Understand how much of a hole its going to blow into the Housing Production but i expect that there are other unintended consequences by twhesm just found out last night that wind and solar will also have the same issue in being impacted by this. I hope we can adopt my amendment and fecks this. I hope we can slow down and understand this important part of our tax code. Thank you, mr. Chairman. Senator grassley. Mr. Chairman, members of the committee, im not going to vote for this amendment but i do appreciate that she brings up an issue that we better be very, very certain about, not only because of low Income Housing but also because of Renewable Energy and she mentioned wind and solar, something that should not be touched, and it is hurt very badly in the house bill. Shouldnt be tutched by any of this stuff. We made an agreement three years ago to be in transition get rid of the tax credit 20, olar 21, for wind in and as i indicated yesterday or two days ago in our discussion in my very same subject discussions with secretary mnuchin that every tax bill has transition provisions in it and this is a transition provision that we have for wind and solar going back three years, shouldnt be screwed around with, let it play out and he agreed with that and so im going to be following whether or not the senator from washington has a good case here and she does, i intend to have it fixed not only from the standpoint of what she wants to accomplish but from the standpoint of whea the Renewable Energy weve already reached an agreement on. Could i ask is that right, mr. Abramson, the only thing that would be allowed would be the r d credit . Yeah, when youre looking at the inbound provision, inbound minimum tax theres a modified taxable income calculation made and you deduct certain payments that are made outbound but you also add back in for purposes of calculating the modified tackable income the modified the r d credit but not other credits. This is just, anyway , my point, the larger point is just that, you know, were trying to get our arms around all of this. Were trying to understand the impacts here. I just, i hope our colleagues will understand how important to understand the consequences of these things. Thank you. I would recommend the senator withdraw the amendment and work with all of us and see if we can resolve it. Just quickly, mr. Chairman, i did talk to you briefly about this and i think that the 10 which is what that minimum tax is is a relatively low number, so there shouldnt be these sorts of issues that would be significant but if there are, i think we should take a look at it. If senator cantwell is willing to have a further discussion of it, im happy to do that. I think because of the offset youre not going to get support on this side but whatever you prefer to do, id be happy to try to work on this for both of those tax credits. Im sorry. Do we have time to fix this . I think in the context of floor debate, not in committee as i understand it. But lets go ahead with the vote. Clerk will call the roll. One minute. Well listen to senator wyden first. Very brief. Weve known for some time that americas housing policy needs a remodel. We started that effort with the pass act in 2015. It was bipartisan. The chairman recalls that. Then weve been moving at least for some time in the right direction under the cantwell patch effort for additional housing. I think this proposal in the mark actually goes backwards. I hope my colleagues will support senator cantwell and we continue the bipartisan progress we began the pass act in 2015. Clerk will call the roll. The clerk mr. Grassley. No mr. Crapo. No. Mr. Roberts. No mr. Enzi. No mr. Cornyn. No. Mr. Thune. No. Mr. Burr. No mr. Isakson. No. Mr. Toomey. No. Mr. Heller, no. Mr. Scott. No by proxy. Mr. Cassidy. No. Mr. Wyden. Aye. Ms. Stabenow. Aye. Ms. Cantwell. Aye. Mr. Menendez. Aye by proxy. Mr. Carper. Aye. Mr. Cardin. Aye. Mr. Brown. Aye. Mr. Bennett. Aye. Mr. Casey. Aye. Mr. Warner. Aye. Ms. Mccaskill. Abstain. Mr. Chairman. The chairman votes no. Clerk will report. Caller the final tally is 11 the clerk the final hallly is 11 aye, 14 nays. Amendment is defeated. Warner number three. Ive got a special deal for you. I would love to speak, ive got two amendments in a row id love to speak to number 328 first and not ask for a vote, i just want to inform members and then i want to speak to warner amendment number 1 which i would ask for a vote on. Ok. On warner amendment number 328, warner number 3, one of the things that i did agree with what you did in this legislation is you put back in section 127 that allows mployers to spend up to 5,250 a year to continue employees education using pretax dollars. I think thats important for our work force to have the training they need. My amendment, which i hope well have a chance to discuss at a later date, which has broad bipartisan support which is supported here by 127 different organizations, most of your statesen republican side will give that same opportunity, if youre allowing an employee to use pretax dollars to pay someones ongoing education, this would also allow that same amount to be used in pretax dollars to pay down student debt. Student debt is at 1. 45 trillion. It cripples a lot of individuals. We ought to give the same benefit for paying down student debt as ongoing education. And i withdraw the amendment in terms of its vote. Thank you. Mr. Warner let me now talk to amendment number 1, amendment number 326. This, as someone who felt for a long time that we do i concur with my colleagues, many on this side, and most on the other side that we need to rationalize our Corporate Tax rate and repatriate some of those the corporate dollar. My concern has been that those repatriated dollars are oftentimes not used for investment in the United States. In fact a survey done a few minutes ago of over 300 executives at major u. S. Corporations basically said the vast majority said what they would use those dollars for is pay down debt. If we look at the last couple of quarters, corporate profits have been at record highs, weve seen quarters where 95 of all corporate profits were used for Share Buyback buyback and dividends. My amendment is simple. It would require taking companies, taking advantage and i all i ask my colleagues to do is listen on this one. Require Companies Taking advantage of this preferred rate for repatriated funds, deemed repatriated rate, to use at least some of those dollars brought back at this enormously low rate to actually reinvest, and we can negotiate what the percentage is, to reinvest in meaningful Work Force Training programs for those low and moderate income workers that fall below 82,000 a year. Unfortunately over the last 15 years we have seen a traumatic decline in the amount of employerpaid Work Force Training. In a world where no skill set is going to give you the ability to stay employed throughout your life, i believe we need to incent businesses to do that kind of training, train thats meaningful that will allow them to stay employed. I believe theyre going to take advantage of this dramatically preferred rate, they ought to have skin in the game in terms of training their existing work force. Its a reasonable amendment and i ask for its consideration. What are we voting on right now . Thats the one im