The following excerpts are from remarks by Congresswoman Suzan DelBene, a Democrat representing Washington State’s 1st Congressional District, who addressed her colleagues on the Ways and Means Committee last fall during the debate over the Republican tax bill. Also included is her exchange with Thomas Barthold, Chief of Staff for Congress’s Joint Committee on Taxation during the markup of the bill.
It seems like the authors of this legislation decided to target the most vulnerable among us when they were searching for ways to pay for their corporate giveaways. They target those without a loud voice in Washington, D.C.—adopted children; teachers; victims of long-term illnesses; young people trying to get a piece of the American dream, struggling under the crippling burden of student debt.
Republicans have made the most cynical trade-offs, only hurting the people who need the help the most. This is wrong. Tax reform should be about coming together and making choices that reflect our consciences and our values, values of the people we represent. And I can tell you, not a single working mother working two jobs to put food on the table, not a teacher, not a family caring for an aging parent has ever told me that what tax reform means to them is corporate cuts. They know those have never trickled down to them like Republicans have promised, like they promised in Kansas. My constituents know there is nothing left but fumes by the time the trickle reaches their doorstep. And those fumes don’t help them pay for medical expenses, college tuition, housing, or even the basic necessities that the people who wrote this plan clearly take for granted.
The Supreme Court Justice Oliver Wendell Holmes Jr. once said, “Taxes are what we pay for civilized society.” The purpose of the tax code is not to award political friends or to stick it to blue-state voters who pay higher state and local taxes. Rather, it’s to fund a functioning government and support an environment where every middle-class family can succeed; to fund a civilized society. This bill undercuts the very notion of a civilized society. It’s morally bankrupt and an outright attack on the middle class, built on a foundation of lies and mischaracterizations. It is fiscally irresponsible, raising the deficit by trillions and putting it on the backs of our children and our grandchildren, a short-term sugar rush at the cost of long-term economic stability. I will not accept this, and based on what I am hearing from my constituents, the American people will not accept it, either.
Rep. DelBene: A few questions. Will a teacher in my district who buys pens, pencils, paper for his students be able to deduct these costs from his tax returns under this plan?
Barthold: HR 1 will repeal the above-the-line deductions for teacher expenses.
Rep. DelBene: Will a corporation that buys pens, pencils, paper for its workers be able to deduct those costs from its tax returns under this plan?
Barthold: The general deduction for ordinary and necessary business expenses by any business entity is not changed, so it need not be a corporation.
Rep. DelBene: So they would.
Rep. DelBene: Will a firefighter in my district be able to deduct the state and local sales taxes that she pays from her tax returns under this plan?
Barthold: As noted previously, the itemized deduction for the election of either state or local income taxes would be repealed under HR 1.
Rep. DelBene: And will a corporation be able to deduct sales taxes on business purchases under this plan?
Barthold: Sales taxes incurred as part of the production of income will remain deductible.
Rep. DelBene: So they would. …Would a home owner in my district be able to deduct more than $10,000 in property taxes under this plan?
Barthold: Real estate taxes under HR 1 would be capped at $10,000, itemized deduction.
Rep. DelBene: Will a corporation be able to deduct more than $10,000 in property taxes under the plan?
Barthold: Again, under the same rule I was describing, as ordinary and necessary business expenses, the taxes attributable to earning income would be deductible, so the short answer is yes.
Rep. DelBene: And if a worker in my district had to move because his employer is forcing him to relocate his family or potentially lose his job, can he deduct his moving expenses under this plan?
Barthold: The above-the-line deduction is also repealed.
Rep. DelBene: He would not be able to.
Rep. DelBene: But if a corporation decides to close its facilities in my district, fire its workers, and move its operation to China, say, can it deduct associated moving expenses under this plan or, stated another way, can a corporation under this plan deduct outsourcing expenses incurred in relocating a U.S. business outside of the United States?
Barthold: Outside the United States, or within the United States, those would be deductible expenses.