Tax Reform
Floor Speech
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Mr. McCONNELL. Mr. President, today Senate Democrats will push forward their own resolution that seeks to undermine part of the historic tax reform we passed in 2017.
Remember, back then, Washington Democrats were downright hysterical about our plan to let working Americans send less of their paycheck to the IRS. Speaker Pelosi called the tax cuts ``Armageddon.'' She said it was ``the worst bill in the history of the United States Congress.'' That is the Speaker on the 2017 tax reform bill. I guess that shows how much Democrats hate to cut taxes. But tax reform passed, and the results are clear. It has increased Americans' take-home pay and helped generate one of the best economic moments for working families in a generation.
Since tax reform, 22 States, including my State of Kentucky, have set new record-low unemployment rates. The national unemployment rate has set a 50-year low. But, alas, rather than acknowledge that the sky hasn't fallen, our Democratic friends still want to undermine tax reform--and listen to where they have elected to start. Listen to this. Democrats' first target is changing the Tax Code so that working families across the country have to subsidize wealthy people in States like New York, New Jersey, and California.
Here is the background. As part of tax reform, in order to maximize middle-class relief, the deductibility of State and local tax payments was capped. Most middle-class taxpayers were more than compensated for this through other tax cuts, but for some wealthy people who elect to live in high-tax States, this represented a partial increase.
Republicans didn't think it was fair that middle-class working families in States the Obama economy left behind had to subsidize the tax bills of rich people in high-tax States without limit. We didn't eliminate the State and local tax deduction; we just capped it for high earners. That cap is what Democrats want to undermine. Their resolution would help high-tax States--typically governed by Democrats--create workarounds for their high-earners.
Let's be clear about what would happen if Democrats got their real objective and repealed the SALT cap altogether. According to data from the Joint Committee on Taxation, 94 percent of the benefit would flow to taxpayers who earn more than $200,000 a year. That is what they are advocating. Ninety-four percent of the benefit would flow to taxpayers who earn more than $200,000 a year. More than half of it would actually go to people who make more than $1 million a year--cutting taxes for the rich. Repealing the SALT cap would give millionaires an average tax cut of $60,000. Meanwhile, the average tax cut for taxpayers earning between $50,000 and $100,000 would be less than $10. There would be $60,000 tax cuts for wealthy people and $10 tax cuts for the middle class. Apparently that sounds like a good trade to our Democratic colleagues. It doesn't sound like good trade to me.
I am sorry to break it to my Democratic colleagues, but the middle- class Kentuckians I represent have zero interest--zero interest--in cross-subsidizing the tax bills of millionaires who live in Brooklyn and the Bay Area.
It is bad enough that my Democratic colleagues want to unwind tax reform, but it is downright comical that their top priority--a top priority--is helping wealthy people in blue States find loopholes to pay even less. They won't even propose to repeal the SALT cap outright because they know it is bad policy and negates all of their talking points about tax fairness. They just want to bless a backdoor workaround.
I urge Members on both sides to use common sense and reject Democrats' resolution when we vote on it later today.
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