictions against lifetime limits on coverage. I hope people will stop with the tacticsactics scared that we have heard so far. The martin repeals an extremely regressive tax. Why do we do this . It seems logical to me. To cut taxes for those families is a good idea. That is what we have done here. We are doubling the Child Tax Credit from the current 1000 to 2000. We allowing more middleclass parents to claim the credit. We allowing tax rates for middle income americans. We are making changes to the business tax system that have long been supported by democrats , including most members of this committee. What are we doing . Hasember of this committee supported significant reductions in the Corporate Tax rate, or the corporate rate, or cosponsored bills to that effect , should now sit here castigating republicans for supporting a giveaway to corporate america. If lowering the corporate rate is a giveaway to multinational corporations, then it is curious that the minority leader has written in support of lowering the rate, and and in a committee report, democrats on this committee seem to agree. All of us know that our corporate rates are too high. Our tech system does not work for Small Business owners. Our plan is sensible. It is not supplyside or trickle down. All of you heard a little while ago from the chief of staff of middle earners get a larger tax cut than those that top of the scale. I have some quick questions i would like to ask. Does the modified mark reduce rates for middle income households . Yes, it does. Should i make an Opening Statement before questions . I thought we were making Opening Statements. It thisust going to do way, then i will turn to you. My second question i have to get out of the way. Mark lower rates for Single Parents in income brackets . Yes, it lowers the rates for its Single Parents in the lower brackets. Does the mark increase the Child Tax Credit . Yes, it doubles the tax credit from 1000 to 2000. Does it increase the Child Tax Credit . Inflation,es it to and increases it from 1000 under current law to 1100. Makees the modified mark the Child Tax Credit available to more families, and if it does how so . It does in two ways. It increases the age of the child that qualifies to receive the Child Tax Credit, from under 17 to under 18. And next, it increases the income limitation so that more middleclass families can get the benefit of the Child Tax Credit. Does the modified mark make the refundable part of the Child Tax Credit available to more families, and if it does so, how . Current law requires a wage threshold. You have to make more than 3000 to claim the refundable portion of the credit. The modified mark reduces that to 2500. Sen. Hatch thank you. I want to get those questions out of the way so we know where we are coming from. I apologize to my Ranking Member for having done so. I felt that was essential. I turned to the Ranking Member. Den i have an Opening Statement and questions of my own. We dont have distribution analysis that supports what the chairman just got into. As such a distribution analysis exists from jcp . We prepared a distribution analysis. We are working on preparing an updated analysis to reflect the changes. En there is no distribution analysis for the bill that is the bill before us. I appreciate you clarifying it. Sen. Hatch that isnt what he said. Sen. Wyden it is what he said. He said he is going to have to do another version, what he calls an updated version for the modified mark. I am glad we got into that. You are surprised that we oppose your backdoor effort to get rid of the Affordable Care act. I have to tell you, i am surprised that you and your colleagues do not care about the 13 Million People who are going to lose coverage, and the 10 million more who are going to see their premiums go up because you are not going to have as many Healthy People in the risk tool. As we learned today, my colleague from an ohio went through how some middle last people that he represents would get a few hundred bucks in terms of it tax, and lose it all and more in terms of the increase and her Health Insurance premiums. What this all caps two, and im going to ask my questions about has ais that your bill double standard in terms of taxes in america. Folks in the multinational corporations, their brakes are permanent. A lot of them are more a check. F to dupe is this overseas the folks that are middleclass, their brakes are temporary. Used, as the majority leader said in the last day, the temporary middleclass tax cuts are what makes this possible for the multinational corporations to get permanent tax cuts. That is not my analysis. Those of the comments made by the republican leaders. Now im going to begin my questions. I want to talk about what happened yesterday. Yesterday, secretary mnuchin made a visit to ohio, and in effect he said that the administration was drawing a line in the sand with respect to the tax proposal and the massive handout to multinational corporations permanent. That is what the secretary said yesterday. You are here from the administration, and i have heard , i assume since you are at the Treasury Department would know the answer to this. Has the administration drawn any lines in the sand to say that tax cuts for families would be permanent as well . That is a yes or no answer. Sen. Hatch you know they cant do that. That is a funny question. Sen. Wyden mr. Chairman, i do not think it is funny at all. I will ask my questions. I cannot answer the question as the position of the Treasury Department on these provisions. Sen. Wyden why are you here . It here to assist the if you have questions i would be happy to assist. Sen. Wyden it is hard to get into administrative feasibility if you do not know where the administration is headed. In other words, we now know where they are headed with respect to permanent breaks for multinationals. We do not know where they are headed with respect to families. Other than the majority leader has said that we are going to make the families tax breaks temporary in order to make permanent the brakes for the folks at the top. Us some sense and respect to joint taxes the new bill, and we do have that, that the expiration of the tax cuts for the middle class pay for the permanent rate. Eductions for corporations it looks to me like the individual tax title raises money overall, while the corporate title loses. Is that correct . Sen. Wyden i assume youre referring to the revenue table. Total of the individual three. On page are you looking at the last year, or the line total . Sen. Wyden the total. The way we see it, the expiration of tax cuts for the middle class pays for the permanent rate reduction of the multinational corporations. You are looking at the last year, 2027 . Yes. Sen. Wyden we have established that, colleagues. Now we know with the majority leaders agenda is, but it is confirmed by joint taxes analysis. I think this sounds worse than the bush tax cuts. Families and Small Businesses could end up worse. They could end up falling further behind. I think the remaining question a big part of, what we wanted to do is real tax reform. That was a part of the 2015 tax focus. It had permanent changes. We combined and came up with a good bill. With thextent chairmans tax plan bring back and need for tax extender bills . And going back to the old days, and the fact we did not have reform, we kind of lurched from one change to another without providing the certainty and predictability for our middleclass or businesses. The chairmans mark is modified, when sunset all of the individual title items as i noted in the walkthrough, except for the inflation indexing. The underlying mark provides for 100 bonus depreciation for five years. A twoyearation adds temporary provision related to alcohol excise taxes, and has a twoyear temporary provision forted to employer credits paid family and medical leave. Sen. Wyden my time is about to expire. It seems to me we have the opposite of tax reform. We had a crazy quilt of provisions, some are permanent, some are temporary. , and i thinkl us it would be important to furnish this before we start voting at some point. Can you tell us how this affects businesses and small and corporations are you able to do that at this point . We discussed a number of those issues. Im not quite sure of the specifics of your question. Sen. Wyden the senators have to vote on this. Weve got this crazy quilt. How does this affect individuals, particularly pass through Small Businesses and corporations. We would like to see that on a piece of paper. How does it affect those key constituents that we represent . Said when we do our updated distribution analysis, we had the presenting a breakout between individual tax provisions which counts the , and Business Base provisions. Sen. Wyden when would we be able to get that . Before we start voting . When are you starting voting . Sen. Wyden we are to ask more questions. I am over my time. Ere we are looking at voting i described how we are going back to yesteryear, instead of having permanent tax reform, we will have some stuff temporary, and some stuff imminent. We have already explained the inequity for families versus multinational corporations. Now we do not even have the specifics how this would affect individuals and passthroughs and multinational corporations. We are not angry at you mr. Barthold. You have a challenging job to be make tax changes that are being made on the fly. We would like if you can furnish that before the vote. I allow the democrat leader to go over. From here on out, we will stop at five minutes. Everybody wants to participate. Senator grassley. Grassley would you tell us if the Corporate Tax rate reduction were not permanent how would that affect business behavior in the six years from now . The economic incentives to invest in the analysis we have aftertaxs driven by returns from investment. Investment has its returns over a long. Of time. Long period in five or six years from now, if you were at 2022 youll be thinking if i make an investment into a factory or facility, you would be earning your income over the subsequent years. You would be looking at higher tax rates after the sunset that you proposed. That would diminish what you would see as a possible return from your investment. It should diminish investment incentives. If it is not made permanent, would it nullify the benefit that comes in the first part of the 10 years . To undertaking our macroeconomic analysis of having the loss of some of the investment incentives because they are temporary would diminish potential investment, potential growth