Washington, D.C.–U.S. Senator Mike Crapo (R-Idaho), Ranking Member of the Senate Finance Committee,
delivered remarks on the Senate Floor today on the Democrats’ $3.5 trillion reckless
tax-and-spending bill. In his speech,
Crapo says the efforts to reimagine America by imposing crippling tax hikes
will stunt our economic recovery, further impede labor markets, and punish low-
and middle-income workers with higher prices for everyday goods and services.
On business tax
hikes:
A higher corporate tax
rate would result in lower wages and reduced benefits; hit the nest eggs of
everyone saving for retirement; and force consumers to pay more for everyday
necessities.
Hiking the rate indisputably hits the middle
class. Estimates suggest workers
shoulder up to 70 percent of the corporate tax burden.
And a recent analysis performed by the nonpartisan Joint Committee
on Taxation says the burden on over 98 percent of Americans who make less than
$500,000 a year increases over time. Let
me make that clear: 98 percent of the increase that is felt by labor, falls on
those making less than $500,000 per year, and the vast majority of that on
those making less than $400,000 per year.
On plans to impose
hundreds of billions of tax hikes on businesses operating across the
globe:
These pro-China tax hikes would raise the
relative cost of doing business in America and punish American businesses selling products or services overseas,
reigniting inversions and foreign acquisitions.
On individual tax hikes:
Democrats also want to
increase the top individual tax rate to 39.6 percent from 37 percent, a rate
that kicks in at $400,000 for individuals and $450,000 for married
couples. This includes a supercharged
marriage penalty, as unmarried couples can earn almost a million dollars a year
without being subject to increased taxes.
Democrats have also
proposed increasing the number of Americans subject to the original death
tax–including farmers and small business owners. Others are pushing for a double death tax by
eliminating the step-up in tax basis entirely.
On IRS bank reporting
requirements and Americans’ privacy:
Less noticed are some
of the plans to drastically expand the powers of the Internal Revenue Service
(IRS) and turn banks and credit unions into private investigators for
monitoring law-abiding Americans.
The threats to privacy
and invasion of compliant taxpayers’ personal financial affairs are staggering.
On proposals to
stifle innovation in health care:
Democrats are also
proposing sweeping government price controls on the very innovators in our
health care system who helped battle the pandemic by developing life-saving
vaccines and therapeutics.
Their proposals could
prevent scores of game-changing prescription drugs from coming to market in the
years to come . . . in addition to driving up launch prices for new
products.
Senator Crapo’s
full remarks, as prepared for delivery:
The United States is experiencing unprecedented economic
pressures, including significant inflation and record price increases,
significant friction in labor markets, and intense international
competition–all while the pandemic continues to threaten Americans’ health and
our economic recovery.
Yet, Democrats want to move forward with their partisan $3.5
trillion reckless tax-and-spending spree that will likely stunt our economic
recovery, further impede labor markets, and punish low- and middle-income
workers with higher prices for everyday goods and services.
Democrats are currently debating just how high they want to
increase taxes on American businesses and workers.
House Democrats have proposed to hike the corporate tax rate
to 26.5 percent from 21 percent. This
would return our combined corporate tax rate – at 31 percent – to one of the
highest among developed countries.
Hiking the rate indisputably hits the middle class. Estimates suggest workers shoulder up to 70
percent of the burden.
And a recent analysis performed by the nonpartisan Joint
Committee on Taxation says the burden on over 98 percent of Americans who make
less than $500,000 a year increases over time.
Let me make that clear–98 percent of the increase that is
felt by labor, falls on those making less than $500,000 per year, and the vast
majority of that on those making less than $400,000 per year.
Our Democratic colleagues argue these increases do not
violate President Biden’s pledge, since they are not specific higher individual
tax rates.
But hardworking Americans do not care about the distinction
between a direct or indirect tax; they care about how taxes hit their
pocketbooks.
A higher corporate tax rate would result in lower wages and
reduced benefits; hit the nest eggs of everyone saving for retirement; and
force consumers to pay more for everyday necessities.
This plan would also impose hundreds of billions in tax
hikes on U.S. businesses operating across the globe, overwhelmingly rewarding
our foreign competitors and making the United States, again, one of the highest
taxing countries in the developed world.
These pro-China tax hikes would raise the relative cost of
doing business in America and punish businesses selling products or services
overseas, reigniting inversions and foreign acquisitions.
Democrats also want to increase the top individual tax rate
to 39.6 percent from 37 percent, a rate that kicks in at $400,000 for individuals
and $450,000 for married couples. This
includes a supercharged marriage penalty, as unmarried couples can earn almost
a million dollars a year without being subject to increased taxes.
Democrats have also proposed increasing the number of
Americans subject to the original death tax–including farmers and small
business owners. Others are pushing for
a double death tax by eliminating the step-up in tax basis entirely.
Rather than be given time to grieve their loss, families
could be forced to sell farms, businesses and homes just to pay Uncle Sam.
Less noticed are the plans to drastically expand the powers
of the Internal Revenue Service (IRS) and turn banks and credit unions into
private investigators for monitoring law-abiding Americans.
This financial dragnet will force financial institutions
into reporting deposit and withdrawal flows–on as little as $600–on their
customers’ accounts, exposing sensitive data to future breaches.
Whether the cutoff for monitoring transactions $600 or
$10,000, Americans of all income levels would have their private financial
activities reported to the leaky IRS.
The threats to privacy and invasion of compliant taxpayers’
personal financial affairs are staggering.
Democrats are also proposing sweeping government price
controls on the very innovators in our health care system who helped battle the
pandemic by developing life-saving vaccines and therapeutics.
Under the guise of negotiation, government bureaucrats would
have the power to set prices for medications, devaluing the lives of the most
vulnerable among us, including older Americans and those with
disabilities.
Their proposals could prevent scores of game-changing
prescription drugs from coming to market in the years to come – with one recent
study projecting as many as 342 fewer new medication approvals in the next two
decades – in addition to driving up launch prices for new products.
This even went too far for some House Democrats, with three
members voting against the legislation in committee.
As I’ve indicated, this reckless tax-and-spending plan comes
just over a year after we were experiencing one of the most prosperous
economies in decades.
Before the pandemic, a combination of reduced regulatory
burden and pro-growth policies helped to create one of the strongest economies
in our lifetimes.
We should be focused on policies that will get us past this
pandemic and back to the strong and inclusive economic growth we were
experiencing, rather than taking advantage of a prolonged pandemic to reimagine
America as a welfare state.
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