Tax Legislation
Floor Speech
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Mr. BENNET. Madam President, Republican tax legislation in 2017 was completely misguided. Despite our best efforts, the bill passed in the middle of the night. It was completely partisan, not a single hearing. There wasn't a single Democratic amendment, and this is what that bill looked like.
As I repeatedly pointed out, the Republican taxpayers gave 572,000 taxpayers, with incomes over $1 million, more in tax cuts than the 90 million Americans who had incomes below $50,000 a year, making income inequality worse in this country.
In all, 43 percent of the benefits of the GOP bill went to the top 5 percent, households with incomes over $319,000 per year. It is why I came down to this floor repeatedly to oppose that tax bill.
Since 2001, the United States of America has borrowed $5 trillion from the Chinese for the privilege of giving tax cuts mostly to the wealthiest people in our country. We never paid for any of it. We said the tax cuts would pay for themselves. They never have paid for themselves.
Instead, we issued bonds, and we issued debt. The Chinese bought most of that debt to finance tax cuts for the wealthiest people in America. Over that period of time, we actually made income inequality worse during a time when income inequality is the highest it has been since 1928. We have had no economic mobility for 50 years for the bottom 90 percent of Americans--for 9 out of 10 Americans.
If I had to summarize my townhall meetings in Colorado, a place with one of the strongest economies in this country, it would be that people come to the townhalls and they say: Michael, we are working incredibly hard, and no matter what we do, we can't afford housing, we can't afford healthcare, we can't afford higher education, and we can't afford early childhood education. ``We can't afford a middle-class life'' is what they are saying to me, the vast majority of people.
I have said that in an editorial board recently, and somebody said: Do you mean the vast majority? And I said: Yes, the vast majority. That is what it looks like when you have an economy that is not driving growth from the bottom up, when only the people at the very top are the ones that are benefiting from it.
There are people who don't come to my townhalls because they are too busy working two and three jobs, like the people I used to work for when I was superintendent of the Denver Public Schools, a school district where most of the kids live in poverty and most of the kids are kids of color. I know what their parents would say if they weren't too busy to come to my townhalls. This is what they would say: We are killing ourselves. We are killing ourselves, and no matter what we do, we can't get our kids out of poverty.
That is straining our democracy. It is straining the whole idea that we are a land of opportunity, when there is no economic mobility for 90 percent of Americans and when people who are in poverty, no matter how hard they work, can't get out of poverty, can't get their kids early childhood education, and can't get their kids decent health care. And most places don't have access to early childhood education, even if they could afford it.
Notwithstanding this challenge over the decade, what we have done in Congress is to borrow money from the Chinese to give tax cuts to the wealthiest people in the country. That is not all we have done. We borrowed another $5.6 trillion to pay for 20 years' worth of wars in the Middle East. That is $11 trillion, $12 trillion, $13 trillion that from the vantage point of the people struggling in this economy, we might as well have lit on fire.
For that amount of money, we could have fixed every road and bridge in America. We could have increased teacher salaries by 50 percent. We could have paid for preschool for every kid in America who needs it-- and that is every kid in America. We could have made it easier for people to afford college instead of having to spend 25 years of their life paying back their college loans, like some of the pages who are here tonight are going to have to do when they graduate from college. We could have made Social Security solvent for my kids' generation. We could have paid down some of our deficits and our debt, which is now over $1 trillion, thanks to irresponsible policies of the President with the able assistance of the majority leader.
Tomorrow--I take no pleasure in saying this--we are being asked to vote on something that will make the Republican tax bill much worse, effectively repealing the cap on the State and local tax deduction, what is known as the SALT cap. It is a bad idea.
Before I get into that, I want to acknowledge my colleagues' very legitimate concerns who are going to be supporting this legislation. First, the Trump administration designed the SALT cap to take revenge against people who didn't vote for Donald Trump, to take revenge against some deep-blue States and districts. That policy shouldn't be designed with political retribution in mind. Every single passing day, this guy who is our President looks more and more like a tyrant or a dictator who believes that the only people he serves are the people who voted for him, and he doesn't have a responsibility for the rest of the country. That is not right, and I can see why people would want to correct that injustice. It is an injustice, and I am not here to defend that injustice. It is wrong.
Second, the Treasury rules to implement the SALT cap are overly broad in ways that harm existing programs with legitimate purposes. Nobody should be surprised at all that the Trump administration issued another sloppy policy that makes unnecessary opponents out of potential allies; that is, after all, their general approach to government.
