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Rep. Chu Statement on Ways & Means Vote to Advance Republican Tax Plan

November 9, 2017
Press Release

Washington, DC – This week, starting on Monday, the House Ways and Means Committee held a markup of the Republican tax plan. On Thursday, the plan was approved by a party-line vote. The bill is expected to be brought to the floor of the House next week. Rep. Judy Chu (CA-27), a member of the Ways and Means Committee, raised concerns about how ending the deductions for medical expenses, college tuition, and state and local taxes would hurt middle class families in California and across the country. Rep. Chu also introduced amendments to expand the earned income tax credit for childless workers, and to stop the repeal of the estate tax. In contrast to the bipartisan tax reform process in 1986, none of the Democratic amendments that were offered were approved by Republicans. Rep. Chu released the following comments during the markup and in reaction to the final bill:

On the Final Bill Passed by Committee:

“We came together with the purpose of helping the middle class, but everything the Republicans put into this bill favored the richest few, often relying on the middle class to foot the bill by taking away necessary and popular tax deductions. Every Democratic amendment to improve this bill was rejected, because the Republicans were more interested in passing corporate tax cuts than in crafting a bill that could earn bipartisan support. Yes, under this bill, families will receive a credit of $300, but even that small credit will expire after five years. Tax cuts for corporations, on the other hand, are permanent. Other deductions, like SALT, are cut for families but kept in place for corporations. So corporations get to benefit while families pay more. This tax bill is corporations first. And when we talk about the costs, it’s not just the cost in dollars. It’s the cost in lives that are getting harder, opportunities denied, and families hurt.”

On Trickle Down Economics:

“This Republican plan has essentially no direct benefit to the middle class. Any gains for the middle class in this bill are based on magic estimates, like trickle down economics, which we know doesn’t work. Wall Street’s stock prices have already been steadily rising since 2009, corporate profits have increased, and interest rates are at near 0%, which means affordable access to money. But wages have stayed stagnant. It’s ridiculous to claim that either trickle down works or that businesses are the ones who need benefits when they are reaching record profits while families still struggle with expenses. If you want to benefit the middle class, you do so by giving money to the middle class. Don’t give money to the wealthiest few and hope it gets to the middle class. Especially when that has been tried multiple times and has never panned out.”

On Keeping the State and Local Tax (SALT) Deduction:

“The attack on SALT is one of the most blatant attacks on the middle class in this bill. It’s actually by ending the deductions used by families and individuals that Republicans are able to pay for the tax cuts for corporations. For instance, individuals, especially in states like mine, have been able to deduct their state and local taxes for over 100 years. It’s a part of their calculus in moving to a new neighborhood, buying a home, or voting on state and local budgets. But Republicans are ending that for individuals, forcing them to pay higher taxes or accept a lower standard of living. It’s not that Republicans question the value of that deduction though, since they keep it for corporations. So it’s just families who get less.”

On Keeping the Medical Expense Deduction:

“Using the medical expense deduction as a pay-for is a perfect example of how this plan takes from the most vulnerable to give to corporations. And it’s another hidden way regular families’ taxes will go up. The deduction for medical expenses is a deduction that is simply used to make illness or injury less likely to bankrupt you. It can only be used by those who have medical expenses costing more than 10% of their income. It’s used to help families pay for things like fertility treatments, transportation expenses to cancer centers, dental procedures, and nursing home care. And in my state of California, over 1 million taxpayers have claimed it, nearly half of whom reported an income of $50,000 per year or less. For these families, the savings from that deduction can make the difference that allows families to give loved ones the best care they can.”

On Expanding the Earned Income Tax Credit:

“The Earned Income Tax Credit (EITC) is one of the strongest anti-poverty efforts in our country. It rewards work and provides support to the most vulnerable among us. Yet, the EITC benefits for childless workers is currently so small that none of these incentives make an impact. If EITC were expanded, however, we could help 716,000 veterans and military members and 971,000 workers with disabilities this year alone. This is the kind of help that will truly make a difference, which is why even President Ronald Reagan expanded the credit in the 1980s, and Speaker of the House Paul Ryan has supported this idea in years past. I’m disappointed this amendment, which would have gained bipartisan support in the past, was rejected by Republicans.”

On Keeping the Estate Tax:

“When we talk about helping our children, we don’t mean Ivanka, Eric, and Don Jr. But those are the ones who get helped by ending the estate tax. Republicans claim this is really about small farms and businesses, but that is not what the data show. First of all, the estate tax only applies to estates that exceed $5.5 million per person ($11 million per couple). That’s more than middle-income Americans typically earn over their entire lifetime. And across the country, just 5,400 estates will owe any estate tax in 2018, according to Joint Committee on Taxation. In fact, just about 80 small businesses are farms are expected to pay the tax. So repealing the estate tax only helps a handful of millionaires. It’s a distraction from our focus on helping families. In fact, our President even agrees this is a boon for the wealthy. On Wednesday, NBC news reported that Trump told the Senate Democrats on the phone that he wanted a repeal of the estate tax in the bill because they ‘had to give something to rich people.’ Instead of helping the richest few, the costs of repealing the estate tax could pay for childcare for 4.2 million children.”