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Republicans Are Making No Effort for Serious Bipartisan Tax Reform – Here’s How Comprehensive Bipartisan Tax Reform Went in 1986

THE REAGAN ADMINISTRATION SUBMITTED MULTIPLE, DETAILED POLICY PROPOSALS ON COMPREHENSIVE TAX REFORM – UNLIKE THE TRUMP ADMINISTRATION

The Reagan Administration released multiple, detailed tax reform proposals. In November of 1984, the Reagan Treasury Department released its first detailed, comprehensive tax reform proposal, known as “Treasury I.” This proposal was more than 400 pages long and included detailed revenue estimates. In May of 1985, President Reagan released a revised tax plan, referred to as “Treasury II.” This plan was nearly 500 pages long and included detailed revenue estimates. The Trump administration has released no such proposal.

IN THE HOUSE, LAWMAKERS SPENT 10 MONTHS WORKING TOGETHER TOWARD BIPARTISAN TAX REFORM

30 Days of Public Hearings over Six Months. According to congressional records, the House Ways and Means Committee “held 30 days of public hearings on comprehensive tax reform proposals,” between February 27 and May 16, 1985. In addition, Ways and Means subcommittees held 14 days of hearings on tax-reform related measures. 

26 Days of Committee Markup over Four Months. According to congressional records, the House Ways and Means Committee “conducted 26 days of markup on the tax reform bill,” starting on September 18 and concluding with report of the tax reform bill on December 3. After rejecting a procedural motion on December 11, the House passed their version of tax reform on December 17, 1985.

IN THE SENATE, LAWMAKERS ON THE FINANCE COMMITTEE WORKED ON COMPREHENSIVE TAX REFORM FOR OVER A YEAR BEFORE A COMMITTEE VOTE

36 Days of Public Hearings over Ten Months.  According to congressional records, the Senate finance committee “held 36 days of public hearings on comprehensive tax reform proposals,” between May 9, 1985 and April 21, 1986. These hearings were overwhelmingly on the Reagan comprehensive tax reform proposal or the House-passed bill. In addition, Senate Finance subcommittees held 6 days of hearings on tax-reform related measures.

17 Days of Committee Markup over Three Months. According to congressional records, the Senate Finance Committee "conducted 17 days of markup on the tax reform bill,” starting on March 19 and concluding with report of the tax reform bill, as amended, on May 6, 1986. The bill was reported unanimously, 20-0. After weeks of floor debate, the Senate approved the bill on June 26, 1986, 97-3.

FINAL ACTION – OVERWHELMING BIPARTISAN SUPPORT FOR COMPREHENSIVE TAX REFORM

More than 500 days after the first 1985 House Ways and Means Committee hearing on tax reform, the Conference committee on the Tax Reform Act began on July 17, 1986. The conferees adopted the bill on August 16, 1986. The House approved the conference report, 292-136 and the Senate adopted the bill 74-23. President Reagan signed the bill into law on October 22, 1986, more than 600 days after the first hearing.

 

 


The Costs of Republican Tax Plan to American Families



Senator Debbie Stabenow and Senate Dems will hear testimony on similarities between the failed 2012 Kansas tax cuts and the current Republican plan. They will hear testimony to counter the misleading argument that economic growth will make up for lost revenue in the Republican tax plan as well as ways in which the Republican tax plan hurts seniors, working families, and homeowners. Witnesses: • Rep. Jim Ward, Kansas State House Minority Leader • Sarah LaFrenz Falk, Kansas State Employee and PTA Parent • Max Richtman, President and CEO, National Committee to Preserve Social Security and Medicare (NCPSSM) • Bruce Bartlett, Former Republican Treasury Official and Tax Expert • Luz Arevalo, attorney at a low-income tax preparation clinic • Gene Sperling, Former National Economic Council Director

Republicans Want to Eliminate the Middle Class State and Local Tax Deduction to Give the Wealthiest Few a Huge Tax Cut