asking for a vote on. The worker training one . Clerk will call the roll on warner number one. The clerk mr. Grassley. No. Mr. Crapo, no by proxy. Mr. Roberts. No. Mr. Enzi. No. Mr. Cornyn. No. Mr. Thune. No. Mr. Burr. No by proxy. Mr. Isakson. No. Mr. Portman. Mr. Toomey. No. Mr. Heller. No. In scott. No by proxy. Mr. Cassidy. No. Mr. Wyden. Aye. Ms. Stabenow. Aye. Ms. Cantwell. Aye. Mr. Nelson. Aye. Mr. Menendez. Aye by proxy. Mr. Carper. Aye. Mr. Cardin. Aye mr. Brown. Aye. Mr. Bennett. Aye. Mr. Casey. Aye. Mr. Warner. Aye. Ms. Mccaskill. Aye. Mr. Chairman. The chairman votes no. The clerk will report. The clerk 12 ayes, 14 nays. The amendment is defeated. Where do we go now . Who is up next . I think im up next. Cardin number 10. I have good news for you, im not going to be asking for a vote on this amendment. I do want to explain to my colleagues the progressive consumption tax. The United States, it is true, has the highest marginal income tax rates in the industrial world. And one has to ask why . We are not competitive with our marginal tax rates. Admittedly our effective tax rates are lower but for businesses our marginal rates are out of step with the international community. And if you ask why i think senator warner sort of put said this yesterday that for the percentage of our economy thats devoted to government, the United States is near he bottom of the industrial world, not at the top. So why do we have the highest margall tax rates . The reason of course is that were the only industrial nation in the world that doesnt use consumption revenues to help finance their federal government. We use only Income Tax Revenues. As a result, this chairmans mark is trying to reduce the marginal tax rates using basically only Income Tax Revenues to do it. Consequences, large increase in the debt. 1. 5 trillion. Consequences, youve done things that are going to hurt a lot of people like the state and local Tax Deductions and cutting people off health care. Consequences, you have temporary provisions that will have to be taken up and unlikely that this tax bill if it becomes law, will survive even one year without changes. Again as we saw in 1986, you change the tax code 10,000 times since 1986. Doesnt give you a great deal of predictability. 10 the bill that i filed, the progressive consumption tax, would recognize that we could have a competitive tax code and what it does, it establishes a 20 highest Corporate Tax rate a 28 highest personal income tax rate, starting with families over 100,000 in taxable income. Behe that theyd pay no income taxes. A 10 consumption tax which by the way is adjusted, i assume senator burrs the benefit of having border adjusted taxes, this is something senator thune and i looked at last year, the last congress, one of the real problems in our business tax code is the fact that we rely shoally on solely on income revenues rather than consumption revenues. Its progressive. We look theat distribution schedules and its progressive as our current tax code and also put in here, mr. Chairman a Circuit Breaker so that if it raises more revenue than we say, well return that excess revenue to the taxpayers of this country. I really do believe well come back to this proposal, maybe not in this congress, but well come back to this proposal and i wanted to share this wisdom with my colleagues today but i ill not be seeking a vote. Thank you, senator. Who is next . Thank you, mr. Chairman. I want to go back to health care and the tax code for a minute. Again, we are doing tax policy here around health care and when we look at another way, very significant way, to help working people its to help Small Businesses. Ms. Stabenow so i offered an amendment that reflects a bill that ive introduced, the health care for Small Businesses act, and instead of people losing their health care or premiums going up, what we ought to be doing is helping Small Businesses that have the majority of people working for them that dont have health insurance. D in michigan, theres 856,302 Small Businesses, mr. Chairman, and they employ about 1. Million people. When the Affordable Care act was passed, i authored an original Small Business tax credit in the process of going through everything it ended up in my mind losing its strength. It wasnt as robust as i think it should be. Its complicated and many Small Businesses arent taking advantage of the current credit. Its just not as good as Small Businesses need. And only companies with fewer than 1 employees are eligible for the maximum credit right now. So what im proposing is that we have a robust tax credit for Small Businesses where the majority of people are that dont have health insurance. And that is for employees, up to 50 mes, there would be a 50 tax credit. For Small Businesses. Up to 50 employees. And the credit would phase out after a wage income of 50,000. So this would actually be a major win for Small Businesses and for employers and for communities and for our economy if we want to really address one of the big pulls right now in providing health care and bringing back health care costs. It would be to support Small Business. And so the amendment is, as i indicated, is based on a bill i have that was supported by the National Retail federation, the Small Business council of america, the National Association of insurance and financial advisors, third way, Small Business majority, and main street alliance. This would be a very positive change in the tax code that would help more people get health care and would help Small Businesses. And i would urge colleagues to support it. Mr. Chairman. I recommend a vote against this clerk will call the roll. The clerk mr. Grassley. No. Mr. Crepo no. Mr. Roberts, no. Mr. Enzi. No. Mr. Cornyn. No. Mr. Thune. No. Mr. Burr. No. Mr. Isakson. No. Mr. Portman. No. Mr. Toome. No. Mr. Heller, no. Mr. Cassidy. No. Mr. Wyden. Aye. Ms. Stabenow. Aye. Ms. Cantwell. Aye. Mr. Nelson. Aye. Mr. Menendez. Aye by probblingsy. Mr. Carper. Aye. Mr. Car kin. Aye. Mr. Brown. Aye. Mr. Bennett. Aye by proxy. Mr. Casey. Aye. R. Warner. R. Warner. Aye by proxy. Ms. Mccaskill. Aye. Mr. Chairman. The chairman votes no mr. Bennett. Aye. Mr. Hatch clerk will report the result. The clerk the final tally is 12 aye, 14 nays. Mr. Hatch amendment is defeated. We go to senator cantwell number 2. Senator cantwell, its your amendment. Ms. Cantwell i hope we have enough time to discuss this amendment because this is one of my fundamental concerns about this bill. When we started saying we were going to talk about tax reform and changing making our corporations more competitive, as somebody who represents a state with a lot of international companies, i wanted to talk about that. I wanted to talk about the innovation economy of the future. And what we could do to stir and innovate more given our tax code. But as we discussed this and we changed our policies from not being a revenue neutral bill and certainly not focusing on closing some of the loopholes within corporations, thee the attention was turned to getting revenue to pay for the Corporate Tax break from our state and local deductions. Now why is that most concern to me . Because i feel like so much of the debate is focused on these large, east coast states. The state of washington, like several other on this panel, nevada, and