you might get in this decade. Sen. Grassley mr. Chairman, im going to reserve my three minutes. That takes care of it for now. Stabenow. senator stabenow rather than this chaotic process were things change all the time, not getting numbers before we vote, not getting the analysis and 1 6 of the economy, on health care alone, we could be doing this in a bipartisan way. That is what this committee is known for, and it is extremely concerning that that is not what is happening. We talked a lot about the 13 Million People that will lose Health Insurance coverage. In fact, it is 13 Million People. The idea that nobody will, if nobody would lose insurance, and there would not be 400 billion available to spend on making the multinational Corporate Tax cuts permanent. The whole idea of the fact that now changes can be made is because somebody loses something. That is called health care. 13 Million People. Spending about 400 billion less , that is how they get the money. On the other hand, not having enough money to extend anything for middleclass families beyond 2025. But when we look at the health care piece, one of my constituents was born with type one diabetes as a child. Insurance companies refuse to cover her. She was stretching out three days worth of medication to five days to save money. I have heard this over and over again. Care act affordable she got coverage and the medications that she needs. Ask, under this bill, there could be an increase of 10 , is that right . Is theink that understanding from what the cbo has analyzed. There would be people all across the country forced to pay more for their medicine, more for their insurance . Yes, according to what the cbo has reported. Sen. Stabenow that is going to happen to people all over this country. When you are faced with that you have a couple options. You pay more for your insurance, or lose your insurance altogether. Is there anything in this bill that brings down the cost of premiums . I may have my colleague said that in. I may have my colleague sub in. Is there anything to bring down premiums . No, the repeal of the individual mandate will raise the cost of premiums. Sen. Stabenow is there anything to reduce outofpocket costs . No. Sen. Stabenow is there anything to bring down drug costs . No. Sen. Stabenow is there anything that would help people with preexisting conditions western mark with preexisting conditions . No. Sen. Stabenow i think it is clear they want to pay for tax cuts for multinational corporations. Now i want to talk about the mortgage deduction and homes. Michigan is a state where we have a lot of people that have their primary residence. They have a cottage on the lake. Hunting season is opening and a lot of people in michigan are going up to the hunting cabin. About, would this bill allow families to detect their mortgage on second homes . Yes, it does. The only modification that the chairmans mark has modified makes to the Home Mortgage interest induction is to eliminate the home equity loans. But not a mortgage related to a second residence. Sen. Stabenow does the house bill . The house bill would eliminate the Mortgage Rate deduction with respect to second homes and home equity loans, and also with low lower the present lot 1 million acquisition mortgage limitation to a 500,000. Sen. Stabenow it significantly limits that. That is the house bill. Sen. Stabenow correct. We have to see where that ends up. Any idea where the administration would be on the markers mortgage and equity loans . A lot of people are using those to send the kids to college. Im sorry, senator. Thank you mr. Chairman. I am tried to understand this bill. I got it thursday night. I had concerns about middle income families not being treated fairly with tax relief going to high income, and increasing the deficit by 1. 5 trillion and probably much more. And i take a look at the modified market we got late last night, and these circumstances seem to be even worse. I have commented on this, but by making the individual tax issues temporary, but making the business tax issues permanent, we have made it worse for middle income families. And we made it worse for the deficit, because we now have extenders, big extenders that are going to be in the trillions of dollars. I do not think anybody in this committee expects that we are not going to extend these provisions. But in reality, we do not build to the to the ekimov economic model. It is the worst of all possible worlds. I listened to some of my colleagues give a sympathetic reason for this, saying we are going to provide additional 43 billion tax relief to middle income families. I find it strange because as i understand it, 13 million more americans will be uninsured, and the individual market rates are going to go up by 10 as a result of this provision alone. Middle income families are going to find themselves without insurance, and find her Health Care Costs are increased. Sen. Mccaskill a good point. swant to get mr. Barthold view so i understand it. There is tax relief because we are not collecting the penalty on the mend it, but yet, as i understand it, you have over 300 billion of revenue available as a result of that one present that one provision. That is correct because of behavior in the marketplace. Sen. Cardin behavior in the marketplace, i want to focus on to. They totaled 160 billion in savings. One is the reduced subsidies under the Affordable Care act. Difference theo civic ones. One is the exchange subsidy credit that is available on the purchase of policies through the exchange, and the other is the cost sharing subsidies that are payments to insurance companies. There are income limits as to who can qualify for the relief . Mr. Barthold that is correct. Sen. Cardin were talking about losing 185 billion of subsidies that go to middle income. Amilies 185 billion of subsidies that would otherwise be available for health care. They chose under the mandate their behavior. Then there is 179 billion a in the medicaid subsidies. These are people who qualify for medicaid. Veterans qualify for medicaid. We have that debate on the floor of the United States senate. These individuals right now dont come forward because there is no mandate, and they lose those benefits. That is correct. There is reduction in outlays. Middle income families are getting a lot of conversation, but it is disingenuous to say you are providing 43 lien of relief when youre taking away 300 and 60 billion of benefits. Am i missing something . The analysis you provided on benefits seems accurate. Sen. Cardin let me make a plea here. I do not know what impact this is going to have on the state of maryland. I do know we havent all payer rate structure which is unique. We have a high increase in the uninsured, it is difficult to maintain that program of all payers. These are the consequences of changes that are being contemplated here without having the time for us to even go back to our states to figure out what impact it has. That affects the health care of all marylanders by this one provision. Leaves the process here a lot to be desired, and i am really disappointed. Sen. Hatch i wish it was more perfect myself. We will go to senator enzi. Mr. Chairman, i reserve my time. Address senator stabenows comments. She has been a champion on working on the mortgage issue for a number of years as we had the crisis in 2008. The answers you got were correct, and that was the provisions include both the first and second mortgage, and the limitation combined is a Million Dollars of debt. You know longer will be able to detect interest on a home equity line of credit for a lot of reasons that are right. A lot of that has been abused by people who have mortgages beyond their ability to pay. It is a good responsible proposal. I want to come limit you on the concept of the credit versus the deduction which you came up with and articulated early in this debate. That has a future. Your proposal was intriguing and has legs. I left a meeting with people talking about the credit versus deductions. On behalf of people with have an interest in work on that issue, thank you for what you have done. Time who i yielded my didnt articulate job better than me this morning. I did have something i wanted to say. Issued a pressps release about the tax bill. The president of ups which is homebased in my state of georgia, was that the tax bill in their opinion was going to increase employment, increase jobs, and increase prosperity in america. It were very supportive of it. I want to say when you get down to it as a government, there are only two ways we can increase our revenue. What is to increase the rate of taxation that we charge, which might not materialized and an increase, but it looks better. But the best way to increase prosperity for our citizens, if we incentivize a comic development, growth by corporations, expansion by businesses, they turn that into job creation. As jobs pay taxes, and those taxpayers start Small Businesses. It has a cumulative effect. I know there are. I know there are people who are problems with substance. Some have problems with style. I do commend the committee and the chairman on working hard to provide tax incentives that will. Row our economy and grow the revenue of United States of america the right way, by increasing the prosperity of our citizens first. I yield back the rest. Senator brown. I yield to him now, but he can yield to meet later. Thank you mr. Chairman and my colleague from ohio. I keep thinking why we keep missing each other in this conversation. Concern i is that have on the back shop of our economy that is the context in which we are having this conversation. We have seen over decades a uation where the bottom the top 10 of income earners have now reached the threshold where they are earning more than 50 of the income. The bottom 90 , which is everybody else, is earning less than 50 of the income. That is not the way it was for the entire history of United States. That is where we find ourselves today. With that huge disparity that exists. In that regard, i wanted to ask a few questions. One of my colleagues touting that every income bracket got a tax cut in total under this bill. Is that correct . Mr. Barthold we have not completed the analysis, but as we discussed yesterday, that is correct. Is it true that the 572,000 taxpayers, making 1 million per year and more receive 33 billion in tax cuts in 2019 alone . That is correct as reported. Note for theas i chairman and my colleagues, these tables do not count the impact of the estate tax, which we know goes overwhelmingly to higher income households. Isnt that right . I provided some Supplemental Information yesterday on the estate tax, yes, it is higher income houses. Sen. Bennet i have added out receive in 2019. Do you think the total of these 90 million taxpayers receive, is it more or less than the 572,000 taxpayers with incomes over a Million Dollars . Mr. Barthold we are adding up 100000 and less . Sen. Bennet 50000 and less. I will supply you with the answer which is 13. 