NY Republican: “Politically And Economically, It Would Be Devastating”
CA Republican: Ending SALT Deduction Is “Double Taxation”
NJ Republican: Ending SALT Deduction Is “Patently Unfair”

MORE THAN 30PERCENT OF TAXPAYERS BENEFIT FROM THE SALT DEDUCTION, ACCORDING TO THEGOVERNMENT FINANCE OFFICERS ASSOCIATION

 
“Everyone inthe United States benefits from SALT, but the SALT deduction is useddirectly by around 30% of all taxpayers. Currently, taxpayers are giventhe option of deducting real estate taxes as well as either income taxes orsales taxes paid to state and local governments. While the SALT deduction isused across all income levels, the actual amount of property versus incomeversus sales tax deducted by lower, middle, and upper income taxpayers providesinsight into how those taxpayers benefit. For example, while over 70% of SALTdeductions for tax units with an AGI of more than $200,000 are from incometaxes, over 60% of deductions from taxpayers with less than $50,000 in incomecome from property tax. This highlights how important the property taxdeduction is for middle class homeownership.” [GFOA, Accessed 10/23/17]


ELIMINATING SALT WOULD DISPROPORTIONATELY HURT MIDDLE-CLASS AMERICANS, WITH MORE THAN 70 PERCENT TAXPAYERS THAT EARN BETWEEN $100,00 AND $200,000 PER YEAR CLAIMING THE DEDUCTION

 
[A]lmost 40% of taxpayers making between $50K to $75K per year and more than 70% of taxpayers earning from $100K to $200K per year and use the SALT deduction.”[GFOA, Accessed 10/23/17]

“[O]ver50% of the total amount of the SALT deduction goes to taxpayers making lessthan $200,000 a year. In fact, every single taxpayer with income abovethe standard deduction amount could potentially benefit from deducting SALT. Whenlooking at the total amount deducted by income bracket, it is clear that theSALT deduction benefits taxpayers across all brackets. In fact, thebracket with the most filers and the largest total amount deducted is fromthose earning between $100,000 and $200,000 per year in AGI. With astandard deduction of $6,350 per individual and $12,700 for married couplesfiling jointly, even if Congress were to offset impacts from eliminating theSALT deduction through increases in the standard deduction, the deduction wouldneed to increase significantly. Even if it were to double or triple, asignificant portion of taxpayers would still end up with tax increases.”[GFOA, Accessed 10/23/17]


WHY WOULD REPUBLICANS END THIS MIDDLE CLASS TAX DEDUCTION? TO GIVE A HUGE TAX CUT TO THE WEALTHIEST FEW

 
Tax PolicyCenter: “By 2027, the top1 percent would get 80 percent of the plan’s tax cuts while the share formiddle-income households would drop to about 5 percent. On average, taxes forthe top 1 percent would fall by more than $200,000 or 8.7 percent of theirafter-tax incomes. The top 0.1 percent would do even better. They’d get anaverage tax cut of more than $1 million, a 9.7 percent boost in their after-taxincomes.” [TaxVox, 9/29/17]

THAT’S WHYEVEN REPUBLICAN LAWMAKERS HAVE COME OUT AGAINST THE ELIMINATION AND CALLED THEPROPOSAL WHAT IT IS: “DEVASTATING” AND “EMINENTLY UNFAIR”


Rep. DanDonovan (R-NY), Rep. John Faso (R-NY), Rep. John Katko (R-NY), Rep. Peter King(R-NY), Rep. Elise Stefanik (R-NY), Rep. Claudia Tenney (R-NY), Rep. Lee Zeldin(R-NY): “Without the SALT deduction, taxpayers in all 50 states and in the District of Columbia would be doubly taxed - they would pay federal income taxes on the money they pay totheir state and local governments. Such a policy is eminently unfair, as the federal tax code has recognized for the past 103 years.” [Letter to Secretary Mnuchin, 6/23/17]

