Providing for Congressional Disapproval Under Chapter 8 of Title United States Code, of the Rule Submitted By the Internal Revenue Service, Department of the Treasury, Relating to ``Contributions in Exchange for State or Local Tax Credits''

Floor Speech

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Mr. CORNYN. Mr. President, briefly on another matter, we are just a couple of months away from the 2-year anniversary of the passage of the Tax Cuts and Jobs Act. Because of this legislation, families across the country are benefiting from lower income tax rates and are able to keep more of what they earn. We have also helped families by doubling the standard deduction for children, expanding the child tax credit, and simplifying the Tax Code, which is something I think we can all agree needs to be done. For the millions of Texans who were filled with dread simply about filing their taxes, it was a welcomed relief.

The journey to pass the legislation wasn't easy, of course, and there was no shortage--there never are--of naysayers. Many of our Senate Democratic colleagues claimed this legislation only benefited the rich, the evidence to the contrary notwithstanding. We know that is false because of what the facts tell us.

Let me go back for a second and explain why this congressional resolution of disapproval we will be voting on at about 3 o'clock is so ironic and so mistaken.

Prior to tax reform, without limit, taxpayers could itemize their deductions for State and local taxes. They got to deduct that from their Federal income taxes, which meant, in essence, in those high-tax jurisdictions--the cities and the States that had high local and State taxes--taxpayers from around the country were subsidizing those taxpayers in those high-tax jurisdictions.

The Tax Cuts and Jobs Act attempted to deal with this unfairness by capping this deduction, better known now as the SALT deduction--the State and local tax deduction--at $10,000 for everybody across the country. Everybody was treated the same. Everybody was put on a level playing field. In other words, tax reform stopped the endless subsidy that taxpayers who were living in my State gave to fiscal decisions that were made by other States and local governments. There is no reason we should ask a taxpayer who is living in Austin to subsidize the financial decisions, the fiscal decisions, made in Albany, in Sacramento, or in any other State capitol.

Before the cap, the wealthiest Americans were disproportionately reaping the benefit of this no-limit deduction. That is why the cap was included in tax reform--in order to support the middle class, not the top 1 percent. In the process, we prevented the richest people in the country from gaming the Tax Code.

This chart, which was produced by the Senate Committee on Finance, courtesy of Chairman Grassley, talks about who benefits from the SALT cap repeal. This is what we will be voting on indirectly this afternoon.

Here, 52 percent of the benefit goes to taxpayers with incomes of over $1 million. Our Democratic friends like to say they are the party of the working man and woman, but clearly they are working on behalf of the 52 percent of taxpayers who have incomes of over $1 million in their seeking to repeal this regulation that basically prevents a tax dodge. There are 24 percent of taxpayers with incomes between $200,000 and $1 million who will be affected and 6 percent of taxpayers who will be affected who earn under $200,000. You can see that the majority of the benefit that our Democratic colleagues seek to confer is on the wealthiest people in the country.

I don't have any ax to grind with people who have been successful and who have made a lot of money. They pay their taxes, contribute their philanthropy, and help in innumerable ways. This is simply a way to try to make sure our taxpayers in Oklahoma, Texas, and Wyoming don't subsidize the high tax rates in New York, Los Angeles, or other places that have high State and local taxes. In good conscience, we cannot let that happen.

The fact is, since tax reform passed, a number of States have crafted a workaround--I call it a tax dodge--to circumvent this $10,000 limit. In June, the Treasury issued a regulation to stop them--this is the tax dodge--and required States to adhere to the limit that Congress passed into law and that the President signed.

The financial consequences of what the Democratic Members of the Senate are trying to do here are enormous. The Joint Committee on Taxation estimates that doing away with the subsidy cap would cost about $700 billion over the next 7 years, or $100 billion a year, and almost 95 percent of the benefit would go to the people who make more than $200,000. Even according to the liberal Tax Policy Center, one- third of the uncapped SALT deduction went to the top 1 percent.

If I have heard Bernie Sanders or Elizabeth Warren or any of the Democrats who are running for President rail on and on about the top 1 percent and income inequality once, I have heard it a thousand times. Yet here they seek to undo a cap that treats every taxpayer the same and essentially require taxpayers who are in low-tax States to subsidize those who are in high-tax States and localities. And 52 percent of them make over $1 million a year. A millionaire would receive a tax cut of nearly $60,000--higher than the household incomes of many people who live in my State.

That is what we will be voting on. That is what the Democratic leader from New York--a high-tax State and city--seeks to do for his constituents, but it is to the detriment of hard-working families in my State and in many States around the country.

After continually hammering the Tax Cuts and Jobs Act, it is actually duplicitous to argue that it somehow benefits the wealthy when there was just the most modest of cuts in the highest marginal rate. The benefit flowed to everybody in every tax bracket, but most of it went to the middle class. Yet, after hammering this side of the aisle for its somehow benefiting the wealthy to the detriment of the middle class, the Democrats are now working to help their richest constituents get back to the days of unlimited deductions.

This is unfair. It is regressive. It benefits the people who need the help the least, and it hurts the people who need our attention and help the most. Asking Texans and all Americans to somehow foot the bill for $700 billion so that the folks who live in these high-tax cities and States can get a $60,000 tax cut is something I am simply unwilling to participate in. I urge all of my colleagues to vote against this resolution of disapproval.

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