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Dems' Obstruction On Tax Reform: Heavy On Hypocrisy, Light On Substance

- May 9, 2017

Even Though Democrats Agree With Much Of President Trump's Tax Reform Package, They're Sticking To Their Strategy Of Obstruction That Was Hatched In 2016


TOP TAKEAWAYS

  • On April 26, 2017, President Trump announced the principles of his tax reform package including lowering individual and business tax rates, bringing companies' overseas profits back to the U.S., and reducing tax loopholes and deductions.
  • Democrats have long advocated for fixing the broken tax code and have openly supported similar tax initiatives that President Trump included in his plan.
  • But, Democrats have been planning to block President Trump's tax overhaul plan since 2016, and they immediately attacked the proposal sticking to pre-scripted talking points.

ON APRIL 26, 2017, PRESIDENT TRUMP UNVEILED THE BROAD PRINCIPLES OF HIS TAX REFORM PACKAGE

President Trump's Tax Plan Calls For Lowering Business Tax Rates, Reduction And Simplification Of The Individual Income Tax Rates, Addressing Overseas Tax Shelters, And Elimination Of Nearly All Tax Deductions

On April 26, President Donald Trump Tax Reform Plan Was Unveiled. "On Wednesday, at a White House press briefing, National Economic Council Chair Gary Cohn and Treasury Secretary Steve Mnuchin unveiled the broad outlines of President Donald Trump's tax reform plan." (Dylan Matthews, "Donald Trump's Tax Plan, In Fewer Than 500 Words," Vox , 04/26/17)

President Trump's Plan Lowers The Business Tax Rate From 39.6 Percent To 15 Percent. "U.S. President Donald Trump is proposing to slash the corporate income tax rate and offer multinational businesses a steep tax break on overseas profits brought into the United States, officials said late on Tuesday. With financial markets eagerly anticipating a White House tax plan, Trump will also call for a sharp cut in the top rate on pass-through businesses, including many small business partnerships and sole proprietorships, to 15 percent from 39.6 percent, an administration official said." (Amanda Becker and Steve Holland, "Trump Tax Plan Will Sharply Slash Corporate Tax Rates," Reuters , 04/25/17)

President Trump Plans To Reduce The Number Of Tax Brackets From Seven To Three. "So far, President Trump wants to slash individual tax rates -- cutting the top rate from 39.6% to 35% -- and reduce the number of total rates from seven to three." (Jeanne Sahadi, "Trump Calls For Dramatic Tax Cuts For Individuals And Businesses," CNN , 04/26/17)

President Trump's Plan Advocates For Incentivizing American Companies To Bring Earnings Back From Overseas. "American companies looking to avoid paying domestic tax rates are holding about $2.6 trillion in overseas earnings, a number that has been rising steadily for years, according to new research from Capital Economics. Part of President Donald Trump's tax plan calls for a 'holiday' that would lower the U.S. rate to incentivize companies to repatriate - bring home - that money." (Nick Wells, "Companies Are Holding A $2.6 Trillion Pile Of Cash Overseas That's Still Growing," CNBC , 04/28/17)

IN THE PAST, DEMOCRATS HAVE AGREED ON THE NECESSITY OF REFORMING THE TAX CODE TO GROW OUR ECONOMY

Democrats Have Expressed Agreement That The Tax System Is "Broken" And Must Be Reformed To Be More Fair And Efficient, And Increase Our Economic Competitiveness Abroad

Senator Debbie Stabenow (D-MI) Stated She "Certainly" Thinks We Need To Do Tax Reform When Discussing Working With President Trump. "Senator Debbie Stabenow of Michigan, a member of Democratic leadership, said she's still waiting to see what he [President Trump] will propose. 'I certainly think we need to do tax reform and I certainly want the jobs that will come with an infrastructure bill. We need to rebuild America, that's for sure,' she said." (Steven T. Dennis and Sahil Kapur, "Trump Faces Skeptical Democrats As He Eyes Bipartisan Deals," Bloomberg , 03/29/17)