Rep. Rodney Frelinghuysen (R-NJ), Rep. Peter King (R-NY), Rep. Leonard Lance (R-NJ), Rep. Frank LoBiondo (R-NJ), Rep. Tom MacArthur (R-NJ), Rep. Chris Smith (R-NJ), and Rep. Claudia Tenney (R-NY): 
“We hope that you will reconsider this dramatic increase to the tax burden borne to families and homeowners in select high-cost states. As outlined above,our states are economic engines that deliver disproportionately more revenue to the federal government that they receive back, paying more for services delivered to the country at large. Faced with an already high tax burden and high cost of living, our communities cannot afford another increase to their taxes.” [Letter to Secretary Mnuchin, 6/19/17]

Rep. PeterKing (R-NY): 
“Politically and economically, it would be devastating,” … “Thededuction is essential for these people to get by.” [Fox Business, 10/23/17]

Rep. John Faso(R-NY):
Taxreform is important in order to grow the economy and to create opportunities for families across New York and the nation. I remain opposed to eliminating the deductions for state and local taxes, as this would represent, in effect, double taxation on New York families.” [Albany Business Review,10/23/17]

Rep. TomMacArthur (R-NJ): 
“It’snot some choice of people in the Northeast, and to tax them on dollars they nolonger have, because they’ve paid it to their state and to their localcommunity, is patently unfair.” [The Atlantic, 10/2/17]

Rep. LeonardLance (R-NJ):
“I believe it is critically important to continue the deductibility of state and local taxes.I believe that this is essential to continue this in the code,” said Rep.Leonard Lance (R-N.J.), who represents a swing district where Hillary Clinton narrowly defeated Donald Trump in 2016. “I am a ‘no’ ” on tax reform unless it preserves the deduction, Lance added. [The Hill, 10/4/17]

Rep. TomMcClintock (R-CA):[D]oubletaxation. You’re taxed on the same income by both the federal government and the state government and the local government. That won’t do at all and I think that’s going to be one of the pieces of the proposal that’s going to be modified over time.” [San Francisco Chronicle, 5/6/17]

Top Ten False Claims from President Trump on Tax Reform

 Top Ten False Claims from President Trump on Tax Reform


FALSE TRUMP CLAIM: “THIS IS NOT A PLAN FOR THE RICH.”
President Donald Trump:  “This is not a plan for the rich. This is a plan for the middle class and this is a plan for jobs and this is a plan to bring $4 trillion back into the United States.” [Press Gaggle, 9/14/17]  

Tax Policy Center:  “On average, taxes for the top 1 percent would fall by more than $200,000 or 8.7 percent of their after-tax incomes. The top 0.1 percent would do even better. They’d get an average tax cut of more than $1 million, a 9.7 percent boost in their after-tax incomes.” [Tax Policy Center, 9/29/17]

FALSE TRUMP CLAIM: TRUMP TAX PLAN WILL GIVE TYPICAL HOUSEHOLDS A $4,000 RAISE

President Donald Trump: “So each household, on average, would take in $4,000, and they'll go out and they'll spend that money and that'll be great for the economy.” [Remarks at a Meeting With Senate Finance Committee Members, 10/18/17]  

FactCheck.Org: Trump’s Dubious $4,000 Claim. “Don’t count on it. This claim is dubious at best.” [FactCheck.Org, 10/23/17]

FALSE TRUMP CLAIM: “AT THE HEART OF OUR PLAN IS A TAX CUT FOR EVERYDAY WORKING AMERICANS.”
President Donald Trump: “At the heart of our plan is a tax cut for everyday working Americans. The first $12,000 for a single individual, and the first $24,000 for a married couple, will be tax-free.” [Remarks to Heritage Foundation, 10/17/17]  

Tax Policy Center: “By 2027, the top 1 percent would get 80 percent of the plan’s tax cuts while the share for middle-income households would drop to about 5 percent.” [Tax Policy Center, 9/29/17]

FALSE TRUMP CLAIM: “I WILL PAY MORE THAN I PAY RIGHT NOW.”
President Donald Trump: “I will pay more than I pay right now.” [Fox News, 4/28/17]  