florida, and south dakota, and wyoming, we dont have an income tax. And if you look at the states that ranked in the top whatever, 15 or 20, as most tax efficient states in the country, those that dont have a major tax, our economy has grown faster than the National Average every year since world war ii. So we have grown an economy, we have grown great businesses. But we have also attracted and depended on our ability to deduct our local sales tax, our sales tax, our property taxes, and obviously were having this debate over in the house about other issues. The point here is this. The majority of funding of this bill is based on these local deductions. And i have done my best to keep pace with the changing of these legislative proposals for the last 10 days. Every day i ask for, well, how does it affect our constituents . And as we continue to complain about the fact that so much of the burden is taking away deductions from our citizens an raising their taxes, people keep changing the bill. So the house has made changes. They probably promised a lot more people they were going to make changes today. Here in this committee weve made changes. We continue to make changes. In fact, mr. Barthold do we have the latest j. T. C. Scoring on this . A couple of tais ago i had the estimate that it was 20 of this middle income group which ended up being about 300,000 people in the state of washington. So ive asked for the latest table, do we have the latest table . You have the latest revenue table for the chairmans bill as modified. Ms. Cantwell do we have a distribution table . That was distributed this morning, j. C. X. 17. Ms. Cantwell that shows the percentage of people affected. The number of people in each income area that will be affected. The last page of the table, of jcx58 page 7, provides the estimate of the number of tax filing units in each income category. Ms. Cantwell the number of people whose taxes go up and the number whose taxes go down . We have not completed an analysis of that. Ms. Cantwell thats what i thought, i was just verifying that. Thats my point, mr. Chairman. This is a very important issue for my state. And its a very important issue about the overall debate of this tax bill. Why should we pay for a Corporate Tax break by putting it on the burden of the middle class. And so these deductions, i read a letter yesterday partly from a veteran from my state saying im waking up thinking i might end up paying 5,000 more. Ive given estimates and i know you guys keep making changes to the bills, i hope you can avoid this but you havent gotten there yet. I still have people in my state who are going to pay more tax. Even with the doubling of the standard deduction. Even with the Child Tax Credit changes. Even with all of this. There are thousands of people in my state that are going to pay more. Now, im sure if i went and knocked on the door of these corporations and said to microsoft and amazon and some of the other people in washington state, is that what you intended . Is that where you intended to get this Corporate Tax break . I dont think thats what theyd say. I dont think theyd volunteer, yes, i wanted to go to the suburbs of bell view or auburn and collect money from middle class families to get that. So i hope our colleagues particularly those who come from states where these deductions are so important to us, since we fought so hard to keep them, i will save my debate about double taxation for another day but i hope my colleagues will support me. Mr. Chairman. Mr. Hatch senator grassley. Mr. Grassley i think you want to remember that the existing deduction for individual salt provides a very massive tax benefit to higher income earners, unlike the mortgage interest deduction, theres no property sale and tax and state and local Tax Deductions. 70 of the taxpayers largely working families and middle class claim the existing standard deduction. And thus get no benefit from this deduction. For medium income that would be 50,000 roughly taxpayers and below, almost 90 get no benefit from this deduction. The Tax Policy Center which is often favored by the democrats, tell us that 40 of the salt deduction goes to the top 1 . So i think its pretty clear that what we have done for middle class americans by doing away with this deduction, keeping the tax code still very progressive, is the right thing to have done. To help middle income taxpayers. So i hope youll vote against the amendment. Mr. Chairman. Mr. Hatch senator cornyn. Just briefly, i have some sympathy with the position taken by the senator from washington, we dont have an income tax in texas, we have had to fight for years to get permanent deduct blingt of state property taxes and finally were able to do so. Mr. Cornyn were willing to give that up in order to bring down tax rates for the middle class and try to get this economy growing again. And you cant bring down tax rates if youre going to maintain all the deductions and tax expenditures. So somethings got to give somewhere. I think this is a reasonable way to do that. And then finally, it just strikes me as wrong that federal taxpayers have to subsidize state and local taxes which are supposed to be expressly for state and local services. Fire, law ens forment, enforcement and the like. Why should the taxpayers of my state have to subsidize the provision of those states in some other state . It makes no sense. What this does is makes it clear that the federal taxpayer will no longer do that so we can bring down the rates for everybody including the middle class and if the state and local governments want to tax their state and local residents to provide state and local services, then they should do. So they should do so. Senator nelson, your time has expired but ill grant you a minute later. But im going to turn to senator toomey with has time. Sen. Toomey thank you, as determined. Disagree with the senator from washington. It is a good conversation to have, but from my view, what is fundamentally unfair is to ask taxpayers in some states to highcost state and local taxes in other states. But it is not only a statebystate thing, it is also unfair within the state. Imagine just for a quick example, 2 families that are very, very similar, but they have to live on different sides of the boundary. One in a relatively rural township, the other nearby in an abutting borough or city. Their financial circumstances are the same. The borough provides more services. It picks up the trash and it picks up leaves, for instance. And it charges more in taxes for that. Meanwhile, on the township side, the person who lives there and has to go and sign a contract you have to pay a company to come and take your trash and you have to pay another company to take your leaves. The latter is not deductible. Why should you be able to deduct the exact same cost for the exacting service just because it is paid through the municipality . It is not fair. It is not fair at the state level, but it is also not fair within a state. I think the fairest way is to end the election and that people decide how much they want to pay in state and local taxes as determined through the local government. Sen. Hatch thank you, senator. Our time is up, but i will read and i fermented to the sen. Nelson even though your time has expired. Sen. Nelson i havent spoken