3 billion. 500 28 n going to you have 13. 3 billion going to people making 50000 and above. I know you are precise. Reason i am asking, these numbers are so far apart, it is obvious what the result is even at first glance. The 572,000 taxpayers with incomes over 1 million get 2. 5 times as the entire 90 Million People with incomes below 50,000. 2. 5 times what people are getting below 50,000. That does not even include the estate tax. As a student of history, have incomes than growing faster for medium households or for people with incomes over 1 million . I dont know the Million Dollar figure, but most of the data indicates that the households ors of individuals in the top 10 have grown more rapidly than the median households. Sen. Bennet i am grateful for your candor. This is a massive amount of distribution to people in our economy to have been the best, without a distribution, much of a distribution all of the people that are really struggling in this economy. Are thehe wealthier you more income tax you pay. I used to be in the private sector myself. You add up federal taxes, state taxes, local taxes, people at the bottom 20 are benefiting so meagerly from this legislation compared to people at the top. Sharectually pay a larger of their income and estate and local taxes than people in in partncome levels, because of sales tax, because it is so regressive. We are compounding that with this bill. In a world where people cannot afford housing, they cannot afford health care, the canada for help Higher Education or early child education, we are making matters worse for them. Thank you, mr. Chairman. Sen. Hatch thank you. Senator casey. Thank you, mr. Chairman. I want to direct your attention document0 of the titled chairmans modifications. Light ofrticular, in what is in the modified market, as well as what is in the recent Congressional Budget Office report as it relates to the individual, what is referred to on page 10 the aca shared responsibility payment. Deals withon that the repeal, this provision lead to individuals losing their Health Insurance . 13 million will have. It starts at 4 million and increases to 14 million over the decade. Is it possible that some of the people who would lose health would be individuals asisabilities possible. Is it possible they would be children . Yes. That means it could be parents of children who would lose insurance. Is it possible that people who Health Insurance are adults over the age of 50 . Yes. Is it possible that would be individuals struggling with Substance Use disorders . Yes. The overall impact is fairly obvious. What may not be as evident is andtime within you have had others have had review the bill overall but in particular, 82 provisions. I had questions any new provisions. I have questions with regard to the time it takes to review the impact. He indicated the analysis was not complete. That is all the questions i have. Thank you for your accommodation. I thought senator bennetts numbers were astounding how much this goes to the wealthy. Secretary mnuchin and speaker ryan and senator to me have stated tax cuts will pay for themselves through growth. That has never been the argument of the original supplysiders including bruce bartlett. He stated a month or so ago there is no evidence that a tax cut would spur growth. He freely admitted the original supplysiders have said permanent tax cuts at best recover one quart one quarter of revenue lost. If the finding consistent with the evidence of past tax cuts . His findings recovering one quarter of the lost revenue. Therek there is a is a range of responses but it is generally quite low. Generally under 2530 . Correct the same question tax reform in the 60s. The 81 tax cut. Same answer. Yes. A lot depends on how the tax cuts are designed. Generally the response is nowhere near 100 replacement of the funds expended. 2003. 2001, these were across the board. Reductions in rates and expansion of credit. The Child Tax Credit was expended. Much what they did to stimulate the economy, they did not pay for themselves. A number of studies show the opposite. Secretary mnuchin seems to think it. His specialty is banking and or closures. Chairman brady is saying it. Speaker ryan says it. A number of people of people in this committee seem to think it even though the gurus of their Economic School say at best no cuts n 2530 of tax the lost revenue is made up. Let me take a slightly different tax. Takesw the tax bill Health Insurance away from 13 million americans. Story does not end there. It also forces direct cuts to medicare. Yesterday the director of the cbo provided congress with this letter stating the government would be required to order 25 billion in cuts to medicare. Understanding. Passage also sold in billions of dollars of immediate cuts to medicare for it it not subsequently waived. It does not stop medicare so security is next again. Texasentative brady of says that House Republicans would soon turn towards welfare reform. Cuts,ldstein said the tax only one quarter of the increased deficit will be made up for by growth. For by raisingid the eligibility for Social Security so that a part a barber or construction worker or manufacturing worker in jackson, ohio would have to work until they are 70 years old. That the nextaid item on the republican agenda was cutting social insurance. My question is for the chairman of the committee. For chairman hatch. I want to be reassured that if we pass this bill and below a bigger hole in the deficit this congress is not going to come raisend say we have to the eligibility age, cut medicare, go after education. I want assurance. My question for you, is entitlement reform the next item on your agenda . It is clear there is going to be question, is entitlement reform the next item on your agenda . Deficit andis a that happens it very well could. Thats what congress is for. We will. It seems to me that we should go into this with wide eyes wide open. People who are experts. Martin feldstein. So many have said it is almost certain. History shows the evidence this will increase the deficit. You only grow 25 of this whole. My question is entitlement reform a big part of the way . Raising social age . Dont think so. Nobody can predict the future. We know one thing. The continual spending of our Democrat Friends is putting us in even deeper debt than it now. I would like to solve this problem. I would like to have entitlement programs i heard senator bennett say this morning that when president clinton did his deal that no democrats voted for, my first year in the house, we built this huge trillion dollar surplus and did tax cuts and war and its blue is up. Blew it up. Fiscal policies like this when you cut taxes on the wealthy the deficit goes up and the Economic Growth is not what senator toomey said. Speaker ryan, chairman brady. They said Economic Growth is not up for debate. We cannot keep spending and that is what that is what we have been doing for the past 40 years. Lets go to the next person on the list. Thank you. As a point of parliament for inquiry, thank you for the list. I have started to go through the list and look at the amendments. I noticed that one example of an amendment was added. Tosays provide credit employers for family leave with no other information. Is there some place i can go to find out how much that is and who gets it . Does anybody know . That is the summary and i dont know anything more than that. Ok. There is one that talks about credit for domestic manufacturers to ive only gotten through the first 10, most of these amendments there is a brief description and then it says offsets to be determined. Have you determined the offsets . Mr. Chairman, im trying to decide how to vote. You put all of this in the bill. I just want to know what it is. It is not here. Senator cornyn, it is not here. I got this a half hour ago and im dizzy going through this giant book trying to find it works this is all in the summary. I would ask them. Or all of these amendments in your summary . Yes. Particular one about be paid for family leave is on page 41 and 42 do you have any idea how much they cost . Not anoffset there is offset per se that is part about provision. Providedue table we shows what provisions raise revenue and what provisions lose revenue relative to baseline. The family paid leave credit loses revenue but there were provisions this morning that raised revenue. Thee were the changes to research expenditure. Of change for the treatment meals provided for the convenience of the employer and a number of other things. Isnt going to be possible to have time that i could actually read the 100 pages since we got it 10 30 last night . Could we have one hour to read it . With the possible . To get one hour before we start amendments . To read the summary . Im asking for one hour to read 100 pages. You had it since last night. I was asleep at 10 30 last night. I was asleep. Others are asking, maybe you had better go read it. Let me ask i dont mean to sound uncooperative. \ i understand. I appreciate that. I take this really seriously. We have to move ahead. It is taking a lot of time. We have the top experts in the country right here helping us. Caps towe have all prepare ourselves as best we can. By the way i love your cardinal red tie. Have you all reached an agreement as to whether or not the w2 age limitation can be aggregated . There is a disagreement about the aggregation about the wage limit. The test his business by business under the modification in our understanding. So they will not be aggregated . Not for testing purposes. Foro every different llc Real Estate Developers would be different . They would be tested by the wages paid in that llc. If one had a larger payroll than the other, it would be different for the one enterprise than the other. Passthrough changes on the w2 wage limitation . Admittedly i have not had time to read the 100 pages. The changes in the in to withn went three different dimensions. There was no limitation based on wages in the case of sole proprietorship. The modification extends the limitation based on rages wages. Limitation based on wages, now there is limitation. Mark, it original appliedaS Corporations regardless of any other factor. In the modification there is no limitation based on wages if the owner has a taxable income less dollars ousand 500,000. Also a point that we discussed provider about Service Enterprise inns. Said thosel mark had enterprises were excluded unless the owner, service provider, had a taxable income less than 150,000. That sotion changes that Service Providers claim the full benefit a lot to. Thaneir income is less 500,000. It expands the number of Service Enterprises, take they take advantage of the modification. For soleens a rule proprietors. By putting wage limitation on. It relaxes the rule on wage limitations for S Corporation partnerships. I have a lot more questions you i know my time is up to just want to say i have a lot more question on passthroughs. If anybody thinks we have made this simpler for 95 of the businesses in america, they have to wait a through this wade through this. Thank you. I appreciate senator mccaskill looking closely at this bill. She wants to know whether she should vote for it or not. I think it is simpler than what the house came up with because the 17. 