In 2016, Senator Chuck Schumer (D-NY) Said He Was "Game To" Find Agreement On International Tax Reform Because He Thinks "It's Really Important For American Competitiveness." "Sen. Charles Schumer (D-N.Y.) on Tuesday said he is interested in working with other lawmakers to see if an agreement on international tax reform can be reached as soon as this year. 'I'm game to do it because I think it's really important for American competitiveness,' he said at a Senate Finance Committee hearing on business tax reform." (Naomi Jagoda, "Schumer Open To International Tax Reform This Year," The Hill , 04/26/16)

Senator Bob Casey (D-PA) Wants A "Fairer, More Efficient Tax Code" Which Simplifies The Code Among Other Reforms. "As part of the blank-slate process established by the Finance Committee leadership, U.S. Senator Bob Casey (D-PA), a member of the Senate Finance Committee, has submitted his recommendation for a fairer, more efficient tax code. His priorities include promoting economic growth in Pennsylvania and beyond, financial security for children and families, and simplifying the code." (Press Release, "Casey Submits Recommendation For Fairer, More Efficient Tax Code," Sen. Bob Casey , 07/26/13)

Senator Elizabeth Warren (D-MA) Said "We Need Serious Tax Reform To Make The Tax Code Fairer And Simpler." "We need serious tax reform to make the tax code fairer and simpler. The most profitable corporations should have to pay their fair share. The tax code should not be designed to encourage companies and jobs to go overseas. And those who already have made it big have a responsibility to pay a little bit forward - so the next kid coming along has a chance to make it too." ("Issues, Tax Policy," Sen. Elizabeth Warren , Accessed 04/26/17)

Senator Joe Donnelly (D-IN) Wants A "Fair, Efficient" Tax Code That "Encourages Businesses To Invest, Innovate, And Create Jobs" And "Allows American Companies To Compete In The Global Economy." "Further, Joe thinks Hoosiers deserve a tax code that is fair, efficient, and encourages businesses to invest here at home. He believes that tax reform should reflect our most basic priorities-building a strong middle class; encouraging businesses to invest, innovate, and create jobs; and fostering an environment that allows American companies to compete in the global economy. Joe intends to work with members on both sides of the aisle to develop a tax code that is fair and encourages economic growth." ("Budget & Taxes," Sen. Joe Donnelly , Accessed 04/26/17)

Senator Bill Nelson (D-FL) Believes That The U.S. Has "A Very Complicated Tax Code That's Gotten Out Of Control." "But, you can't do that in the next few days. It will take some long deliberation, starting in the committee process of the Congress, to reform a very complicated tax code that's gotten out of control." (Sen. Bill Nelson, Op-Ed, "Raise Top Rate Now, Reform Tax Next Year," The Hill , 12/10/12)

Senator Claire McCaskill (D-MO) Said "The Current U.S. Tax System Is Broken And Needs Reform." "'The current U.S. tax system is broken and needs reform,' said McCaskill, a former courtroom prosecutor and Missouri State Auditor." (Press Release, "In Senate 'Truman Committee' Hearing, McCaskill Examines Impact Of U.S. Corporate Tax Code On Foreign Acquisitions," Sen. Claire McCaskill , 07/30/15)

Senator Joe Manchin (D-WV) Believes "Our Corporate Tax System Is Beyond Broken." "I have long advocated for meaningful tax reform that creates fairness in our system and lowers tax rates for everyone while closing the loopholes, exemptions and credits that make our system unfair now. Democrats and Republicans both agree: when corporations such as GE pay little or no taxes, our corporate tax system is beyond broken. I am hopeful that this proposal fixes these problems." (Press Release, "Manchin Says Corporate Tax Reform Proposal 'Moves Us In The Right Direction,'" Sen. Joe Manchin , 02/22/12)