yet. Sen. Hatch your time is expired, but i will give you that minute. Sen. Cantwell we were hoping that since he was such a central part of the debate sen. Hatch i dont have a problem with that sen. Nelson you are giving me a minute on a part of your bill that will drive a stake in the heart of the florida economy that is so much guilt around around real estate. The fact that we dont have an income tax, a lot of the tax comes from the Real Estate Tax and the sales tax. What it will cause inevitably is the cost of homes to go up, the cost of real estate to go u p, and where the high realestat e taxes cannot be used as a deduction against income, even on all of these people that you say are going to be helped, you call them middle income, but you show this on the tax tables this morning that everyone under 100,000 of income is not going to get a tax cut. They are getting a tax increase. So this provision, unless we get some modification, is going to harm a great number of people that, in a growth state where you have real estate transactions, that is going to be a real stake in the heart. Sen. Hatch i understand sen. Wyden will be the last one. I wantden mr. Chairman, to emphasize, as you and i have in our discussions for days, that this is an enormously important issue, and our colleagues, i believe, have got to have the time to get into it. Colleagues, this is the first deduction that was part of the first income tax. It goes back a century. And it goes right to the heart of the federalstate relationship. And my colleagues are saying you just cant do this in a couple of minutes. And as ive stated, mr. Chairman, we have talked about it for days, this is the one that i felt would take some additional time. Colleagues who are speaking here are not interested in being obstinate, but i think you can see the enormous impact this has on their state, and i asked respectfully that they are given additional time. Sen. Cantwell i have a deal for you, mr. Chairman, i will knock off my amendment if you give me a couple minutes to speak on this. If you will not give me a couple minutes to speak on this, i will hack off my amendment so i can speak to this important issue in my home state. Sen. Hatch i dont want to set anybody off, but this is getting to be ridiculous, but go ahead. Sen. Mccaskill well, as i say, i will be happy to withdraw my imminent if you give me a couple minutes. Sen. Hatch youve got a couple minutes. Sen. Mccaskill thank you very much. Highly unlikely people in my state what is the standard reduction. Mortgages. M have it is highly unlikely those folks are going to use the standard. That is 224,000 people that will lose this deduction, they dont have the benefit of the standard deduction doesnt work for them. So it is a real problem, and what my amendment was going to do, which im going to withdraw by the way, and senator heller, using my inside a voice, i want you to our knowledge. Im not fired up, im not hollering and anybody. Keep in mind that all the businesses get to keep his. Sen. Toomeys eloquent nation about how unfair it is for people eloquent explanation about how unfair it is for people to take the state and local production why is it that the businesses get to keep it . By easy business is good to keep that and individuals dont . Yield . The senator sen. Mccaskill let me finish. Why does the Business Park across the street from the homeowner in st. Louis that has a 250,000 home and they make 150,000 a year why does the business person that owns that building dead to deduct the property tax and the homeowner doesnt . It is the same thing with moving expenses. All the stuff you are leaving in , and if itusinesses is good for the goose, it is good for the gander. It is such an unfair thing for to subsidize unfair subsidize other states, then why are we letting businesses do it . Sen. Toomey is the senator yielding . Sen. Mccaskill i think ive used might sen. Toomey heres my answer for this the tax system we have has always been conceived of as a different system for business that for individuals. For business we are always about taxing the net income, not the gross income. We are always about allowing business to deduct the ordinary energy costs of operating the business so we can get to that net. After all the costs, what is the net income . That is what we tax. For individuals, as a general matter there are some exceptions, but as a general matter, we tax gross income. I have absolutely necessary expenses the gas in my car, the food that i buy for my kids, clothes. I will take my time back. It makes no sense you are getting rid of the mortgage deduction. If you are going to follow that reasoning and say this is about gross income versus net income, you are picking winners and losers here, and the losers are that family that has home i will use my outside voice if you are not careful. Is that couple who has that couple who has at home across from the Business Park. And i dont think that your argument holds water, because it seems fair to me, if you let the business do it, you ought to let the individual to it. Thank you, mr. Chairman. And i will withdraw my amendment, which will save time. Call the roll. Sen. Hatch we crafting a deal here you have used up your time. Is. Me what the deal sen. Wyden mr. Chairman, you and your staff have been very constructive. If sen. Cantwell could go, cardin, and i will take a minute and a half at the end. Sen. Hatch ok, and then we will vote on all three. Were stacking votes. Chairman, i want at least three minutes if im going to give up my fiveminute amendment. Marilyn has the largest sen. Hatch i dont have any problem. I dont want to cut anybody off. But im getting sick and tired of all this. You can only push me so far. Cantwell, isen. Guess you are out. Sen. Cantwell sen. Hatch come we care about you, ok . Sen. Hatch i hope so. Sen. Cantwell here is the issue. I want to make sure because i took all the five minutes, i feel bad, and this is such an important issue. Of this whole thing. But in addition, there was a policy as somebody who has fought many, many times for the local productions, there is the primary issue of when you pay your state tax, why are you then having to pay again on that same amount of money . Why . What is the purpose of that . So to me, this whole notion that we are getting rid of that, to me it just seems like people are so willing to give these corporations every benefit of the doubt. We are not closing the loophole on the golf courses and their tax rate. Were not even having a real debate about that. But yet we are all of a sudden saying all of these things are wrong, and i would say, i would match our states economy and tax code and the number of businesses that are there and what their outlook is as it relates to this legislation, and say that we could do better. And the notion that we are not going to keep this principle of not taxing individuals twice by not allowing them to deduct their state obligation, i just think is going a long way down the road against what your party has been for in the past, and i think it sets a very bad president national. Dent nationally. Sen. Hatch all right, senator cardin is next to me is going to take three minutes, senator casey after that, one minute, and the democratic leader one minute as well. Whoever wants to speak up here