WASHINGTON - Ways and Means Committee Ranking Member Sander Levin (D-MI) today made the following statement on the floor of the House of Representatives regarding H.R. 9, the $46 billion tax cut giveaway to the wealthy:
This bill needs to be graded and the grade it gets is an F. A fat F grade. It fails all tests of sound tax policy.
Let me start with truth in advertising. This is not a small business bill. It's small business in name only. It's totally untargeted. It applies as long as an entity has under 500 employees - those benefiting include law firms, sports teams, financial consultants, lobbyists, corporate farmers. And regardless of what their annual receipts are; they can be tens of millions or hundreds of millions of dollars. Interestingly, when the SBA looks at its loan program it has what's called a common standard - the businesses it serves cannot have more than $7 million in annual income - average annual receipts for most nonmanufacturing firms. This bill has no limits, none, as to function or amount of receipts. So really this bill mocks the use of the title small business.
This isn't about mom and pop. It's about popping the cork for wealthy taxpayers.
For tax fairness, this bill is graded an F. According to the most cautious estimate, 56% of the tax break under this bill goes to taxpayers making $250,000 or more annually. It provides 125,000 taxpayers making $1 million a year with a tax break of over $58,000. Another model - from the Tax Policy Center - says that 49% of this $46 billion revenue loss goes to people with incomes over $1 million.
This is the Bush tax cuts on steroids.
In terms of job creation, another F grade. Listen to the Joint Tax Committee analysis. It says this bill's economic impact, I quote, “is so small as to be incalculable." So small as to be incalculable. The only thing calculating about this bill is its political nature. We've looked at the website of the Majority Leader. He uses Mr. Robbins - who was the one who advised Herman Cain on his 9-9-9 tax plan. This is what he says about this bill: He estimates that a one-year tax cut would create 39,000 jobs. This is on the Majority Leader's website. So according to the analysis that the Leader is touting on his own website, H.R. 9 would increase the federal deficit by $1.1 million for every job supposedly created. So, another big F. Now let's talk about where these jobs would be created. A company would get this benefit if it sheds jobs. Or if it uses the deduction to hire workers overseas.
The bill gets another fat F in terms of fiscal responsibility. This bill adds a whopping $46 billion to the deficit in one year. And if it's made permanent, a half trillion dollars over the next 10 years. Anybody who utters the word federal deficit after voting for this bill will sell short the intelligence of their constituents because they know when someone is selling them a pig in a poke.
In terms of tax reform, the bill gets another fat F. This bill is the antithesis of tax reform. And what it does is ridicule supporters who claim their fealty to tax reform. It doesn't simplify the tax structure, it complicates it. And that's why I quote The Wall Street Journal this morning. This is what they say about your bill: it's another tax gimmick. Again, The Wall Street Journal says the “U.S. economy does not need another tax gimmick."
This is tax policy gone haywire.
So I'm going to offer a substitute that's targeted, that will help create jobs, that's fair, that is fiscally responsible and continues a policy that both Republicans and Democrats have supported in the past.
H.R. 9 flies in the face of anything bipartisan. It flies in the face of anything that is truthful in advertising. It flies in the face of anything that is fair. It flies in the face of anything that creates jobs. It flies in the face of fiscal responsibility and it flies in the face of tax reform. So, I more than urge people to vote no and vote yes on our substitute. I really urge that they exercise their responsibility to try to get this country moving in the right direction, not with policies that deserve a total F on the test of sound tax policy.