4 reduction is simpler than coming up with a formula that every company would disagree with. They endorsedason this bill. They do think this is simpler and would be a good tax cut for Small Businesses. With regard to what senator bennett said earlier about the distribution of the tax cuts in says there is a tax cut at every income group. In other words, if you look between 20,00040,000 there is a tax cut. 40,00060,000 there is a tax cut and so on. The distribution table in front , i know this is not necessarily accurate now because now we have taken some of the mandate the individual and provided more middleclass tax relief. These distribution tables are even more skewed toward the middle class than this one is. , theng at this table wealthy are going to pay less percentage of their tax under this table. Federal taxes under the puzzle and law, for those of 1 million or up. Which columns . Under present law. Under proposal. These columns report are the share of total federal tax paid in my tax filing units in the income group. The point that you are the highest is that income group is paying approximately the same of total federal taxes under the proposal. I would encourage everybody to go on and look at it your self. So much of this debate is not about what is factual. This group is paying 19. 3 now. How about 30,00040,000 . Are they going to pay more or less . We are looking in calendar year 2019 on this. Law they paid 1. 5 of total federal taxes. 1. 4 timate they would pay of federal taxes. How about 5075,000 . 8. 28. 1. The tax cutsfore are put in for the middle class but already we see what was said earlier and what was said consistently is just not accurate. Let me finish because you have taken two and a half minutes more. I did not. I did not. You are taking my time now. I want to be clear for the record that the witness do we had do we have order . I will let you make a comment. Im just pointing out the obvious. Under this tax proposal those at the top end are going to pay a bigger burden of the tax and the middle class will pay less. It is in the charts. With the new proposal it will be even more so. That of the current law. They are going to pay less. Under the individual mandate, let me tell you the statistics, 84 of ohioans who are subject to the individual mandate, a tax based on the fact that it is in 84 of those people make less than 50,000 per year. They are going to be relieved of that and told youre going to get more tax cuts because this money goes into the tax relief primarily for middleclass taxpayers. Look at it themselves. First, they talked about bermuda as a way to erode the u. S. Tax base. Current tax code is Encouraging Companies to go overseas and we have studied this. It has been bipartisan to say lets stop this. Lets go to an International System that is fair. It has never been a partisan issue until now. Can you explain how we will put a stop to Foreign Companies to erode the u. S. Tax base . How have we are improved in this bill . Proposal that calculates a modified taxable base and add back the Foreign Party payments that are typically used to strip the u. S. Base. By 10 andes compares the actual corporate and you pay a residual. Will this help to keep income from leaving the United States . Will this stop what is going on now in terms of people sending money away from the United States . With respect to payments that are made to related parties it would have a deterrent effect. That is what we want. People talk about china. What is that Corporate Tax rate in china . 25 . I would have to check. You are correct. 25 . Ours is 35 . There is incentive to do that. We have the highest rate in the industrialized world. What with the tax rate be under our proposal . 20 . I get that we have a broken tax code. We have to fix it. That is what we are trying to do. We are trying to get these jobs in this country. Instead adding jobs here. That is what these are intended to do. Thank you. Your time is up. Thank you for the indulgence. He is my friend as well. I dont dispute what you just said. Wish you had not described what i said as untruthful. The witnesses agreed with what i said. You should look it up. They will find there are 90 Million People in the country that are getting 13 billion under this plan. There are 500,000 people getting 33 billion under this plan. That is not to get rid of the poverty in america. It is not to make it more competitive. Make that point and we will talk later. Thank you. I certainly enjoy watching mr. Bennett and mr. Portland portman collaborate on the truth. One of the important questions we have yet to answer in this ongoing discussion is the tax version of the 90 million folks that would only receive a 13 billion benefit. Thereality is we study distribution and tax burden. We find very quickly that the folks in some categories share burdenrden out of 100 of the tax. They therefore would not receive the benefits. One of the things we should ask ourselves as we focus on those folks who are the 90 million that get a smaller portion of tax benefits is what are they paying now and what will they be paying later . Earlier i spoke for the fact that our singleparent household average income 36,000, their taxes are very low. They are living paycheck to paycheck. Even though they may not benefit as much because they are not putting as much in, they desperately need the dollars remaining in their paychecks. The cut the tax burden, while it may not be the same number from a negative perspective, the value of that dollar is significantly higher when you are the sole breadwinner in a household. I would say the same is true for our friends to be middle income of the country. Senatornk that as chatted about, i am not sure why there is any debate over undering households 50,000 with a penalty for not doing something wrong, just a penalty. Undering households 25,000 was a penalty. The fact of the matter is those households will not be losing their insurance. No one is taking their Health Insurance away from them. Simply eliminating the mandate provides them an option. Folks will make the best option. Is that ernest and fourth 4700at businesses would still be u. S. Companies outside of the fact that our tax code has been so punishing for businesses. Accurate . The ernst young study. I dont recall exactly the 4000 figure. The study does note that there are Tax Advantages to trying an inversion or to have the New Enterprise headquartered outside the United States. The study also indicated in some determinationl might be more businessrelated. The tax is a next her benefit. The facts is that there are hundreds of thousands of companies thousands of companies who have made a business decision to locate outside of the uniteds rates because of the consequences of the tax code that makes it to their disadvantages to be an american country. That company. Those companies should be trading more jobs outside the country then they were if they were still u. S. Companies. Our ortance of giving getting the tax code competitive, it is hard to overstate. Benefits of a lower Corporate Tax rate is a benefit goes to employees with a possibility of higher wages. Consumers with lowercost goods. Who would include retirement funds, pension funds, hopefully a better rate of return. Yesterday, then economic incidents of taxes on business income and we think solid economic empirical evidence to suggest over the longer term that either some of the benefits or burned to labor burdens income to workers in terms of higher productivity. Higher wages are expanded. Work opportunities. Part of the analysis reflects that. It also reflects that in a number of cases, ordinary kers through precipitation participation in plans are also owners of businesses and they benefit directly as owners. Thank you mr. Chairman. The first question im going to ask you, i may not have the documents. We have talked about this in the past. Let me at co. I agree. A simpler and more competitive american tax code red other countries have done it without blowing huge holes in their deficits. Outside this statistic of ourw america in terms competitors, ranks in total taxation 31st out of 35 nations. You and i discussed member countries, a large majority of. Hem have higher overall taxes they bring out lower business offs that they dont push when we said all of the responsibility on the next generation to pay their bills. Dont i think he was dead on last week when he said there is no historical precedent that says a major tax cut at full employment is paid for entirely with borrowed money and is going to produce the numbers projected. I would perhaps ask my colleagues. We have the video. I had the opportunity to speak at the wall street council. Major ceos from accounts across the nation. Through, howax cut many of you are going to increase your Capital Investment in the United States . Ceos in the room . I think three raised their hands. The underlying presumption that this tax cut with borrowed money is going to mysteriously driveup corporate growth rates in ways that are unprecedented. There is no historical precedents for anywhere in the world. We are 23 in debt right now. On a the debt rules over beginner basis, the number i have heard used is 100 basis point increase in interest rates. Before we take on the additional debt. 160 billion per year in spending. That would be a consequence. Today you dismissed and said medicare would not be a challenge even though we have these rules. Whenever congress has a chance that punting it will punt. If that is a presumption we ought to be modest about what we are doing. A Bipartisan Group that i have worked with very closely and a whole host of colleagues have worked with, the most recent this tax billg if is not roughly the 1. 