Brady: Dems’ tax bill ‘truly a tax cut for the few’

December 11, 2019 — In Case You Missed It...    — Opening Statements    — Press Releases   

WASHINGTON, D.C. –  The top Republican on the House Ways and Means Committee Kevin Brady (R-TX) delivered the following statement at a Full Committee debate of H.R. 5377, a partisan bill that would repeal the cap placed on the regressive state and local deduction as part of the 2017 GOP tax cuts.

CLICK HERE to watch the markup.

Remarks as prepared for delivery: 

“Thank you, Chairman Neal.

“Today our Committee will watch our Democrat colleagues champion a huge tax cut for millionaires and billionaires, while the middle class in America gets nothing.

“We will debate their insistence on hiking taxes on small businesses across America to pay for their massive tax windfall for the wealthy 1 percent.  

“Even worse, this regressive legislation is a starter pistol for a new race among state and local leaders to raise property taxes, sales taxes, and income taxes even higher on working families and local businesses. As if these unpopular taxes aren’t brutal enough.

“This bill truly is a tax cut for the few.

“According to the liberal Tax Policy Center, only 1 percent of taxpayers in America paid more taxes last year due to the reasonable SALT cap. In California, only 2 percent; New York, a mere 3 percent. 

“The rest of taxpayers either received a tax cut or broke even.

“That’s because the Republican Tax Cuts and Jobs Act lowered taxes on income across the board, doubled the child tax deduction and expanded it to more families, doubled the standard deduction so more working families kept more of what they earned, and eliminated the Alternative Minimum Tax for households making less than a million dollars. That was important because more and more families found the AMT canceled out their charitable and SALT deductions completely.

“Another myth that’s been debunked is that tax reform hurt state budgets. Just the opposite.

“Many states across America enjoyed a windfall in new revenues with stronger economies, more workers, and an expanded tax base.

“California Governor Gavin Newsom wrongly predicted capping the SALT deduction would result in lower revenues for California.

“In truth, his state brought in $3 billion more in personal income taxes than he predicted. It was the same story in all the high-tax states, including New Jersey.

“The question is: what did these states do with their windfall? Did they pocket these extra dollars, or pass them through to their families and local businesses by reducing state and local taxes?

“To their credit, 13 states reduced their SALT tax burden. But not the high tax states.

“Worse, states like New Jersey actually raised their state and local taxes while New York, Illinois, and Massachusetts are debating even higher SALT taxes.

“If governors, legislators, and mayors keep raising local taxes with a SALT cap, imagine how high they’ll raise them with a green light from Democrats in Congress?

“There is a price to be paid from high state and local taxes.

“These are terrific states with dynamic economies, but according to MoneyWise.com, the top four states Americans are fleeing from are New Jersey, New York, Connecticut, and Illinois.

“Millennials are doing the same, but you can add California to that list. These young people love their states, with good reason, but they just can’t see a future there with high taxes and high costs.

“In the end, why should low-tax states be forced through the tax code to subsidize high-tax states?

“Why should a farmer in Nebraska subsidize a banker in Manhattan? 

“Why should a single mom in New Jersey, or a janitor in a building who doesn’t itemize their taxes, subsidize the billionaire in the penthouse who does?

“That’s what this bill does – because more than half of the SALT deduction goes to millionaire and billionaire households.

“The SALT cap of $10,000 is higher than the national average of SALT deductions, and because of GOP lawmakers in high-tax states who weighed in, it can be used for property, sales, or income taxes, and the AMT was eliminated.

“Thanks to pro-growth tax reform, our U.S. economy has roared into gear as the most competitive economy on the planet, with the lowest unemployment in 50 years, paychecks increasing the fastest in more than a decade, wage growth outpacing inflation by $1,000 a year for average working families, American manufacturing is back, and we have a million more job openings than workers.

“America is once again a land of opportunity.

“Placing a cap on the SALT deduction to let middle-class families keep more of what they earned is a crucial component of achieving this economic victory for American workers and their families.

“That old, broken, regressive SALT tax break for the wealthy has no place in a fair, modern tax code – and the positive growth since its removal is a clear demonstration of that fact.

“One final thing: we often hear that limiting the SALT deduction is double-taxation and unconstitutional. The courts and tax policy experts have debunked those myths.

“And we hear a lot about ‘moocher states.’ But the only moochers in this debate are the state and local politicians who think it’s their money and are mooching off the backs of hard-working families and small businesses.

“I know my Democratic colleagues are sincere in this effort, but with this bill you’ve officially claimed the mantle ‘party of the rich.’

“I strongly urge all my colleagues to vote no on this legislation.

“And I again offer this: Republicans are committed to working with Democrats to make our tax code more competitive, to make our economy stronger, to never stop working to help the little guy and the middle class.

“Giving tax breaks to billionaires and encouraging states to tax their citizens more is not the way to do it.

“Thank you, Mr. Chairman.”