Senator Tammy Baldwin (D-WI) Believes That We Need A Tax Code That Grows The Middle Class, Strengthens Economic Security, Increases American Competitiveness, And Achieve Other Reforms. "Tammy believes that in order for America to compete and win the future, we need a tax code that respects and rewards hard work and not just wealth; grows the middle class and strengthens economic security; increases American competitiveness; and reduces the nation's deficit and debt." (Press Release, "Tax Reform Priorities: Reward Hard Work, Grow the Middle Class And Create Shared Prosperity," Sen. Tammy Baldwin , 07/30/13)

SENATE DEMOCRATS HAVE PUBLICLY ADVOCATED FOR SOME OF THE SAME TAX REFORM PRINCIPLES INCLUDED IN PRESIDENT TRUMP'S PROPOSAL

A Number Of Democrats Support Lowering Business And Individual Tax Rates

Senator McCaskill Said, "I Think We All Want To Lower Corporate Tax Rates." "I mean, I think we all want to lower corporate tax rates, but we want to quit letting certain people get goodies so they don't have to pay any taxes. We just want to level the playing field. And if we leveled the playing field we could actually realize some additional revenue without taxes going up for the vast majority of people, just the few people that aren't paying any right now, um, and, and get to a more fair tax system that could more fully support our military." (Michael Bersin, "Sen. Claire McCaskill (D): On Robbing Social Programs To Pay For ISIS," Show Me Progress , 10/14)

Senator Manchin Was "Pleased" With President Obama's Proposal To Lower The U.S. Corporate Tax Rate Which "Moves Us In The Right Direction." "U.S. Senator Joe Manchin (D-W.Va.) issued the following statement about President Obamas proposal to overhaul the corporate tax system by dropping the tax rate from 35 percent to 28 percent, reducing incentives to move jobs overseas, and expanding deductions for American manufacturing. While I will take the next several days to fully evaluate the Presidents corporate tax overhaul proposal, I am pleased to see that he is laying out goals that could move us in the right direction toward important priorities, like bringing more American dollars and jobs back onto our soil and encouraging investment in the United States." (Press Release, "Manchin Says Corporate Tax Reform Proposal 'Moves Us In The Right Direction," Sen. Manchin , 02/22/12)

  • Sen. Manchin Said "I Have Long Advocated For Meaningful Tax Reform That Creates Fairness In Our System And Lowers Tax Rates For Everyone While Closing The Loopholes." "I have long advocated for meaningful tax reform that creates fairness in our system and lowers tax rates for everyone while closing the loopholes, exemptions and credits that make our system unfair now." (Press Release, "Manchin Says Corporate Tax Reform Proposal 'Moves Us In The Right Direction," Sen. Manchin , 02/22/12)

Senator Nelson Wants To Clean Up Our Tax Code By Broadening The Tax Base And Reducing Tax Rates Among Other Reforms. "We need to roll up our sleeves and get down to the hard work of cleaning up our tax code. In order get the second $2 trillion in deficit savings that we need, Congress needs a clear timeline to act and expedited procedures to ensure the bill doesn't get bottled up on the floor by special interests. Real tax reform would broaden the tax base, reduce tax rates, maintain fairness and contribute to the second round of deficit reduction." (Sen. Bill Nelson, Op-Ed, "Raise Top Rate Now, Reform Tax Next Year," The Hill , 12/10/12)

Several Democrats Have Acknowledged The U.S. Is Losing Taxable Profits To Overseas Tax Havens And Want To Encourage American Companies To "Repatriate" Those Profits and Jobs

Senator Schumer Has "Favored Tax Changes That Would Encourage Corporate Repatriation." "There is a surprising degree of bipartisan consensus that the American tax system needs to be fixed and that the stranded earnings should be brought home. Paul D. Ryan, Republican of Wisconsin and the House speaker, and Chuck Schumer of New York, who is in line to be the Senate's Democratic leader, have favored tax changes that would encourage corporate repatriation. Mr. Schumer and Senator Rob Portman, an Ohio Republican, agreed on the framework of such a plan, and President Obama did as well." (Jeff Sommer, "A Stranded $2 Trillion Overseas Stash Gets Closer To Coming Home," The New York Times , 11/04/16)