5 trillion in added debt, it has more than 105 Million Dollars of additional gimmicks that will add it to this debt. Actuallyume we are not going to sunset the provisions after 2025, that will add 240 billion. That will add another 115 billion. Risee not going to, to expenses after 2025. That will add a 60 billion. And so on. Expecting the chairmans comic as truthful, lets call this what it is. It adds 2. 2 trillion to the debt. Unfortunately, what that means, i wish more of my colleagues were here who expressed concerns about the debt. In 2027 based on the chairmans mark 28 debt ratio of 99 . We will be one year away from having a debt larger than our whole economy. Know any nation, we went through this debate four or five , once you get above , we pass this legislation without appropriate offsets. That is where the nation will be in that is not where i think you or anybody responsible would want our country to be. Cracks senator kent. Cracks thank you. I have been tied up most of the lightningr another round overnight movement on legislation. Part of reconciliation that never had a hearing. We spent most of the morning talking about that. I did not have a chance to be here until now to ask questions about what came out at last night. That we are dealing with two pieces of legislation moving at lightning speed all because people are changing and moving around. Meet somest to artificial deadline that is not good for the american economy. Very very troubling. That now i have five minutes to fit in whatever questions are important to my constituents, i guarantee i cannot fit them in in five minutes. I am requesting a second five minutes. Here is my question. I received this letter from a veteran in my state. Twentyyear military veteran. In 2013 and after a career that included 11 years at sea and multiple deployments supporting combat operations under four president s, now he is looking at this proposal. His bottom line is he thinks he he is going to pay 5,000 more in taxes. When he looks at what he itemizes now and the changes being proposed, he thinks he is going to pay 5,000 more to more. He wants to know what is going on and i have to tell him i have to find out what the latest draft last night at 10 30 says so i can tell you for sure whether youre are going to pay which, thisnot change to local deductions is just on the back of middleclass taxpayers and the wrong way to go. E have had this debate aboute had this debate passthroughs. I dont know if im going to get an answer but heres my cap relation. In the president s last filing of personal disclosure he reported 529 million over a 15. 5 month pope of although perio. D 39. 1 , 31 would mean the president would get a 32 million tax break. I cant verify that math because im just going off of what his Financial Disclosure says. If i had a tax return i might know. Of thethat the president United States deserves a 32 million tax break and my constituents, a military veteran struggling with his wife to make ends meet, to be surprised in little of the night with a 5,000 tax increase . Why are we rushing this process . Why are we trying to rush this process and do things that change the tax code in ways we cant even understand . Since i have been spending all of my time over at the other committee trying to do the same licketysplit changed the tax code, heres my question. A question you probably can answer. Why all of a sudden in the middle of the night do we now the u. S. Virgin islands tax code that basically would change that companies in the Virgin Islands would be able to sell into the United States without tax . why did that happen overnight . Do you know what it means . Im not familiar with that provision. It did get added last night. I assume it is in the modification. If that is where it is. Are you aware of this section . It is in the jcp description. You have to look there. I like our counsel. Our committee. I am assuming they are paid pretty well because they are talented. Mr. Abraham can tell me, your staff is getting briefed to. Somebody added this provision. Im trying to answer my constituents. He served our country. Im trying to tell them if he is going to pay more taxes and i have to tell him that the president gets a 32 million tax break. The president can clarify. Maybeppy to hear he is not going to get a tax break. I would love him to come clean about what his taxes are the in the middle of the night this provision change, i dont know what else it is going to add and what else it changes. I need to explain this. Your time is up. Cracks thank you. Thank you. Im glad there was concentration. Bracket,xt two lowest bracket, there are people in that. Under the old bill where would that start . Adding the personal exemption. Zero tax bracket would be 24,000 at least. For joint filers. In that case, no personal exemptions since they are repealed. In answer to the previous questions, it is hard to give somebody an additional tax break that under the code would not pay a tax. They still get federal benefits. I noticed that according to when we eliminate the tax 4 million insurance, would be kicked off insurance going to 13 million by the end of 10 years. 2015 6,000,655 thousand people were kicked off of insurance using the same kind of criteria, almost 7 Million People. Because they cannot afford the insurance. . Hat did they do they paid a penalty. They paid millions. We are a low population states. We still had a very significant number of people in 2014 and 2015. That happened in the nation as well. In those categories there is actually an additional tax break for those people who have been paying those amounts. Wanted to add a quick senator brown mentioning that we could not raise money through this. Thats 25 of money that is to come in, a static score. You have to imagine something good will happen out of this tax bill. Hopefully we can do something. Proposal provides for a lot of people and that will stimulate the economy. Everybody to do is see if they think we will toeed 1. 9 gdp or maybe get 3. 2, in which case we would have money to spend on all of the things we would talk about. I doubt that is going to happen. I yield the balance of my time. Thank you. You mr. Chairman. Would one of you all explain to me a provision we have just that, unders bill current law, and american oil , anyny such as exxon American Oil Company in a foreignbased affiliate under current law, once they have income from that for an affiliate they pay the tax on it. Is that thattand provision in the market, it reverses that and eliminates the foreignbased affiliate oil related income as a category of income so they would not pay income tax. The American Oil Company would not pay income tax on that. Is that correct . This provision would reduce revenues by 4 billion . That is not entirely accurate. Law, under the worldwide system, Companies May operate a broad in general forms. They can operate as a branch or own a controlled Foreign Corporation subsidiary. You are correct. Branch oferate as a the income is treated just as part of the domestic income and there is always current taxation. Providedax credits are if there is foreign tax paid on the income. Wheel situation where the Company Might own a corporation, the active income may be deferred abroad if they choose just like other businesses until a dividend is repeated treated back to the home country. Yourarticular Division Rule thatto is a limits the application of foreign tax credits specific to the oil industrys. Limitation that congress enacted to limit potential for cross crediting across jurisdictions. Meaning more foreign tax can be credited then congress thought was appropriate. Would repeal that respective to foreign tax credits. Lets see if we can get this in english speak of the everyday american. I should provide more details on related party sales. It is related to income on which there is current taxation. That really does make it clear. Let me ask you a simple question. Simple question. The income taxes of the oil company . It reduces the income taxes by allowing more foreign tax to be credited and so it reduces residual u. S. Tax. Company,ore the oil American Oil Company, pays less tax. Less u. S. Tax. Ok. Years oilven over the companies lots of incentives. I think in the tax code there are incentives from over a century ago. Giving incentives to drill. Are there any reasons we need to give further incentives for Oil Companies and reject our profitable Oil Companies recently . Is this what we want to do to give tax breaks to Oil Companies while giving very few tax breaks to Little People . I dont think that is a good thing of the fair tax code. Thank you. In the last few days and years, in this hearing room in september the Health Education Pension Committee brought in a panel of governors, Insurance Information ors, Health Insurance companies, health economist, health care providers, and ask them what do we needed to do to stabilize the exchanges in all 50 states . They said basically three things. We do not allow a lapse. Make sure that is continued. Two, make sure we establish a reinsurance program. Three, dont get rid of the individual mandate unless you replace it with something just as effective to make sure that Healthy People are going to be in exchanges. A letter came from yesterday, it Blue Cross Blue Shield , basically repealing the individual mandate without a workable alternative will reduce enrollment. Forever destabilizing individual and strong Growth Markets on which more than 10 million americans rely. There will be serious consequences if congress sibley repeals a mandate while leaving the reforms in place. Challenge their access to care. Lets Work Together on solutions and give them what the American People deserve. At the shrineip of the individual mandate to i am a recovering governor. Find out what works and do more of that. We have heard to the individual mandate does not make sure that young people are getting into the exchanges. Somebody saying that, that is not enough. Why dont we have folks before us in a hearing let this who can answer that question . What we need is independent validation. We need the individual mandate, the best way to make sure that young Healthy People are getting coverage. Is there Something Else that is better . We have never had a hearing. The closest hearing was two months ago. Where most everybody agreed that the individual mandate was work. Insurance companies, health economists, governors. There is reason to believe that there is a better idea out there. Why dont we have the cbo to answer these questions . This is important. We have already seen so much damage done to the individual the exchanges. The ministration they call it obamacare. They think it was a creation of obama. He had nothing to do with the creation exchanges and obamacare. It has been labeled after him for fun. For some other reason. Cbo tot we have actually answer a legitimate question in this debate . Why . I cant hear you. I cant hear you. Yeah. That is a good idea. We have joint tax helping us to understand this. Cbo, i am not sure if they would help us understand anyway. Cbo is in a position. They have the expertise to answer this question. They can tell us if the individual mandate, what effect it will have in terms of the healthy mix. I dont know that is not the job. It is one of the job of cbo. This is the way we perceive that. Say why isntt cbo here to answer these questions . Frankly, we are going to move ahead with what we have which is plenty enough. Said id of mine confuse me with facts. Cbo can provide facts. I think it would enlighten us. Caneig and if they want to. H it would be better to speak more about the individual mandate. It just this disproportionately affects low income americans. 