But while I agree with the concerns of the proponents of the resolution, I believe we can address all of them in a much more effective and targeted manner than undermining the SALT cap. Some proponents have said that this isn't actually valid--the State and local tax deduction--and if we wanted to write a bipartisan bill that isn't about SALT, we could deal with the other tax policy issues affected by the Treasury rule. But this is about the State and local tax deduction.
So let me be very clear, the vast majority of the benefits of repealing the SALT cap would go to high-income Americans. Repeal would be extremely costly, and for that same cost, we could advance much more worthy efforts to help working and middle-class families all over the country.
Let's take a look at what lifting the SALT cap would do. On this chart, these are the incomes of Americans, starting over here with people earning less than $25,000 and over here with people earning more than $153,000, and everybody else in between. The benefit of this resolution goes to people at the very top--the top 0.1 percent, who are people who have $3.3 million of income on average; the top 1 percent, who have an average income of $755,000; and the next 4 percent, who make $319,000. Together, that comprises the top 5 percent in America. Under this resolution, the top 5 percent will get 83 percent of the total, and 83 percent of the benefit will go to people making more than $319,000; and 56 percent of the benefit will go to the top 1 percent. So 56 percent of the benefit goes to the top 1 percent, or people making $755,000 a year.
If we want to help the middle-class families who are harmed by the SALT cap, there are much less expensive and better targeted ways to do it. To put this in some perspective, SALT cap repeal is even worse for inequality than the Republican tax legislation--far worse. To summarize, 83 percent of the benefits of the SALT cap repeal go to the top 5 percent--83 percent--versus 43 percent in the GOP tax bill.
We can say we are for a progressive tax bill and for fighting inequality or we can support the SALT deduction, but it is really hard to do both of those things.
I feel strongly about it because of how irresponsible the other side has been. I know that is not the objective of people on my side, but the way we approach these issues really matters to the American people so they know whom we are fighting for.
Instead of repealing the SALT cap, which gives 83 percent of the benefits to the richest people and makes income inequality even worse in America, for almost exactly the same amount of money, we could cut childhood poverty by 40 percent. That sounds like a useful thing to do for America at a time when you have the worst income inequality that we have had since 1928. In 1 year, we could cut childhood poverty in America by 40 percent with a simple change to the Tax Code that Sherrod Brown and I have written, called the American Family Act. It will cost $1 trillion over 10 years, which is about what the SALT cap costs. That would be a much more valuable use of our resources than giving the money to the people who are making more than $319,000, especially after the Republican Party passed the irresponsible bill they passed and we passed $5 trillion of tax cuts since 2001, almost all of which went to the wealthiest people in America, making income inequality worse instead of investing in our country, vainly waiting for it to trickle down to everybody else.
As you can see on this chart, these are almost the same income levels that are seen on the previous page of who benefits from the American Family Act. Thirty-one percent of the benefits go to the people who are making less than $24,000--not 54 percent going to the top 1 percent, but 31 percent going to the bottom, the lowest income earners in America. Then, 24 percent goes to the folks who are a little less poor than that and, then, 19 percent and 19 percent. And if you are making above $119,000, you get 2 percent of the benefit of it.
That to me seems like a much more reasonable approach, at a moment in the country's history when income inequality has been on the rise, economic mobility has been stagnant, and when we have an education system--and I say this as a former school superintendent, with no joy at all--that is actually reinforcing the income inequality we have rather than liberating people from it, because the best predictor of the quality of education is your parents' income to the point of savagery. That is the best predictor because your parents' income is an excellent predictor of where you will live, and that is an excellent predictor of the education you will have.
The American people are desperate for relief in this economy. Republicans have made matters much worse by passing the Trump tax bill. I think Democrats should be on this floor fighting for progressive legislation that supports working people, that gives people a chance who are living in poverty to lift themselves out of poverty, and to give kids in this country a fighting chance no matter what the circumstances are of their birth.
The good news is that all of those things are available to us if we would come together in a bipartisan way and actually invest in our country again and create a Tax Code that actually drives economic growth for everybody, not just the people at the very top; rewards work again, ends childhood poverty, and delivers an education system that liberates people from their economic circumstances instead of shackling them to it; and pursuing a climate change policy that actually drives economic opportunity throughout the United States in rural and urban areas. We have an incredible opportunity in front of us as a democracy to change the way our economy works so that everybody benefits from it when it grows. That is how you build a strong democracy.
Donald Trump doesn't understand any of that, which is why he has pursued the policies he has pursued. It is important for us to fight those policies as well as offer ideas like the American Family Act, like increasing the earned income tax credit, like passing paid family leave, and raising the minimum wage. These are things we could do that will make an enormous difference to working people all over this country, and I believe that is the agenda we should be pursuing.
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