and have the time . Sen. Cardin met me just point out that in my state of maryland, almost 50 of the taxpayers use the state and local the duction. Lets get the numbers here. We are talking about a large number of taxpayers. I served in the state legislature. Were talking about the constitution and federalism, the same taxpayers that pay the same taxes, and there is respect for the same levels of government, and when you try to draw a comparison between what is done in the private sector versus the public sector, there is a difference, and i think we should respect the Different Levels of government. Taxe is something about the that is blatantly unfair, and that is what this does when you repeal the state and local tax reduction. The reason i offered my asked, this, as i elimination of the state and local tax reduction will have an effect on the value of real estate. It will. It makes it less valuable to own real estate if you cant deduct the property taxes on that. That is going to affect the value, the wealth of americans. We havent even considered the impact on that. Mean the Balance Sheet of americas wealth is going to go down because of this amendment. It means that the propertyassessed values of local governments are going to go down as a result of it. That is going to have an effect. Do we know how much . No, because we have not had a hearing on that issue. And we certainly should have hearings on that issue. It affects every state in the country, and no mistake about it. Maryland might be highway 50 using it, but they are taxpayers in every state that will be disadvantaged with the elimination of state and local Tax Deductions. And quite frankly, you have made it much more extreme that even the house bill on this issue and making it that much more detrimental to the taxpayers of this country. Toould just urge us recognize that this is the United States. I heard one of my colleagues mentioned, well, maybe one state is different than the other. Every state is different, but i tell you, maryland taxpayers pay more into the federal government than the director returns we get, and we are very happy to contribute to the national , agriculture in one state, Natural Disasters. But when you make a decision based on one state of the United States when we all looking at tax halcyon as country, im telling you that you are drawing a very dangerous line when we are trying to have comity and work on what is best as a nation. This is extremely dangerous to the concept of federalism, and it really i think is offensive to the taxpayers of this country. Sen. Hatch the senator makes some good points. We go to sen. Scott next, and then we will vote. Sen. Scott next, and then we will get to sen. Casey for one te, and then sen. Scott thank you, mr. Chairman. Im learning the fluid definition of comity today. Quite difficult to digest why South Carolina taxpayers ought to be subsidizing taxpayers in a high tax states. I havent been able to digest that. I think the average person in South Carolina wont be able to digest it either. I think that whether it is in maryland or virginia or connecticut, new york, new jersey, wherever it is, red state, blue state come wherever it is from here are the facts on salt. 88 of the folks who benefit from the salt are folks in the 100,000 household or higher. Top 2 of top income earners in this country will stop if we are really talking about helping the hardworking middleclass, the folks who are working paycheck to paycheck, the salt skews itself towards the higher income. It is interesting to see my friends on the left now engaging in a conversation about double taxation that does kind of sound like Capital Gains conversation. R an estate tax conversation but one third of the benefit of those who receive the salt goes to households over 500,000 of income. 1 benefit of the 100, goes toof households over 500,000. So i am astounded that my friends on the left who spent the entire day talking about those folks in the lower side of the tax bracket are now finding fromto extract resources the same people. That they were talking about earlier. Ive been quiet today. I had a good time yesterday. To do thisrying process a little quickly. But there is a level of hypocrisy that seems to be higher than it was this morning, because now we are on the exact opposite side of the issue. Sen. Hatch sen. Casey for one minute. Chairman, inr. Pennsylvania the numbers are a lot higher in terms of the people affected. 86 of the people of pennsylvania taxpayers claiming the state and local deduction make under 200,000, and of that 86 , more than 800,000 people make less than 100,000. This affects a lot of people well below very wealthy levels. Sen. Hatch ok, senator wyden, you are up. Sen. Wyden mr. Chairman, thank you, and i will be very quick. We have touched on the history. This goes all the way back to the federalist papers. We havent had a hearing on this. My understanding is there are still questions about the distribution table. My amendment is real simple. There is not a person in this room who isnt a supporter of the First Responders firefighters, police officers. In our part of the world, those who are containing the deadly and destructive fires that ravaged a big chunk of the west. Lion and it is really straightforward, and that is an amendment my amendment is really straight forward, and that is an amended that would restore the state and local election in Public Safety is threatened. That would be determined by the treasury secretary in consultation with the secretary of homeland security. They make a determination that Public Safety, is essential Core Services that are a lifeline for our people in danger, are affected, that would restore the state and local deduction. Mr. Chairman . Sen. Hatch all right, were going to vote three times. First, senator cantwells amendment, then sen. Cardin, then sen. Wyden. Sen. Cantwells vote is no. Can i make those 10minute votes . We are good. Youre already finished the day. Sen. Hatch called the vote. The clerk mr. Grassley no. Mr. Crapo, no. Mr. Roberts . Mr. Roberts . No by proxy. Mr. Enzi, no. Mr. Cornyn, no. Mr. Thune, no. Mr. Burt, no. Mr. Isaacson, no. Mr. Jimmy no. Mr. Scott, no. Mr. Cassidy, no by proxy. Ms. 70, aye. Mr. Nelson, aye. Mr. Menendez . Aye by proxy. The clerk mr. Cardin, aye. Mr. Brown, aye. Mr. Casey, aye. Mr. Warner, aye. Ms. Mccaskill, aye. Mr. Chairman . Sen. Hatch no. The clerk will announce a result. Nays. Erk 12 ayes, 14 sen. Hatch sen. Cardin. Sen. Crapo mr. Grassley, no. Mr. Crapo, no. Mr. Roberts . I was born in 1790. Sen. Hatch no by proxy. The clerk mr. Cornyn, no. Mr. Burr, no. Mr. Portman, no. Mr. Jimmy, no. Mr. Scott, no. Mr. Cassidy, no. Mr. Wyden, aye. Ms. Stanton now, aye. Ms. Cantwell, aye. Mr. Menendez, aye by proxy. Mr. Carper, aye by proxy. Esther brown, aye. Mr. Casey, aye. Mr. Warner, aye. Ms. Mccaskill, aye. Mr. Chairman. Sen. Hatch no. The court will report. The clerk 12 ayes, 14 nays. Sen. Hatch the amendment is defeated. We go to wyden now. Casey number 10 . Is that would yours is . Where did you get casey number 10 . Sen. Wyden no, i dont think that is First Responders. Sen. Hatch First Responders, senator wyden. The court will call the wall. The clerk mr. Grassley, no. Mr. Crapo, no. Mr. Roberts, no by