5. 2 al people make let of americans make less than 52,000 for the household. Many make significantly less. Summers,gruber and they didearchers research for the National Bureau of economic research, which they published the summary of in a journal of medicine. Y found that the employer excuse me, the individual mandate had no significant effect upon increasing enrollment. Cbo may hold the position that the cbo holds, but the facts are, published by the researchers the cbo doesnt do the research, the researchers do and here is an architect of obamacare saying it doesnt increase coverage. With mylove to work democratic colleagues on how we can increase coverage. I proposed to senator cowan i propose to senator collins, a role a bill with automatic and romans. I was not only automatic enrollment. Not only did people not agree with me, but i was demagogued. I am open to a solution that will expand coverage. I will point out these articles, which i will submit for the record no objection. They will establish the facts that the individual mandate does not have coverage. As regards to the issues that senator nielsen raised, thereing Oil Companies, was a statement made earlier by a senator in the anr, that these companies arent tax havens, and that this provision in some way benefited these companies and tax havens not the case. You dont produce oil in the cayman islands. You produce it in companies countries like nigeria. The purpose of this provision is to keep American Companies from being taxed twice. This allows them the full relief of a foreign tax credit on their u. S. Tax policy. For,y, i will say a plea lets Work Together carried i gather that the Ranking Member, earlier, had a chart, in which he spoke of tax relief. His main complaint was we dont make them permanent. At least we can accept that this has middleclass tax relief. I would like to work to make them permanent permanent. I would suggest that if we can accept that it provides tax relief to the middle class, that we can Work Together to make them permanent. With that, mr. Chair would you yield for a question, please . I enjoy working with our poly from louisiana he knows that and i think his intentions are good. I would ask my staff, a week or two ago, to actually reach out to jonathan gruber, and say the what we are hearing from our republican colleagues about what you are saying about the individual mandate, is not worth much. Is that a fair characterization of what you said in your paper . He said, thats not. Thats not what i said. Words,ld take down his but my own staff, people sitting behind me, talked to him last week. He said, thats not what my paper thats not what my paper said. According from an article that he was a second author im quoting from an article that he was second author on. This included incomebased andlties for coverage exemptions. We did not find that Overall Coverage rates responded to these aspects of the law. In fairness, he goes on to say that it had no effect. Not necessarily. After that to say he could improve it. He may be biased, but the Statistical Analysis said, and i just quoted it, that coverage rates have not responded to these. I will try to get some clarification, and share with us tomorrow. That would be good. Your time is up. We will get back to senator cornyn. I like to respond some to some complaints being made. ,f we werent forced to do this using the budget reconciliation process, we could make the individual rates permanent. Its because our democratic colleagues have chosen to go awol on the process, and have forced us to use a reconciliation process, that we are only able to do for 10 years. Thats the simple solution, if our democratic colleagues would work with us to come up with a bill that would get 60 votes. We can still get 60 votes on a reconciliation bill and make it permanent, so its in their hands. I would hope they would consider that. Secondly, the Ranking Member was pointing out that, thats the business and investment tax is paid by corporations, was permanent. I thinkn comments the senator from michigan and others talking about corporate giveaways. Some of the ideas, the best ideas in this bill, were bipartisan. This would reduce corporate breaks rate to 24 . This breaks up ideas that we have had. We would check to build the best product we could. Unfortunately, without their help, when it comes to voting for any of it. Then, the criticism we have heard on the decision to repeal the individual mandate tax this is paid by people of low and middle income. I think, roughly 50 of the people who have paid the individual mandate make less than 25,000 a year. Thats because they cant afford to buy the government approved insurance policy, so they pay the penalty instead. What we have decided to do is repeal that regressive tax, rate burdens them at the of 43 billion dollars over the next 10 years, and to give them tax reductions, which hopefully will allow them to keep more of their hardearned money, and spend it the way they see fit, if they choose to buy some other insurance policy, they can use it for that if they want to. This idea, that this is a bad thing, is its unequivocally a good thing. , are are ideas out there bipartisan idea actually about how to stabilize the individual insurance market, in a way that will cause premiums to go down. We will try to get premiums to go down while repealing the individual mandate tax, and save low income taxpayers 43 billion. They would then try to lower their tax obligation. This strikes me as an important step in the right direction. Finally, on the Corporate Tax hoping is thatre we can become more competitive in a global economy. Right now, those jobs are going overseas. We can see investments come back home in the United States, because we rationalize or Corporate Tax code. Then, we can do what president obama arguably should do. Sun touched the senator has advocated we do this by making or Corporate Tax code more competitive. Thank you, mr. Chairman. We are going to go to all democrats, three rounds, with five minutes. Then, we will have to get into working on this bill. At the end of those six, five minutes each, we are going to get in and do our job. I dont see how anybody can possibly find any fault with how and allowhis on, everybody their full ability to speak. That is what we are announcing. That is what we are going to do. Senator thank you very much, mr. Chairman. Not long ago, i wrote a universal Health Care Coverage a Broad Coalition of democrats and republicans, including the republican leader, at the time, trent lott. This included a coverage requirement, even though all of us always had hoped it would be necessary. Coverage andversal republicans thought that that coverage requirement was necessary in order to preserve a Market Health care system. It was clear that it was the spinach to get millions of americans Health Care Coverage ,ithout discrimination preexisting conditions, and coverage that didnt break a Household Budget for the federal budget. Clear,dy ought to be that a vote to eliminate the coverage requirement is a vote to go back to the day with good health when good Health Care Coverage was preserved for the healthy and wealthy, and the Health Coverage you pay for could be taken away, just because some Insurance Company said you or your spouse or your sick. Just got too now, members are going to keep the howbout how they are voting just to do away with the coverage requirement. Come election time, no honest fact checker in the world is going to dispute that a vote on this bill is a vote to take away health care from millions, and raise the premium for millions more. Nobody is going to be able to run and hide from the consequences of what is being chosen. So, my question is a twoparter for you, mr. Burke told, and you, mrs. Worn off what happens what happensn off from this standpoint, if the requirement to have coverage is not in the bill . What would be your response . Modificationans would set the penalty rate to zero. Because of that, some individuals would no longer have pay the penalty. There were not be a penalty with any substitute, financial bite. Some individuals would choose. Ot get coverage but there would be a big hole in the bill, is not correct . If you are to eliminate the revision, yes. I misunderstood your question. There would be a big hole the bill, colleague, if you repeal it. As in the bottom line that in order to provide a permanent tax cut for multinational corporations, 13 million americans no longer have Health Coverage, and millions more are going to face premium increases of 10 a year. Isnt that the bottom line . \ according to cbo, 13 million americans will no longer have Health Coverage. Each year, we will see a 10 additional increase in premiums. There we are, colleagues that kind of sums it up \ thats the history when we put together that universal coverage bill, with the republican leader and a big group of democrats both of my seatmates were here we said we wanted universal coverage. Republicans said in order to have a private sector delivery, a market system, you had to have a coverage requirement. None of us wanted it to happen. I think people ought to understand that we just had to confirm by mr. Bartel that from a revenue and spending standpoint, the requirement to have coverage and coverage repeal was not in the bill, they would have a huge hole. As a result of that, they can give the big tax break to the multinational corporations. Thats what this is all about. Thats the history, the American People are going to see that if you vote to repeal the coverage requirements, which trent lott thought ought to be a part of a universal coverage bill, a serious private sector they are going to take away and you are going to take away coverage from millions. Thats what this vote is all going to be about. Going to be able to run away. Thank you, senator. I guess that answers socialized medicine. Please. Trent is no social life. He voted to have a private Sector Health care delivery system, and he said universal coverage would be the way to do it. We live in todays situation. Thank you very much mr. Chairman. I would ask you now to put a letter on the record that, 16 patients thank you very much. The american lung, diabetes associations, and others, are very very much against is happening here. Theres so many Different Things that the senate would love to debate, and dont have the time to do that. Even though what has happened has happened quickly and things keep getting changed, we do have distinct economists who have managed to look at what were talking about yesterday, today command have said publicly that 57 of taxpayers would end up today, rather than what we were talking about yesterday. 