Senator McCaskill: "We See More And More Profits And Intellectual Property Shifted Out Of The United States To Low-Tax Jurisdictions Overseas." (Press Release, "In Senate 'Truman Committee' Hearing, McCaskill Examines Impact Of U.S. Corporate Tax Code On Foreign Acquisitions," Sen. Claire McCaskill , 07/30/15)

Senator Bernie Sanders (I-VT) Has Introduced Legislation To Stop Corporations From Sheltering Income In Tax Havens In Place Like The Cayman Islands. "Sen. Bernie Sanders on Thursday introduced a bill to stop profitable corporations from sheltering income in the Cayman Islands and other tax havens." (Press Release, "End Offshore Tax Havens," Sen. Sanders , 02/07/13)

Senator Elizabeth Warren Recognizes That There Are Trillions Of Untaxed Profits Sitting Offshore. "Warren said the amount of money the giant corporations have stashed outside the country in tax havens - and the tax bill they would owe - is staggering. They have $2.1 trillion in untaxed profits sitting offshore." (Dave Johnson, "Warren's Warning About The Coming Corporate Tax Giveaway," HuffPost , 11/19/15)

Senator Debbie Stabenow Introduced Legislation To Encourage U.S. Businesses To Bring Jobs Back From Overseas. "U.S. Senator Debbie Stabenow announced legislation to encourage businesses to bring jobs to America and discourage companies from shipping jobs overseas. Stabenow unveiled her legislation, the Bring Jobs Home Act of 2017, at GalaxE.Solutions in downtown Detroit." (Press Release, "Stabenow Introduces 'Bring Jobs Home Act' To Cut Taxes For Companies That Move Jobs Back To America," Sen. Stabenow , 01/30/17)

In 2013, Senator Sherrod Brown (D-OH) Said That The U.S. Must Close Down Tax Havens, Lower The Corporate Tax Rate, And Reduce The Inventive For American Companies To Shift Job And Profits Overseas. "'Corporate tax reform is necessary to ensure the American economy is the most desirable place in the world for U.S. based companies to invest,' Brown said. 'We can do that by closing down tax havens that cost our country revenue and cost American workers jobs. Lowering the corporate tax rate would put companies on a level playing field with foreign competitors and reduce the incentive for them to shift jobs and profits overseas.'" (Press Release, "Sen. Brown Announces Plan To Overhaul Corporate Tax Code To Spur Domestic Investment, Create High-Skilled Jobs," Sen. Brown , 07/31/13)

Senator Tammy Baldwin Cosponsored And Voted For Legislation To Encourage U.S. Businesses To Bring Jobs Back From Overseas. "U.S. Senator Tammy Baldwin voted today for the Bring Jobs Home Act, legislation she cosponsored that would close a corporate tax loophole and help bring American jobs back to Wisconsin." (Press Release, "U.S. Senator Tammy Baldwin Votes For Bring Jobs Home Act," Sen. Baldwin , 07/30/14)

Democrats Have Also Expressed Support For Closing Tax Loopholes

Senator Joe Donnelly Said, "It's Critical For Both Parties To Work Together To…Close Unnecessary Tax Loopholes" Among Other Actions. "'It is past time for Democrats and Republicans to set politics aside,' said Donnelly. 'It's critical for both parties to work together to find common sense ways to significantly reduce spending, close unnecessary tax loopholes, and better balance the budget. We can and should do this in a more thoughtful way.'" (Press Release, "Donnelly: Arbitrary Sequester Cuts Put Hoosier Priorities At Risk," Sen. Joe Donnelly , Accessed 05/02/17)

Senator Jon Tester (D-MT) Has Previously Supported Plans That "Close Wasteful Tax Loopholes." "Tester instead highlighted the bipartisan 'Gang of Six' plan, which secures Social Security and Medicare by preventing them from going broke. The 'Gang of Six' plan also makes significant spending cuts while closing wasteful tax loopholes." (Press Release, "Tester Hammers House Plan That 'Wipes Out' Medicare While Preserving Tax Loopholes," Sen. Tester , 07/22/11)

