Carper Slams Republican Tax Reform Plan On The Senate Floor, Urges Republicans To Work With Democrats On Bipartisan Tax Reform Plan
WASHINGTON – In case you missed it, U.S. Senator Tom Carper (D-Del.), a member of the Senate Finance Committee, spoke on the Senate floor yesterday on the Republican tax reform plan. You may watch Senator Carper’s full remarks by clicking here. His remarks, as prepared for delivery, are below.
“Nine years have passed since I first joined the Senate Finance Committee. For each of those nine years, I’ve looked forward to working on tax reform. As a member of the House of Representatives many years ago, I had the privilege of working on tax reform legislation led by President Reagan, Speaker Tip O’Neill and others.
“But tax reform takes a lot of time, energy and effort. In 1986, enacting tax reform in Congress took two years of public hearings, meetings and bipartisan negotiations. The idea that a permanent and enduring tax reform plan will come to fruition in mere weeks is the triumph of man’s hope over experience. Any tax legislation that is purely partisan, written in the dark, and rushed to the finish line is bound to be poorly designed and riddled with inadvertent errors. A flawed process results in a flawed product.
“When considering any tax policy, I look at it through a prism of four questions: Is it fair? Does it encourage economic growth and job creation? Does it simplify the tax code, or make it more complicated? Is it fiscally responsible?
“Unfortunately, the Republican tax reform plan fails the test on all four of those questions. According to the non-partisan Congressional Budget Office (CBO), this plan would actually increase taxes on millions of Americans beginning next year—by 2019, Americans earning less than $30,000 a year will be worse off. By 2021, Americans earning less than $40,000 a year will be worse off. By 2027, most Americans earning less than $75,000 a year will be worse off.
“In fact, within ten years, more than 77 percent of the tax cuts in this bill will go to the richest 5 percent of Americans. In fact, nearly 62 percent of the tax breaks will go to the richest 1 of every 100 Americans. None of this meets a reasonable definition of ‘fair.’
“This bill does little to foster economic growth—and I fear, in the long run, it will actually impair growth. Last week, a survey of top economists—including economists from across the political spectrum, as well as Nobel Prize winners and former presidents of the American Economic Association—found that only 1 out of the 43 experts surveyed believe this type of tax reform would boost economic growth. Just one.
“The truth is, any economic growth from this bill will be swamped by the deficits it creates. I’ll talk more about fiscal responsibility in a moment, but an important point here is that the increased national debt will be a huge drag on economic growth. More federal borrowing means higher interest rates, which means it will cost more for businesses—both large and small—to borrow to finance investments. It will cost more for families to take out a mortgage. It will cost more to borrow for college.
“One goal of tax reform was supposed to be simplifying the tax code, and reducing unpredictability and uncertainty. Unfortunately, this bill introduces new and complicated provisions. For example, new requirements to claim the child tax credit, and an awkwardly designed tax deduction for ‘pass through’ businesses—that will make it difficult for Americans to file their taxes. As we learned from the Joint Committee on Taxation during consideration of this bill in the Finance Committee earlier this month, this tax bill will actually make the Internal Revenue Code and regulations longer. Making the tax code longer is not simplification.
“A large part of the additional complexity results from an enormous new ‘fiscal cliff’ created by this bill, which will make tax policy unpredictable for families and businesses. Which brings me to my third question.
“This bill blows a 1.5 trillion-dollar hole in the debt, and it will be far costlier than that as the deficits grow in the years and decades ahead. With respect to the ‘fiscal cliff’ I just mentioned, almost all of the individual tax provisions expire within nine years. The bill’s increase in the standard deduction, the increase in the child credit, the new tax rate for ‘pass through’ businesses, and most other provisions affecting individuals will, under this Republican bill, expire by the end of 2025. At the same time, the tax cuts for corporations in this bill are permanent.
“Many of our friends on the other side of the aisle are saying that all of these individual provisions will be extended and made permanent. Well, if that’s the case, then why not do it now? The truth is, extending these provisions would dramatically increase the deficit—adding far more to the national debt than the $1.5 trillion that this bill already costs. Making the individual provisions temporary and the corporate tax cut permanent is, at bottom, an elaborate attempt to ‘have your cake and eat it too.’
“At best, making the individual provisions expire is, simply put, an elaborate scheme to hide the true cost of this tax bill, obscuring the fact that this bill will add much more to the debt—possibly twice as much—than the $1.5 trillion that’s been advertised. At worst, making the individual tax provisions expire is a sneaky way to increase taxes on American families—all in order to pay for a permanent and expensive corporate tax cut. Either way, the result is unconscionable and an affront to fiscal responsibility.
“It doesn’t have to be this way. Instead of rushing ahead with a partisan product that haphazardly remakes the American economy, there are many areas where Democrats and Republicans could work together on tax reform. One of those areas is the standard deduction. I would support a well-designed proposal to double the standard deduction, which would simplify filing for taxpayers.
“Another area where we can find common ground is the corporate rate. I think many of my Democratic colleagues would agree that business tax rates should be reformed to ensure that American businesses remain competitive with our global trading partners. While lowering the rate to 20 percent is far too low and certainly too fiscally irresponsible, a more sensible and moderate proposal would bring both Democrats and Republicans together.
“Another area for common ground is the child tax credit. This bill increases the child credit, but fails to deliver the benefits to the middle- and working-class families that need it the most. A better tax reform proposal would have reformed the child credit to be fully refundable and, just as importantly, permanent.
“Despite these many areas for bipartisan agreement, our Republican colleagues’ partisan rush to the finish line leaves us with no room for negotiations on a plan that blows a $1.5 trillion hole in the debt while actually raising taxes on millions of Americans beginning next year.
“President Trump made three promises on tax reform: Not to help people like him by providing excessive tax breaks to the wealthiest people in our country, to put money back into the pockets of hardworking Americans and to simplify the tax code. Democrats are all-in on a tax reform plan that keeps those promises. But, from what we know, this plan does nothing to fulfill the president’s three promises. I join my colleagues in urging Republicans to slow down and work with Democrats on a plan that’s actually fair, fiscally responsible, encourages economic growth and job creation, and simplifies the tax code.
“I’ll end with an African proverb: ‘If you want to go fast: travel alone. If you want to go far: travel together.’ We need to travel together. If we do, we’ll go far, and we’ll lift with us the economy of this country and the families who need our help.”