50,000he people within at 75,000 would end up worse off with what we are talking about right now. I want to take my limited time to talk about what we ought to be talking about, which is jobs in the economy. Really growing the economy without creating massive debt or raising peoples taxes. That relates to in to an important provision. It relates to growing things in this country. I care deeply about both of those things. Its what we do in michigan make things and grow things. The farming and is vital to americas economy, as well as the manufacturing end of what we do. Just talk about agriculture for minute. We have over 50,000 farms in the play nearly one Million People. Well over 90 of those farms are familyowned. There is a proposal here that would actually raise taxes on many farmers. Thats the repeal of section 199 deduction for Many American manufacturing production. It would be a 2 billion tax increase on coops alone. It would raise taxes on farms if they are see corporations c corporations. The farmers i have heard from our clear rate cuts alone are not enough to make up for the loss in section 199, Domestic Production credit. It would also impact our manufacturers. , as i saidlieve before, we dont have an economy or middle class must summit makes and grossed something. Repealing section 199 but specifically penalize American Companies that are doing just that. Mr. Bartel, can you explain the purpose of section 199 and the objective . 199 was enacted in 2004, the purpose was to give a reduction in the effective marginal tax rate for what were labeled production a mystic production activities. The effect is 9 reduction in the corporate context was lower to lower the statutory tax , to approximately 3132 . This also applies for organized, that are that passed reform. The chairmans mark, repeals that at the same time that it lowers the statutory rate for corporations regardless of the type of business they are engaged in, whether it be manufacturing or anything for retail. Yes. From 3520 . He passed through enterprises with a rate of 17. 4 reduction on their qualifying income, its a larger deduction than the 9 reduction under section 199. According to many of our , thiss and manufacturers does not make up for repealing this section. This is all about making things in america. , the bignally just say picture is trickledown economics will pay for itself. Bush years, the bush tax cuts, supposedly theyre going to pay for themselves. That did not happen. The Treasury Department, well they didnt release the results of their Economic Modeling at , Research Office announced the treasury study, they found that tax cuts would initial for 7 of their cost of Economic Growth, and 10 of this run. Is it true that the bush tax cuts did not pay for themselves . That. S hard to measure there was recession. There was a recession. Thats true. There was not Economic Growth three there was debt. Anyonent know that claims that the tax cuts paid for themselves, but i think most people attribute the recession to the attacks on 9 11. Appreciate, i appreciate that. Think its wellknown that the tax cuts did not pay for themselves, and fact added to the debt. Thank you. Mr. Chairman, let me ask mr. Kuralt so. Curas cool brosseau o. Currently, if im a single mom making 25,000 a year, the refund ability is what matters to me, correct . Correct, senator. If its not refundable, it Means Nothing to me, correct . Correct. The current law is to refund up to 1000, correct . Correct. Its going to index upper inflation to get to 1100 in the new law . Yes, starting in 2018. Meanwhile, the 2000, that would benefit families who make more money, correct . Yes, a family would have to have sufficient tax ability to use the additional bump up. With the bump up to that doesnt have much meaning People Living paycheck paycheck to paycheck. Yes, if they owe little or no tax. Heres the kicker current law, you can get this up to 110,000. I have no problem you are raising this, but its going up to 500,000 a year. I dont know what families are doing in other states, but the families in my state ever making 500,000 a year dont need it like a 24,000 a year mom with one child. Let me move on, because ive only got i got a bunch task ask then i got three minutes and 49 seconds then i have to vote. I have private activity bonds we havent touched. We havent what touched touched what happened to jobs. We have not touched the historic , got credit that will have a devastating impact on urban areas. And, rural areas in my state as well. I want to get to this now. Mrs. Schaeffer, 362 billion in tax cuts are passed through this bill, correct . That sounds right, yes. All income in america goes to people who make more correct . Llion dollars, i believe thats accurate based on the tax policies in our study. 80 of all the income goes to billionaires and above. We are doing 362 billion tax cuts for them. Im going to show you a picture, and i would like this to be added to the record. This is a picture of a partnership trade i will actually give this to you, mr. West. We will get a question to you, believe it or not. This is a picture of a partnership. Without objection, we will put that in the record. Great. It has 50 partners and 10 shares. Is it correct that the irs currently audits less than 1 of the partnerships in the country . I would have to check, but i believe thats inaccurate statements. Ok. That is an accurate statement. Ok. The past is simple now, because it the past is simple now, path is simple now, because it moves into your other taxes. If you are a Small Business that makes less than 150,000 now, youre paying what, in the 20 rate, somewhere in there . It would be based on the individual rate. If you are a Small Business, you are already paying much less than what this real tax rate would be. Small businesses pay less because they are small thats simple. It doesnt have to have a calculation about whether you are a sole proprietorship. Theres no calculation about whether you are providing a service, or you have taxing income. All this is adding layers and layers of complexity to this. Let me ask you this this is not a left the 199, correct, mr. West . Is someieve there technology from section 199 in there. You can talk to maybe others at the table. To the irs launch a Compliance Campaign to identify this, subject to risk and abuse . A special Compliance Campaign . I would have to check on that, senator. Its my understanding from our research that there was a specific Compliance Campaign because of the risk and abuse associated with this trade let me, finally, ask about tax groups. There is a limitation, mrs. Schaeffer, on this, how it relates to people providing services, right . In other words, how much of a deduction you can get our wages for the business, correct . If you are providing services . The deduction is limited based on the w2 wages paid by the businesss turning it, 250,000 for an individual, 500,000 for a couple. Does that apply if you are not providing services . Yes. So, it doesnt matter whether you passively on a golf course, or whether you own an accounting business. It would apply to the wages of the business . Thats accurate. The deduction is there if you are passive or active. Your time is up. Thank you, mr. Chairman. The last round, i started to get into the proposal of some of the problems we may have, because you havent thought out some of the consequences of these changes. We havent had a public hearing. Theerday, you mentioned number of those who use standard thistions before and after became law. Now, we have a revised chairmans mark. Can you share with us a percentage of taxpayers you believe, under this market, would now be using itemized seductions . I havent recalculated that at this point, but i cant imagine based on the changes made, that it would move more than marginally from what was predicted yesterday, 95 of taxpayers elect the standard deduction. Currently, what is that number . Taxpayersly, 71 of elect the standard deduction. Is a substantial reduction of those who would be using the itemized deduction. From approximately 30 to approximately 5 . I want to get to the consequences is has on two major entities depending on this. One is charitable organizations, which advertise frequently that by giving a gift to charity, you can take a deduction on your tax returns. Now that 95 of taxpayers will not be getting the financial advantage on the taxes by giving a charitable contribution, have you determined what impact that will have on Charitable Giving . We have not made an estimate of the effect on charitable constant contributions for the change and aftertax price of giving, to those taxpayers who now elect to claim the standard deduction. I would just point out that this committee has broad jurisdiction, including dealing with a lot of the areas at which we have partnerships with the private sector. [captions Copyright National cable satellite corp. 2016] turnabout foundations and groups, whether it is charitable organizations, whether it is health care, daycare you can go through a whole list. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] this can make an impact on donors. We are not sure. It would be good to know we are certainly going to change campaign strategy. Currently, itd will be down to 5 . I was saying, the deduction of it. Im sorry. Now i get to the Senate Question senator isakson raised earlier, real estate. Ofi understand it, the value the mortgage and student for those whotion can no longer get a tax reduction because they are using the standard deduction, is not as valuable to that individual as only property is concerned. The state local deductions we are not going to be able to deduct property taxes. Have you done any analysis as to what impact this has on the value of real estate, which is, i believe, one of the largest assets that americans own, their estate . Have you done any analysis as to what impact that could have on the value of real estate . In the information we have presented thus far, we have not done a sector by Sector Analysis of the aggregate investment in real estate, housing. Its one of the outputs we look at. I would just point out that if theres a 5 or 10 reduction in the value as a result of the changes in the tax code that would impact, Balance Sheets of america that would impact out sheets of americans. 38 seconds. One i like to point out, the value of real estate, it also affects local governments. They impose property taxes based on set values. If those go down, its going to peoples abilities to raise revenues. All i am suggesting is that this committee has a responsibility to know the consequences of his actions. I pointed out just a few. My guess is there are hundreds , that itr examples would be nice to know the consequences before we are asked to vote. Sen. Carper are you senator carper. Thank you. Ok, senator carper. Thank you. Im going to ask someone on our panel im not sure who. Tell us again what is the best estimate of record loss over the next 10 years if this modified chairmans mark is adopted, and fiscalwould that be the impact on the deficit . Im looking for deficit impact. Carper, this is our current estimate of the chairmans mark as modified. The 10 year total that we estimated is the negative 00,000,000,414 between 1. 4 and 1. 5 trillion . Close to 1. 4. If we were to adopt an amendment to maintain the status quo i understand the current law with tax income for couples making more than 470,000 a year at about, under 40 39. 6, is that right . Thats the top ordinary tax rate. The market would take us down to 38. 5 , income over 1 million . Www. Cspan. Org for the joint files, thats correct, center. If which just maintained current law with respect to those if we just maintained current law with respect to those rates, do we know the impact on the deficit . Off the top of my head i dont, but we could estimate that for you. Would you maintain the same or higher breakpoint for shoulder 500,000 for singles, 1 million for joint filers . We would just maintain the current law. In all respects . I will ask my colleagues to prepare that estimate. I will get it he was quickly as possible. Any idea what the federal circuit deficit was reported to come on september 30 . I would have to look it up, sir. Minder standing is that it was close to 700 billion. Does that sound in the ballpark . Sounds close. The deficit we have seen it going into the great recession. The handoff from president bush to the obama administration. The deficit for the that year was 1. 4 trillion. A big part of that was the inovery act, trying to pump money to the stimulation economy. Deficitat, we saw the go from 1. 4 trillion, down, down, down, for a number of years, to under 400 billion still huge, but not 1. 4 trillion. In recent years it has come back up. Again, near 700 billion. Interesting to find out from your colleagues, if we didnt revenue weoney, the have not sacrificed for this bill, what the impact be on deficit reduction over the next 10 years . We will prepare the estimate, senator. That would be helpful. Colleagues, before our politics of the state treasury we have the worst Credit Rating and america. Bills, we paid our would issue tax revenue anticipation notes. I have a friend who is a good governor, fiscally conservative. I was state treasurer. He provided great leadership. When he stepped down, we looked for dogmeat for our Credit Rating. Wem a last term as governor, we still have aaa. One of the things we stopped doing was overestimating revenues, underestimating spending. In this case, we know if we approach outlined, we are just going to drive the deficit higher. Im a believer that we are in a recession. It came out of style, i dont think thats right. We are in the longestrunning economic expansion in the history of the country. One point 5 trillion higher, that makes no sense to me. Thank you, senator. Senator cantley, you are the last one. Then we will take a 15 minute recess then come back, and mark this bill. Mr. Chairman, i have Great Respect for you. Vice a versa. I dont get what the hurry is. I dont get what the hurry is. I just get why we are moving so quickly. We keep going over and over all the things we all know. Chairman, respectfully, senator mccaskill, cardin, a whole host of our colleagues have laid out that there a tremendous array of unanswered questions. Time toplenty of consider this, but we are going to move ahead. Mr. Chairman, to point that out, and international provision, which you spent a couple of days trying to analyze and hear and understand how these provisions impact businesses, or the fact that today, we learned that this may lead to most international banks, domestic banks, to stop buying low Income Housing tax credits. My college mention the historic tax credit. Im hearing from places like museums, the Utah Heritage Foundation that support the tax credit for historic use. Tap into that . I hear what is happening to that . Here from various organizations i hear from various organizations about this. We have advanced bonds impacting public utilities, places like seattle or the orlando airport. Theres any number of things that are changing overnight, and we are trying to keep pace to understand that. I dont understand what the hurry is about, compared to the 1986 act, which was done in a fashion of collaboration over a long time. My question do not how much i care about Affordable Housing, we both care about Affordable Housing. Im very concerned about provisions of this bill that change the Affordable Housing opportunities in the United States. I would like to submit for the record, from the tax reform resource center, findings about three of the provisions in the senate bill, to say nothing about the repeal of private activities. My point is, by changing these dynamics, we havent even have havent even had a breath to ask what that will do for Affordable Housing. Number on in the cpi inflation factors i am looking at this for, and it is basically saying that there will be hundreds of thousands well, actually, one million jobs lost. Im looking at florida 50,000 jobs, florida ohio 22,000 , becauseas 20,000 jobs Affordable Housing wont be. Im not talking about your idea of being more aggressive. Im talking about the impact of this that this change in code is going to have on Affordable Housing, just in the senate bill the house bill is going to make it even worse, by getting rid of activity bonds. Am i correct that there are changes here that have now led to these estimates on the reduction in Affordable Housing units being built in america in s . E next year thats correct. Its going to take a lot more some sort of expansion incentive to continue the level of Affordable Housing to be built, or the number of units thats going to go down by hundreds of thousands. We are going to lose jobs, too, because they wont be built. Texas, florida, places that are already exacerbated in the amount of unaffordability that are residents of those states like my state. Now, they get hit by hurricane, and you are proposing something that is going to cut one billion one million jobs out of the economy, because youre not taking into the consideration of the impact of this bill on Affordable Housing in the United America . Thats why want to slow down, mr. Chairman. A month to make the point that i dont want to go backwards on Affordable Housing; i want to go forward. I want us to understand and not backwards on Affordable Housing. Thank you. Thank you, senator. I dont want to go back, either. I will certainly try to help you as we have this past. We will continue to work closely with you. I want to thank the members for participating. I think these sessions have been informative read i also want to really think humber tall and his staff, and our Staff Members for being in this session. Have been very patient. You have been a terrific asset to all of us personally. The next step will be to move to amendments. I think we can use a break to discuss the path forward. The committee will be in recess for the next 15 minutes, and we will reconvene at 5 15 p. M. With that, we will recess till then. Today, the Senate Finance committee continues work on its version of tax reform. Watch the meeting live at 10 00 a. M. Eastern on cspan3. Here on cspan, live coverage of the house and i 00 a. M. , as they debate the tax reform bill 9 00 a. M. As grants nighthawk walked into the room first, he was ,earing military camouflage with the blood dropped emblem right here, and the initials kkk on his chest embroidered across his beret embroidered across his beret on his head were knights of the clue clucks clan. He had a handgun in a holster. The grand k dragon. When the nighthawk entered and turned the corner and summit, he just froze. Mr. Kelly bumped into his back. They stumbled and regained heir balance. Inuit they were thinking either they i knew what they were this guy hasher the wrong room number, or this is an ambush. I stood up and approached them and said, hi, mr. Kelly. For the past 30 years, daryl davis has daryl davis has made friends with kkk members and tried to confront them with their wrongs. Sunday night at 8 00 eastern. Cspan, where history unfolds daily. In 1979, cspan was created as a Public Service by americas Cable Television companies, and is brought to you today by your cable or satellite provider. On washington journal, we talked to Democratic Congress when john larson, a member of the ways and means committee, and a critic of the republican tax reform bill. This is a half an hour. Washington journal continues. , at congressman john larson democrat a Senior Member on the house ways and means committee. You are highly critical of the
vimarsana.com © 2020. All Rights Reserved.