Politifact: Donald Trump's Dubious Claim That His Tax Plan Won't Benefit Him. “We rate his statement False.” [Politifact, 9/28/17]


FALSE TRUMP CLAIM: “THE ESTATE TAXES IS ONE OF THINGS AND THAT'S, IF YOU LOOK AT, FOR FARMERS AND PEOPLE WITH SMALL BUSINESSES.”
President Donald Trump: “To protect millions of small businesses and the American farmer, we are finally ending the crushing, the horrible, the unfair estate tax, or as it is often referred to, the death tax.” [Indianapolis Star, 9/27/17]  

Politifact:
Donald Trump's Pants on Fire Claim About The Estate Tax, Small Businesses And Farms. “We rate the statement Pants on Fire.” [Politifact, 9/28/17]


FALSE TRUMP CLAIM: “THIS WILL NOT INCREASE, THIS WILL LOWER THE DEFICIT”
President Donald Trump: "Yes. This will not increase, this will lower the deficit, because I think we're going to take off like we have never taken off before.” [Forbes,10/10/17]  

Washington Post Fact Checker: “And it’s a fantasy to claim that the tax cut will pay for itself — and even reduce the deficit — especially in an economy that already has low unemployment and a booming stock market.” [Washington Post, 9/29/17]


FALSE TRUMP CLAIM: “THE REPUBLICAN PARTY IS VERY, VERY UNIFIED.” ON TAX REFORM
President Donald Trump:  “Just so you understand, the Republican Party is very, very unified.” [Remarks by President Trump and Senate Majority Leader Mitch McConnell in Joint Press Conference,10/16/17]  

WSJ: High-Tax States Balk at Republican Deduction Proposal. “House Republicans from New York, New Jersey and other high-tax states have been resisting GOP leaders’ proposals to repeal the deduction and use the money to lower tax rates.” [WSJ, 10/23/17]


FALSE TRUMP CLAIM: DEMOCRATS WILL ONLY VOTE FOR TAX INCREASES
President Donald Trump: “The Democrats will only vote for Tax Increases.” [@RealDonaldTrump,10/18/17]  

Letter from Senate Democrats to Trump: “First, we believe that tax reform should not increase the tax burden on the middle class. … Second, we believe it is crucial that tax reform legislation go through regular order and not reconciliation. … Third, tax reform should be focused on providing a revenue base that meets the needs of our country. … We look forward to working together to write tax reform legislation that provides real relief for America’s working families. [Letter to President Trump, 8/1/17]


FALSE TRUMP CLAIM: LARGEST TAX CUTS IN HISTORY
President Donald Trump: “We're going to introduce a tax plan that's the largest tax cut, essentially, in the history of our country.” [Press Gaggle by President Trump, 9/27/17]  

AP Fact Check: Trump's Tax Plan Is Far From The Biggest Ever. “His tax plan is, at most, fifth largest in its estimated cost, says Marc Goldwein of the nonpartisan Committee for a Responsible Federal Budget. It could end up being even lower on the ladder historically.” [AP, 10/16/17]


FALSE TRUMP CLAIM: “WE'RE THE HIGHEST-TAXED COUNTRY IN THE WORLD”
President Donald Trump: “Right now we're paying the highest tax rate in the world.” [Press Gaggle, 9/14/2017]  

CNN Money:
Trump Says The U.S. Is The Highest Taxed Country In The World. It's Not. “No, it's not. In fact, Trump has made the very same blanket claim at least 18 times before, according to the Committee for a Responsible Federal Budget.” [CNN Money, 9/6/17]



The Trump Tax Plan is a Giveaway to the Wealthiest Few – Plain and Simple

ACCORDING TO THE TAX POLICY CENTER: “THE TOP 1 PERCENT WOULD GET 80 PERCENT OF THE PLAN’S TAX CUTS”