proxy. Mr. Enzi, no. Mr. Thune, no. Mr. Burr, no. Mr. Isaacson, no. Mr. Toomey, no. Mr. Scott, no. Mr. Cassidy, no. Mr. Wyden, aye. Ms. Stanton out, aye. Ms. Cantwell, aye. Mr. Nelson, aye. Mr. Menendez, aye by proxy. Mr. Carver, aye by proxy. Mr. Brown, no. Mr. Bennett, aye. Mr. Warner, aye. Ms. Mccaskill, aye. Mr. Chairman . Sen. Hatch no. 14 nays. 12 ayes, sen. Hatch the amendment is defeated. Now we go to casey . Sen. Casey thank you, mr. Chairman sen. Hatch sen. Casey, you are up. Mr. Chairman, we have learned over the course of the last number of days that accompany that is outsourced jobs will be paying less in taxes that a company that cap to the taxes kept their taxes here. That is happened to often in states like pennsylvania and in the lehigh valley, we are losing 400 60 jobs to our call center moving jobs overseas to take advantage of cheap labor. Would indicate that companies receiving the preferential corporate and International Tax rate must report average and median International Worker wages, including wages of employees for third parties, contractors and vendors. For each dollar of the lesser of the two measures that is below the u. S. Minimum wage, increase the effective foreign tax rate by earning one percentage point. I asked for a yes vote. Sen. Hatch clerk will call the roll mr. Chairman, just a moment. Havent spoken in a while, mr. Chairman. I know you have missed me. Yes, but you have about 30 seconds. Sen. Brown starting out more starting at the beginning . Ok. My questioning of ryan abraham earlier on this issue clearly shows that as much as we have all complained about the tax code now allowing you are encouraging you to shut down in athens orove to shutting down athens, ohio, and moving to athens, greece, this bill, and mr. Abraham in my questionandanswer session couple days ago, makes it worse. Why in the world would we do more to give more incentives to companies to shut down and move overseas . Didnt President Trump he won my state in large part because of those sorts of issues, and if we are going to make this worse it is just beyond the pale to me, and i support the casey amendment. Where are we . Sen. Hatch rollcall vote . Casey 10 . Call the roll. The clerk mr. Grassley, no. Mr. Crapo, no by proxy. Esther roberts, no by proxy. Mr. Enzi, no. By proxy. , no mr. Thune, no. Mr. Burr, no. Mr. Portman, no. Mr. Toomey, no. Mr. Heller, no. Mr. Scott, no. Mr. Cassidy, no. Mr. Wyden . Sen. Wyden aye. Enow, aye. Ms. Stab ms. Cantwell. Sen. Wyden aye by proxy. By clerk mr. Nelson, aye proxy. Mr. Carper, aye by proxy. Mr. Cardin, aye by proxy. Mr. Brown, aye. Mr. Bennett, aye. Mr. Casey, aye. Mr. Warner, aye. Ms. Mccaskill, aye. Mr. Chairman . Sen. Hatch no. The clerk 12 ayes, 14 nays. Sen. Hatch the amendment is defeated. Go to mccaskill number six, i guess. Sen. Mccaskill, you want a vote on your amendment . Sen. Mccaskill yes, please. One minute quickly to talk about it sen. Grassley thought you werent going to offer the amendment. Sen. Mccaskill personal casualty loss. Sen. Hatch go ahead and take a minute. Sen. Mccaskill mr. Chairman, i imagine that there is a business lets say the Dominos Pizza franchise on the first floor of a building, and then a family lives above the pizza franchise. Unbeknownst to both of them, their Fire Insurance has lapsed, and there is a fire. Now why is it that the owner of the Dominos Pizza franchise gets to deduct the losses from that fire but the family doesnt . Yhis is just a parit amendment about property and casualty deductions. In mye a lot of flooding state. It doesnt get to the level of National Disasters declared by the president. We have a lot of tornadoes. There is lots of people that are impacted at end up running into the zone of a Natural Disaster that dont end up getting into the zone of a Natural Disaster, five. I dont understand why property and casualty loss remains deductible to a business but not to a family. That is what this amendment would do. The offset is modifying amt repeal in the legislation only to the degree necessary to offset the reinstatement of the personal casualty loss reduction. Thank you, mr. Chairman. Sen. Hatch all right. Ok. Clerk will call the roll. The clerk mr. Grassley, no. Mr. Crapo . Sen. Hatch no by proxy. The clerk mr. Roberts, no. Mr. Enzi, no. Mr. Cornyn, no. Mr. Thune, no. Mr. Burr, no. Mr. Portman, no. Mr. Toomey, no. Mr. Heller, no. Mr. Scott, no. Mr. Cassidy . Sen. Hatch proxy for the the clerk mr. Wyden, aye. Ms. Cantwell, aye. Mr. Nelson, aye. Proxy. Endez, aye mr. Carper, aye by proxy. Mr. Cardin, aye. Mr. Bennett, aye. Mr. Casey, aye. Esther warner, aye. Mr. Mccaskill ms. Mccaskill, aye. Mr. Chairman . Sen. Hatch no. Nays. Erk 12 ayes, 14 sen. Hatch the amendment is defeated. Are we going to go to another one by sen. Bennet . Thank you, mr. Chairman. I would be very brief. This amendment would strike the Child Tax Credit in the germans mark and replace it with the child tax edit with the same maximum level per child as is in your legislation, but designed so that a private in the army, a bartender, a construction worker, farmer, rancher, or fulltime minimumwage worker earning the median and i and wil wait for their profession would receive the same Child Tax Credit announced her child as provided to a person earning an income equal to the salary for members of congress and senators. Working earning the median wage in each of these professions should earn the same childlike credit for child as members of congress or senators from whether they have 1, 2, or more children. I yelled back. Sen. Hatch any further debate . The clerk mr. Grassley, no. Mr. Crapo. Sen. Hatch by proxy. The clerk mr. Enzi, no. Cornyn, no. Mr. Burt, no. Mr. Isaacson, no. Mr. Portman, no. No. N. Cantwell mr. Scot, mr. Wyden, aye. Ms. Stabenow . Aye. Ms. Cantwell, aye. Mr. Nelson . Aye by proxy. This tremendou mr. Menendez, aye proxy. Mr. Carted, aye. Mr. Brown, aye. The final tally is 12is, 14 nays. Senator cardin im bringing up my amendment number three. Theamendment would improve savers credit that is available letretirement savings trade me explains for retirement savings. Let the reset the reason for this. Challenge for individuals being able to contribute to retirement, particularly, lower taxme, is that the incentive, the deductible, the pretax aspects of it, for some, are just not enough. What is happening with this bill of course, with reducing rates, it even makes the Tax Advantages of contributions a little bit who putiting for those in money for retirement. If you put money on the table, that can be very helpful. On her own savings, the number of participants is pretty high. If you dont have an employer putting money on the table, its puter to get people to money away for their retirement. The savers credit provides a meaningful way to get particularly, lower income people into the retirement savings. That is offered along with senator brown and casey would make that credit so that we can increase retirement savings, typically for lower income wage earners, in light of changes that might have the unintended consequences of reducing incentives for individuals to put money away for their retirement. The offset is in the estate tax. My colleagues to support this amendment. Mr. Chairman, could i speak to that thank you. Theres another reason to support 30 seconds. Theres another reason to support