Pathway to Job Creation Through a Simpler, Fairer Tax Code Act of 2012
Floor Speech
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Mr. VAN HOLLEN. Mr. Speaker, I thank Mr. Levin for all of his good work here.
Mr. Speaker, let's start with a point of agreement. We should simplify the Tax Code. We should reform the Tax Code. It's an overly complicated mess, and it needs to be streamlined and reformed. We could start with some really simple things like getting rid of the special tax breaks and giveaways to Big Oil companies, but our Republican colleagues on this House floor have voted time and again against that.
What we should not do is what we are hearing from a lot of our colleagues today, which is use the language of tax reform as a Trojan horse to provide another huge windfall to the wealthiest Americans at the expense of the rest of America, and yet that is exactly the direction that this bill takes us in.
The main principle enshrined in this bill is the old Republican principle of trickle-down economics, the failed idea that we need to give more tax cuts to the folks at the very, very top, and somehow those benefits are going to trickle-down to everybody else.
The problem, Mr. Speaker, is the American people have seen this movie before. That's no longer a theoretical idea. We ran a real-world experiment on that idea. It was called the 8 years of the Bush administration. We had tax cuts that disproportionately benefited the very wealthy in 2001 and 2003. At the end of those 8 years, what was the state of the economy? Net loss of private sector jobs, less than zero.
The one number that did go up, it wasn't jobs, it was the deficit. That number went through the roof, and the rest of the country is left to pick up the tab. And that's what the American people are beginning to focus on, Mr. Speaker: that these tax cuts for the wealthy are not a free lunch for the rest of the country but that they come at the expense of everyone and everything else. Because the math is pretty simple. If you refuse to ask the wealthiest Americans to pay one penny more for the purpose of deficit reduction, for everybody else it gets harder. Seniors on Medicare have to pay more even though their median income is under $23,000. It means deep cuts to investments in our economy and our kids' education, in science and research, and in infrastructure.
Now with today's bill, our Republican colleagues, as Mr. Levin said, are doubling down on an idea that we know does not work.
They're providing another round of tax cuts to millionaires and directly asking middle class taxpayers to pick up the tab.
Let's do the math. Let's do the math--that's what we try and do in the Budget Committee. When you drop the top tax rate from 35 percent to 25 percent, first of all, you provide huge breaks to the folks at the very top, but that loses $4 trillion over 10 years, in other words, the deficit grows by $4 trillion.
Now, our Republican colleagues say, Oh, no, we don't want to do that. We really care about the deficit. We're going to make up those $4 trillion through tax reform. Of course they won't tell us one thing about what they would do in tax reform.
But the good news is the Tax Policy Center, an independent group here in Washington, has told us what the Romney plan would do, a plan very similar to this plan. What they make clear is that when you start removing all those deductions and all the benefits, for example, for health plans or for mortgage interest deduction, what you end up doing is providing a big tax increase to middle-income taxpayers, financing tax breaks for the folks at the top by increasing the burden on----
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Mr. VAN HOLLEN. That's the simple math of the situation.
Now, I know that we've heard from the Romney campaign that that's a liberal think tank. Well, here's what the Romney campaign spokesman said about an earlier analysis from the same Tax Policy Center when they liked the results. Then they called it an ``objective third-party analysis''--Romney spokesman of an earlier Tax Policy Center analysis.
That, ladies and gentlemen, is a group here in Washington that does good, nonpartisan work, and that is the result that they found. And it makes common sense; you're trying to make up $4 or $5 trillion through tax reform, you're going to switch that burden.
Now, we've also heard that this is somehow going to help ``make it in America,'' that this is going to incentivize companies to do more business here in America. The reality is just the opposite in this bill. You move to a pure territorial system, your slogan might as well be ``Make It Overseas: Offshore American Jobs.''
Again, let's just look to the analysis done by another nonpartisan group. Mr. Levin has talked about the Joint Committee on Taxation analysis. They've already said that if you move to a pure territorial system, ``you will erode our domestic tax base and increase our deficits.''
Why will you erode our domestic tax base? Because more companies will ship their investments and operations overseas. That means more American jobs overseas.
In fact, another nonpartisan study found that this particular proposal, Republican proposal, which Mr. Romney also supports, would create 800,000 jobs. The problem is they found it would create 800,000 jobs overseas, not here in America, by setting up companies in places like the Cayman Islands and Switzerland.
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Mr. VAN HOLLEN. Mr. Speaker, let me just say: Let us come up with a tax reform plan that works for all of the American people. Let's come up with a plan that will help grow our economy from the middle out, not this failed idea of trickle-down economics from the top down. That is what this debate is all about. Because what we want to do through tax reform is empower the middle class and empower small business men and women.
You do not empower the middle class by creating a situation where, by giving tax breaks to the wealthy, you increase the deficit for the rest of the country. Because when you increase the deficit, you're asking everybody else to pay for those breaks at the very top. And people will pay by fewer investments in education, fewer investments in science and research, fewer investments that are important to empower our economy. And everybody else will be left to pick up this deficit tab while folks at the very top get another break. Let's not do that.
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