Washington, D.C.— Kentucky Congressman John Yarmuth, Chairman of the House Budget Committee, gave the following opening statement at today’s hearing, entitled “2017 Tax Law: Impact on the Budget and American Families,” on congressional Republicans’ deficit-funded tax cuts for the wealthy and large corporations. Remarks as prepared are below:
Once again, welcome to our witnesses.
We are here today to talk about the impact of the 2017 tax law on the federal budget and American families.
It is a conversation my Democratic colleagues and I tried to have with our Republican counterparts more than a year ago. But instead of collaborating on bipartisan, middle-class focused tax reform, and instead of heeding the warnings of economists, the Congressional Budget Office, and even our own constituents, Congressional Republicans chose to enact massive tax cuts for the wealthy and large corporations, which we will discuss today. They did this on their own, behind closed doors, in the dead of night, and without time for debate or any public scrutiny.
It was enacted in such a hurry that Senators were forced to read handwritten changes in the margins of the bill text, if they had time to read it at all.
This tax law was based on the flawed notion of trickle-down economics, which has been totally discredited. The idea that tax credits for the wealthiest Americans and corporations will trickle down and raise the standard of living and incomes for everyone else. We know that hasn’t happened.
Under the Republican tax law, nearly all of the tax cuts are going to the top one percent and corporations.
The richest 1 percent alone is receiving more than 80 percent of the total benefits.
Our long-term economic growth trajectory has not improved.
The federal deficit is soaring as corporate tax receipts plummet.
There is no sign of an investment boom.
Wage growth for workers remains weak and woefully inadequate.
Most small businesses owners have seen few if any benefits.
Because of changes in this law, factories and jobs are more likely to go overseas.
There are even more special-interest tax loopholes for the wealthy than before.
And that promise of being able to do your taxes on a postcard…well we’re still waiting for that one.
Since the President signed this bill into law, we have seen a record-setting $1 trillion in stock buybacks – buybacks that make rich investors richer and fuel rising CEO pay. They do nothing to improve business operations or help the average worker. They do not improve our economic outlook and, as our witnesses believe, will ultimately worsen income and wealth inequality.
And due to perverse international tax incentives in the law, it is possible for companies to actually reduce their taxes significantly more – or avoid paying tax altogether – by generating income overseas and moving investments abroad. This endangers more than 15 million American workers whose jobs are vulnerable to being offshored.
For American families this law is a huge and predictable failure. For the federal budget it’s a huge and predictable drain. And that is because the premise on which this tax legislation was built, that it would magically pay for itself, is fundamentally flawed. The GOP tax law has significantly weakened our budgetary health. It has caused a more than 30 percent drop in corporate receipts in 2018, with total receipts as a share of GDP falling to the lowest levels since the end of the Great Recession. This is despite healthy economic growth and a tight labor market.
As we engage in our oversight function, today we will not only discuss the impact the tax cuts have had on the budget, but how they will impact the economy and American families going forward.
Our budgetary challenges – and we have many – require smart, fiscally responsible policies, and the American people are demanding it. Today, we are going to find out just how deep the damage goes. We will look at the facts about the tax law’s impact on American families. And we will set the stage for taking necessary action to help move our nation’s fiscal policies in the right direction. I thank our witnesses for helping us with this discussion and look forward to your testimonies.
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