this amendment. That is that senator crapo and i come and working groups that may be senator ridgely senator baucus, white came up with, working through what we did on savings and investment, included these preventions. There was strong bipartisan agreement on that. This is a chance to show bipartisanship on an amendment that will help workingclass families save. If we want to look out for workingclass families, this is a good example tonight. I would mention, i dont test think theres much bipartisans hip either way tonight. We are just going through the motions as far as im concerned. Senator of ohio. Cardin, then congressman cardin, is the father of this in the fourtime carter legislation. I think its working. There are millions of people saving who wouldnt otherwise. There was rumors about either the house bill or this bill finding savings in that area. That did not happen because, on this catch, we stood together in a bipartisan basis to keep that from happening. I do think this is an area where we can enhance savings for folks who needed the most. The clerk will call the role. [voting] the chairman votes no. Is, 14l tally is 12 nays. The amendment is defeated. His senator nelson ready with his amendment, number 4 . Senator nelson yes, sir. The treasury loses billions of dollars each year because criminals are filing false tax getting refunds, and it is not theirs. It is unbelievable that some florida, in a city in on the actual street crime, have the crime was dropped, because the criminal figured out they didnt need to break into peoples houses to get money; they could do it with a laptop. They were submitting false tax returns. Back then, it was to the tune of they lost to the treasury of 5 billion a year. We did some improvements over time, got the irs to straighten up some things. The losses today are still 3 billion a year. Money that isr going to criminals who defraud the irs. There are a number of things we can do. Its the essence of a bill that, about a dozen of us have filed. Therefore, we would gain this revenue back. Chairman . Chairman hatch yes, sir. Senator how is that for a short expedition of the amendment . Chairman hatch that was good. The chairman will call the role. [ can i just speak for a second on that . I will be very brief. Senator nelsons amendment is extremely really important. We have then looking at this in the finance committee. Challenges. A lot of hackers are, as always, trying to stay one step ahead of law enforcement. They use out of wallets information, a variety of other things. Thats important commandment. Rman hatch th it is passed out of committee. It is passed. Chairman hatch the clerk will call the role. [voting] the chairman votes no. The final tally is 12 is 14 nays. Hatch the amendment is defeated. Who is next . Ok, senator nelson. Senator nelson mr. Chairman, i call up amendment 194, nelson amendment number six. Youve tried to reform the tax code and make it thater, but the fact is what you are offering today, many Small Businesses are going to find a lot of intricacies in this bill, and the. Of regulations. A lot of Small Businesses have a lot on their plate to try to run their business, and they dont and the time for the inns outs of the tax code. For the inns and outs of the tax code. Is going to be legal jargon that few people will understand, so what this amendment does is try to put into the code a simple way to ensure taxpayers can file their taxes without having to learn the tax law or to incur the cost of the tax professional. It directs the irs to work with the private sector to create a to help smallol Business Owners fill out the tax forms and file returns electronically. Much like what is done under the irs refile program. We should use this opportunity to put in place policies that are going to make it easier for file their taxes. Most Small Businesses do not live and breathe their tax law. This is a good government, private citizen, Small Business amendment. I would think you would want to accept this amendment, mr. Chairman. Hatch normally, i might. The clerk will call role. [voting] the final tally is 12is 14 nays. Is, 14 naychairman hatchs. The amendmenttch is defeated. Did they ask for this . [chatter] senator bennett . Im withdrawing number 10. Chairman hatch i am proud of you. Very proud of you. [laughter] menendez, seven as i understand it. Are you offering that . What amendment . Chairman hatch menendez seven. We dont have to do it. Why we make this come up why dont we make him come up . Senator carper, carper six. Senator carper mr. Chairman, colleagues let me justh interrupt. I hope we can get rid of this long ordeal. Its not going anywhere. I dont blame senators who want to score political points, and i understand that, but keep doing this over and over and over, it does make sense to me. You have a right to do it, and if you want to do it, we will keep going. We will go to you, senator, then go from there. Thanks, mr. Er chairman. My amendment number six replaces the Global Income tax with a country by country minimum tax. I think most of us will agree with that the International Tax system is in desperate need of reform. Work under the leadership of senator schumer and parkman. You two are on a task force created by our leadership. Lead,sk force that they and the one i participated in, is called the International Tax working group. Inhink we were established 2015, as i recall. I have a lot of respect for senator sportsmen and schumer, who led the working group, and try to forge a work workable consensus on International Tax reform. This bill lacks sufficient guard needed to stop or prevent companies from moving jobs overseas, and shifting profits to tax havens. The new tax system for this bill is not does not include an effective minimum tax. This includes something called ,n tangible low tax income which goes by the acronym of guilty. Marcusesans complicated formulas that allows companies to avoid paying taxes on their routine the chairmans marks allow companies to avoid paying taxes on their routine filings. The problem with this is that the tax is calculated on a global basis. That means that multi and multinational Country Company can average its income across many foreign countries. They can put money in tax havens, and shove other earnings in a high tax jurisdiction, through something that is calle through something that blends the earnings to get the best tax result for them. That does nothing to shutdown tax havens. That does nothing to stop multinational corporations from gaming the system. I think we can do better than that. A minimal offering today tries to fix that, by including an tax. Tive minimum if the company has shifted all of its profits and intellectual property to a tax haven, then that company should have to apply a minimum tax to that haven. To my colleagues, i would just say this i am not going into the details here. Im trying to make the point that we can do something that is cleaner, something that is simpler, and i think something that is fair. I urge this committee to include a country by country minimum tax to ensure we shutdown tax havens once and for all. Mr. Chairman . Mr. Chairman . Im not going to ask for a record photo in this, but i want to be able to lay it on the floor. This is one of those areas where we can find common ground. If