Schumer Floor Remarks on the GOP Tax Plan

Washington, D.C. – U.S. Senator Chuck Schumer today delivered remarks on the Senate floor regarding the GOP tax plan. Below are his remarks:

Later this morning, after months of hemming and hawing and delay, House Republicans will finally release some legislative details about their tax plan. It may not even include all the details. The on-again, off-again nature of these deliberations should concern every member of both chambers. It’s not how you construct sound policy, especially with something as complicated and impactful as the tax code. Each decision has enormous ramifications. Last-minute changes and sloppy drafting could change the fate of entire industries. Rushing it through in this hasty manner could have disastrous consequences.

We know why my colleagues are doing this. They don’t want the public to know what’s in this bill. Increases on the middle class, breaks for the wealthy, big corporations getting a huge tax break with no guarantee and very little likelihood that they will use the money to create jobs. That’s why they don’t want it to be public. It’s not popular.

And even on polls where it says ‘do you support tax reform?,’ they say ‘yes.’ ‘Do you support cutting the taxes on big corporations?’ Overwhelming ‘no.’ ‘Do you support increasing taxes on the middle class?’ Overwhelming ‘no.’ ‘Do you support decreasing taxes on the wealthy?’ Overwhelming ‘no.’ Those are the 3 tenets of this bill.

So I hope my Republican colleagues here in the Senate are watching what’s going on in the House – the problems they’re having and the secrecy they need – and realizing how difficult and dangerous it is to try to rewrite the tax code by the seat of your pants.

Looking at the tax code and the real tax receipts after all the loopholes, the wealthy in our country pay far less in federal taxes than they did historically while the middle class pays more. Corporate profits are at record high, while average wages have been mainly stagnant. Those statistics articulate a real problem with the basic fairness of our tax code that tax reform could, underline could, fix. This plan doesn’t.

Instead, what we are seeing today is a plan that exacerbates the unfairness and inequality in our tax code.

If the details of the Republican tax plan are anything like what we’ve seen in the press: they’ll repeal the estate tax, create a huge new loophole for wealthy individuals in the form of a reduction in the pass-through rate, and lower the rates big corporations and the very wealthy. This sure doesn’t fit the bill of helping the middle class.

Meanwhile, to pay for all the tax giveaways in their bill, the Republicans are likely to make it worse for the middle class, not help them but hurt them. Slashing state and local deductibility, a bedrock middle-class and upper-middle-class tax deduction, would hurt so many middle-class taxpayers. Nearly a third of all taxpayers claim it, from all over the country, the vast majority of whom make below $200,000 a year.

Today, Republicans will crow about reaching a “compromise” on state and local whereby they don’t eliminate the deduction; they just reduce its value by about 70%. That means the bulk of the deduction will go away for so many middle-class Americans. I’d remind my House Republican colleagues - particularly those from states like New York, New Jersey, California, Pennsylvania, Illinois, Virginia, and Colorado - that this compromise will not solve your problem. You will still pay the price with voters.

I’ve been in politics a long time. I know how this will affect people, this compromise. They won’t look and say ‘oh it could have been worse, maybe we could have lost the entire deduction.’ They will say ‘this year I have the whole deduction and next year I will have less than half of it.’ And they will take it out on our Republican colleagues who vote for it, particularly from states, and they are throughout the country, of well-to-do and upper middle-class and middle-class suburban districts.

So anyone who thinks this compromise is going to help them doesn’t understand how politics works. It’s not what it could’ve been. It’s what it is and what it will be. What it is now: complete deduction. What it will be: you lose 70% of that deduction. No one is going to breathe a sigh of relief and say ‘I could have lost 100%.’

Taxpayers will see that Republicans have capped the amount of mortgage interest they can deduct when purchasing a new home, that’s the latest. Again, right at the middle-class. The mortgage deduction doesn’t really affect the wealthiest. They have all their money in unearned income, capital gains and all of that is what affects them the most. But the mortgage deduction is one of the hearts of the middle-class. To play with it, to reduce it, to cap it, so they can do tax giveaways for the very rich, not going to fly in America. Not in the America most of us know.

Taxpayers in big cities and small ones, in exurbs and suburbs who commute to work, will notice if they no longer receive the critical transit benefits they used to receive, thousands of dollars a month a year to help pay when you transit to work. Gone. Why? To help the wealthy.

And while some working Americans and middle-class taxpayers watch their taxes go up, they’ll read about how the Republicans repealed the estate tax, which benefits only 5,500 families who own estates worth over $5 million. They’ll learn about how instead of keeping the estate tax or closing the egregious carried-interest loophole, the Republicans reached into their pockets – the middle-class pockets - to pay for a big, corporate tax break that has no guarantee and very little likelihood of producing jobs. They’ll learn that while the reduction to the corporate tax rate is permanent, the increase in the child tax credit is only temporary. Big wealthy corporations count far more than kids in this bill. Corporations get permanent benefits, families with kids get temporary and meager ones.

The tax code is a reflection of fairness in our society. Do we want to be a country in which everyone pays their fair share, including big corporations and the very wealthy? I think so. Most Americans would agree with that. Yet right now, our tax code is slanted in favor of the rich and powerful, and the Republican plan only makes it worse.

The Republican tax plan would put two thumbs down on a scale already tipped towards the wealthy and powerful. It wouldn’t help create jobs or raise wages. That’s why the Tax Policy Center estimated that 80% of the benefits of the Republican tax plan would go to the top 1%, this new bill doesn’t change that a bit, while nearly a third of middle-class Americans would see a tax increase. 80% of the benefits to the top 1% of our country, 20% of the benefits for the other 99%.

That’s not a “middle-class bill” as President Trump said it would be.

Surely we can do better.

And if our colleagues, be it in the House or Senate, if our Republican colleagues who are trying to go at it alone can’t pass this bill, we would welcome an opportunity to sit down together and come up with a bill that really helps the middle class.