Ranking Member Neal Opening Statement at Hearing on Tax Reform
(Remarks as prepared)
Chairman Brady, thank you for holding this important hearing today highlighting the need for tax reform.
The tax code is broken – it is far too complicated and in need of repair. Our current tax system isn’t working for families and businesses alike. And we all agree that any revisions to the Tax Code should promote economic growth and create jobs for working families.
We should reject ideology and work together to reform our tax system for the twenty first century.
According to a recent Pew study, the share of adults living in middle-income households in the United States fell from 62 to 59% from 1991 to 2010. Aggregate household income has also shifted from middle to upper income households. Pew’s research found that 49% of U.S. aggregate income went to upper-income households in 2014, up from 29% in 1970. And for middle-income households – the share of income was 43% in 2014 down from 62% in 1970.
Wealth is now concentrated at the top – and there’s broad acknowledgement that the rich are getting richer while the middle class is shrinking. Income stagnation is a real challenge and one that needs to be addressed in tax reform.
This is in part why working families sent a strong signal to Congress last November. They haven’t received a pay raise in years, their bills are piling up and they’re concerned about an uncertain financial future. Put simply, too many feel forgotten by their government.
Tax reform should be about moving the dial to help middle-class families prosper. That means focusing on job creation. And helping families with day-to-day costs, like housing costs and grocery bills and child care. It also means helping working families to buy their first home, send their kids to college and help care for their elderly parents. And of course, it also means helping families save for retirement and that means protecting the tax incentives for retirement savings.
Our focus should be on making sure that when our American families sit down at the dinner table, they can look across at their spouse – at their children – and know that things are going to be alright. That’s unfortunately not the case in too many homes across the country today and we need to change that. That’s why Democrats are so committed to ensuring that the middle class is the true winner in any tax reform.
The American people don’t believe that massive tax cuts for millionaires and billionaires grow the economy. The American family knows that tax reform that provides middle-class tax relief and asks corporations and the wealthiest Americans to pay their fair share is what will grow our economy.
Democrats will oppose any tax plan that helps the rich get richer and does nothing for those who really need help. And all of us should oppose any tax reform that results in the middle class carrying even more of the tax burden. The Trump tax plan currently fails to meet this standard and I hope the Administration will move back to the test set out by Secretary Mnuchin for tax reform that, “there will be no absolute tax cut for the upper class.”
Furthermore, for tax reform to be successful, it must be done in a fiscally responsible manner. To that end, the words “dynamic scoring” and “supply side economics” are thrown around a lot these days. But make no mistake, tax cuts do not pay for themselves and anything to the contrary is a non-starter. However, as we consider tax policy and economy-wide effects, I would argue the importance of considering the macroeconomic effects of other policy changes, including an acknowledgement that robust investment in our nation’s infrastructure would have significant growth effects throughout our economy. I also think we should think about using the revenue from a deemed repatriation tax to pay for infrastructure or other productive purposes.
In conclusion, we have a unique opportunity to sit down and work together on tax reform. I stand ready to work in good faith on tax reform with Republicans in Congress and the Administration, but only if we’re truly doing so to benefit our nation’s middle class.
Thank you again, Mr. Chairman, for calling this hearing. Also many thanks to our witnesses for joining us today. I look forward to a productive conversation.
Watch here: https://youtu.be/vQomU68OHyU