In 2011, Senator Sherrod Brown "Said That Tax Reform Should Close Loopholes." "After voting in support of the plan, Ohio's Sen. Sherrod Brown said in an interview that Congress needed to turn its focus to job creation exclusively. And he said that tax reform should close loopholes that the debt-ceiling deal didn't touch." (Tom Feran, "Sen. Sherrod Brown Says Wall Street Hedge Fund Managers Pay A Lower Tax Rate Than A Typical Sheet Metal Worker Or A Teacher," Politifact , 08/22/11)

MONTHS BEFORE PRESIDENT TRUMP'S TAX PLAN WAS EVEN RELEASED DEMOCRATS TIPPED THEIR HAND AND SAID THEY WOULD ATTEMPT TO BLOCK THE LEGISLATION

In 2016, Democrats Said They Would Portray Republicans' Tax Overhaul As "A Boon For The Rich" Which "Betrays" Trump's Campaign Promises - And Immediately Reiterated This Argument After The President's Plan Was Released

In December 2016, Congressional Democrats Stated They Would Try To Thwart Republicans Tax Overhaul "By Portraying Them As A Boon For The Rich" That Betrays "Trump's Campaign Promise To Fight For Working Americans." "Congressional Democrats say they'll try to thwart Republican plans to overhaul the U.S. tax code by portraying them as a boon for the rich that betrays President-elect Donald Trump's campaign promise to fight for working Americans." (Sahil Kapus, "Democrats Plotting 'Collision Course' With Trump's Tax Plan," Bloomberg , 12/26/16)

  • Rep. Pelosi's Staff Admitted They Would "Draw Lessons From Earlier Fights" When The Democrat Party Previously Blocked Legislation. "The party will draw lessons from earlier fights when it was able to block changes despite lacking control of the White House and Congress, said Drew Hammill, the deputy chief of staff for House Minority Leader Nancy Pelosi of California." (Sahil Kapus, "Democrats Plotting 'Collision Course' With Trump's Tax Plan," Bloomberg , 12/26/16)

"Democrats On Wednesday [April 26, 2017] Blasted President Donald Trump's Outline For Tax Reform." (Bob Bryan, "'Vodoo Economics On Steroids': Democrats Blast Trump's Tax Plan," Business Insider , 04/26/17)

Senator Schumer Said Trump's Plan "Will Be Roundly Rejected By Taxpayers " And That It Is "Totally At Odds" With Trump's Campaign Promises. "'This plan will be roundly rejected by taxpayers of all political stripes. The American people, once again, are learning that what President Trump promised in his campaign and what he's doing are totally at odds,' Schumer said." (Bob Bryan, "'Vodoo Economics On Steroids': Democrats Blast Trump's Tax Plan," Business Insider , 04/26/17)

Senator Bernie Sanders Said "Trump's Tax Plan Would Make A "Rigged Economy Designed To Benefit The Wealthiest Americans And Large Corporations…Even Worse." "We have a rigged economy designed to benefit the wealthiest Americans and large corporations. Trump's tax plan would make that system worse." (Sen. Sanders, Twitter Feed , 04/26/17)

Senator Casey Said The Plan "Is A Massive Tax Giveaway To Millionaires, Billionaires, And Big Corporations." "Senate Democrats quickly came out against the proposal. 'This scheme is a massive tax giveaway to millionaires, billionaires and big corporations at the expense of middle-class families,' said Sen. Bob Casey, D-Pa." ("Trump Admin. To Push Ahead With Tax Overhaul Without Democrat Support," The Associated Press , 04/27/17)

Rep. Nancy Pelosi Said The Tax Plan Includes "Giveaways To Big Corporations And Billionaires." "'President Trump's tax plan is short on details and long on giveaways to big corporations and billionaires,' said Nancy Pelosi, the top Democrat in the House of Representatives." (Amanda Becker and Ginger Gibson, "Trump's Plan To Slash Business Taxes Seen As 'Guidepost' By Congressional Republicans," Reuters , 04/27/17)


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