not tonight, hopefully in the days ahead. Mr. Chairman, could i speak conds . Se exactlyexactly, outlines the problem about this fixes the effective minimum tax issue. Its the average of country by country. It turns upside down. We all have spoken time after time in our states about this problem, of countries shutting down in wilmington or cleveland, and moving to china or mexico. Inknow why they do that, many ways, to avoid these taxes. We know they will only encourage more if they dont fix the language of this bill. Following that situation, this makes worse unless we adopt carper brown amendment fixing the effective minimum tax. Thank you, mr. Chairman. Mr. Chairman . Mr. Chairman . First of all, thanks to my colleague, some of senator carper, who joined me on that committee, and was constructive as always, and senator brown also, a constructive player. One of my concerns of where we are headed is we seem to be forgetting what we did two years ago, which is to say, unless we want to a competitive tax code in our country, where we continue to lose jobs if American Workers cant compete globally, we will continue to have exactly what we have had. That is 4700 countries that would otherwise be American Companies now that that are now Foreign Companies based on analysis i have seen from ernst young. We talked about that. We have the proposal we are looking at today, they say those companies will all be American Companies. Three times as Many Companies are buying American Companies as the other way around. We have and months on this, getting behind the corporate boardroom. Things, both of which we probably assumed. , these moves overseas are not tax motivated. Its not regulations, retraining , health care costs, though those are allimportant. For the tax system, this would not be happening. Im delighted that the market represents that. This has been a pipe bipartisan issue in the past, and i hopefully we will be going forward. Senator gordon talked about his tax proposal, adding a tax rate, which is constructive. Someroblem we have is individuals will still want to shift income out of the United States, because at 20 , we are still higher than a lot of other countries. Developed countries are 23 and a half percent, though it is but it is well above this. Singapore, its even above this, sometimes above switzerland. We still have to have this base erosion in place, both on the outbound and inbound. That sent a proposal. Regard to the base erosion provisions, which apply a minimum tax exactly what you are suggesting. Should be country by country, rather than an aggregate of where those companies do business. Senator carper, you said we dont want low tax jurisdictions. These would be subject to a 2 tax. We have got some pushback from the Corporate Community on that. We are saying we will have this tax, and it will be a bind. Weve also said if you are doing business for other tax jurisdictions, like germany, you could take your tax credit there and average those street if you dont, whats going to happen is i will tell you this based on analysis. We can talk about it more away from gush or we could talk about it now. We what we are going to have his companies that are American Companies that still cannot compete, and it is advantageous for a foreign them. Y to buy forget inversions. We are talking about what is happening, three times as Many Companies countries buying Foreign Companies. There has to be the right balance, otherwise American Workers are still in the cold. When these Companies Move overseas, they also take jobs and investment with them. We and to the analysis of form pharmaceutical companies. We spent a lot of time looking at the data. They take jobs with them. I hope at the end of the day, we can continue to have this discussion. We are trying to find a balance. This has been a nonpartisan issue, typically not even bipartisan. Thist to work with you on to make sure we have the right balance. We do have base erosion on here. Foreign companies dont take advantage of the u. S. Market in the way that disadvantages for a while companies or delaware companies. Effectively, and minimum tax on the inbound side. We have negative feedback from some Foreign Companies that have investment from the United States, but we are just trying to have a fair balance. Have this, which will stick on the outbound side. ,f you bring your ip back here you get a benefit, which is a lot like the boxes other what other countries have read in the end, the we think this will result in more jobs in america. We have to have the right balance. Mr. Chairman, 30 seconds on that if i could. Its important to remember, before we get ahead of this working group, senator cartman, and others remember that a component of that was revenue, 250 billion for the structure. Lets not get carried away with it successful that group was was successful, but important that we will have revenue and infrastructure. There nothing like that in this bill. We did have serious discussions with the speaker of the house at the time. I was supportive of that. I will tell you, the International Provisions of this bill more than pay for themselves. There is no tax cut on the international side. Produces revenue. Am i right, mr. Myrtle . Vertyl . Thats correct. Chairman hatch let me give the land. The we will give a 20 take a 20 minutes recess, then come back and finish up. Almost summit he has an objection. 20,f we come back at it there is no way we can be finished at 8 30. What do you suggest . We keep going. Im hearing from a number of senators that they still have significant proposals that have to be dealt with. Im happy to keep going if the chairman wants to chairman hatch well take a 20 minute break. I appreciate everybodys cooperation on this. Lot. E not accomplishing a lets take a break, and we will be back here. You have made it easy. Chairman hatch we will be back here at 8 20. [indiscernible] [chatter] [captions Copyright National cable satellite corp. 2016] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] [indiscernible] the Senate Finance committee tonight reviewing the Senate Tax Reform proposal. They will be back in about. This is the next day of reviewing the legislation. A partial repeal of state and local income tax adoptions. It would double the standard deductions of 12,000 dollars for single filers, and 24,000 for married couples. The tax reform plan is limited to 1. 5 trillion over 10 years. That way, it can qualify renewals that would allow the senate to pass it with majority vote. The house passed its tax reform bill in earlier today, 227200 and five 205. No democrats voted for it. You can find more in cspans congressional chronicles, at cspan ordered congress. Senator rudman and is spoke to reporters earlier today after a judge declared a mistrial in his federal corruption case. He thanked supporters for believing in his innocence. He was facing charges including conspiracy, bribery, and abuse of power. For about 10 him minutes. Take a look at that while we are in this break. I want to thank god. It is by his grace that i was delivered from an unjust prosecution. To thank my children alicea, who is here every day with me, and my lovely granddaughter, in new jersey, so i could remember what i had to sign on for. My son
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