President Trump has promoted the tax package, called the ‘Unified Framework for Fixing our Broken Tax Code,’ as an historically large tax cut for the middle-class and a tax increase for the highest-income households. The reality, however, is quite the opposite. … The disparity would grow over time. By 2027, the top 1 percent would get 80 percent of the plan’s tax cuts while the share for middle-income households would drop to about 5 percent. On average, taxes for the top 1 percent would fall by more than $200,000 or 8.7 percent of their after-tax incomes. The top 0.1 percent would do even better. They’d get an average tax cut of more than $1 million, a 9.7 percent boost in their after-tax incomes.” [Tax Policy Center, 9/29/17]

THE AMERICAN PEOPLE KNOW THE TRUMP TAX PLAN IS A GIVEAWAY TO THE WEALTHY

CBS News: Nation Tracker: Americans feel tax reform plans would favor wealthy

“Most Americans believe the current tax reform proposals would favor the wealthy, and they already believe the U.S. economic system as a whole is favors the wealthy.” According to the poll, 58% of Americans say that the plan would favor the wealthy – only 18% say the plan would benefit the middle class. [CBS News, 10/15/17]

THE TRUMP TAX PLAN EVEN ELIMINATES THE ESTATE TAX – EVEN TRUMP’S TREASURY SECRETARY ADMITS THAT “DISPROPORTIONATELY HELPS RICH PEOPLE.”

1. Treasury Secretary Steven Mnuchin: 
STEPHANOPOLOUS:
But eliminating the estate tax will only go to the wealthiest Americans, those that have estates greater than $11 million. 
MNUCHIN: Well, you are correct in that sense. And, again, we've been talking about the income tax system. As it relates to estate tax, you know, the death tax, we believe that people get taxed once and not twice. And that will enable them to keep lots of family businesses passed along. But the estate tax, you are correct. The majority of the estate tax is paid by the wealthy. [ABC’s This Week, 10/1/17; VIDEO]

2. Treasury Secretary Steven Mnuchin: “It’s a philosophical issue, it’s an economic issue, and people who have family businesses should be able to pass them down, but obviously, the estate tax, I will concede, disproportionately helps rich people.” [Institute of International Finance, 10/14/17]

3. Treasury Secretary Steven Mnuchin:
HARWOOD: If you look at the actual incidence of the estate tax, it falls heavily to a pretty small number of wealthy families.

MNUCHIN: It does. [CNBC, 5/23/17]

 Warren Buffett calls repealing the estate tax a “terrible mistake” “that’s not good for capitalism.”

TRUMP ADMINISTRATION IS USING FAKE MATH TO HIDE THE FACT THAT CORPORATE TAX CUTS OVERWHELMINGLY BENEFIT WEALTHIEST FEW

Center on Budget and Policy Priorities: “The evidence indicates that most of the benefits from a corporate rate cut would go to those at the top, with only a small share flowing to low- and moderate-income families.  Mainstream estimates conclude that more than one-third of the benefit of corporate rate cuts flows to the top 1 percent of Americans, and 70 percent flows to the top fifth. Corporate rate cuts could even hurt most Americans since they must eventually be paid for with other tax increases or spending cuts.” [CBPP, 10/11/17]

Professor Kimberly Clausing, Reed College: “Research shows that corporate tax cuts are far more likely to end up in the hands of those at the top of the income distribution.” [Fact Check.Org, 9/7/17

WSJ: Treasury Removes Paper at Odds With Mnuchin’s Take on Corporate-Tax Cut’s Winners. “The Treasury Department has taken down a 2012 economic analysis that contradicts Secretary Steven Mnuchin’s argument that workers would benefit the most from a corporate income tax cut. The 2012 paper from the Office of Tax Analysis found that workers pay 18% of the corporate tax while owners of capital pay 82%. That is a breakdown in line with many economists’ views and close to estimates from the nonpartisan Joint Committee on Taxation and Congressional Budget Office.” [WSJ, 9/28/17]

James Nunns, Tax Policy Center: “The Tax Policy Center assigns 80 percent of the corporate income tax burden to capital and only 20 percent to labor (workers’ wages and fringe benefits).” [Fact Check.Org, 9/7/17]


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