Given that House Democrats are in economic disarray and unable to defend the merits of their $3 trillion tax hike and spending spree, top Republican on the Ways and Means Committee Rep. Kevin Brady (R-TX) fact-checked Democrats’ false claims on the Tax Cuts and Jobs Act and the tax hikes Democrats are proposing in today’s full Ways and Means Committee meeting.
Those false claims include the debunked claim that the benefits of TCJA went to the wealthiest earners, that President Biden won’t raise taxes on the middle class, and that these tax hikes won’t impact American small businesses.
Rep. Brady said:
“So you will hear claims today that need to be fact-checked in advance. One, you will hear that this has no impact on America’s small business. But that’s not true. Raising the individual rate raises the rate on small businesses, most of whom file as individually.
“Cutting the pass-through small business tax deduction that impacts 30 million small businesses hurts those pass-through businesses as well. Increasing and expanding the investment tax across America to all small businesses means they have less money to invest in their company, in their workers, and in their growth.”
CLICK HERE to watch the full Committee meeting.
CLICK HERE to watch Rep. Brady’s remarks.
Here are some misleading statements you will hear Democrats make today and tomorrow – and the facts that debunk their false claims.
Dems’ False Claim: “Tax hikes won’t impact America’s small business.”
FACT: Millions of Main Street Businesses Will Shoulder Burden of Dems’ Tax Hikes.
- The majority of the more than 30 million small businesses in the U.S. are pass-through entities in which tax obligations are passed to the owners. Pass-through businesses also account for over half of all private sector workers. More than half of all pass-through income would be taxed at this new, higher rate.
- Democrats are expanding the death tax to hit more small businesses–and to take more from them. This trojan horse for a supercharged second death tax will force family-owned businesses to sell off assets in order to pay a massive tax bill to the IRS. These tax changes will cost 1 million jobs over the long term.
- The Biden Administration has claimed that the majority of small businesses will be exempt from his tax hikes – but the Tax Foundation has said that’s “misleading.” In fact, almost 900,000 small businesses could be hit with Democrats’ limitation of the passthrough deduction based on 2018 IRS data.
- Senate Democrats want to eliminate the small business deduction, which 21 million small businesses relied on in 2019 to invest, hire new workers, and increase employee benefits.
Dems’ False Claim: “President Biden doesn’t break his pledge on taxing Americans making less than $400,000.”
FACT: Democrats’ Tax Hikes Disproportionately Harms U.S. Workers and Retirees.
- The Joint Committee on Taxation says that within 10 years of a corporate tax increase, 66.3 percent of the corporate tax burden would be borne by lower- and middle-income taxpayers.
- Analysis from the Left-leaning Tax Policy Center finds that President Biden’s overall tax plan will raise taxes on 75 percent of middle-class families next year, rising to 95 percent of middle-class families over the long term.
- This is a clear violation of President Biden’s own pledge not to raise taxes on the middle class – who are already paying Biden’s stealth tax in higher prices. No wonder Senator Joe Manchin (D-WV) has urged Democrats in Congress to abandon their tax hikes.
Dems’ False Claim: “Republican tax cuts went to corporations and to the wealthy one percent.”
Fact: Republican Tax Reform Helped All Americans.
- The Washington Post has fact checked this claim, calling it “simply wrong.” The fact checker gave him “Four Pinocchios.”
- According to analysis of CBO data by the Tax Foundation, Republican tax reform reduced federal tax rates for households across every income level–while increasing the share of taxes paid by the top 1 percent.
- TCJA lifted more than 6 million people out of poverty, dropping the poverty rate to 10.5 percent, the lowest level in U.S. history.
- Income and wealth inequality fell after TCJA, as real wages for the bottom 10 percent grew nearly twice as fast as the top 10 percent and real wealth of the bottom 50 percent of households rose three times faster than that of the top 1 percent.
- While pushing for tax hikes on Main Street businesses and working families, Democrats’ special tax break for the wealthy would widen income inequality.
Rep. Brady’s full remarks as delivered appear below.
Thank you, Mr. Chairman,
So you will hear claims today that need to be fact-checked in advance.
One, you will hear that this has no impact on America’s small business. But that’s not true. Raising the individual rate raises the rate on small businesses, most of whom file as individually.
Cutting the pass-through small business tax deduction that impacts 30 million small businesses hurts those pass-through businesses as well.
Increasing and expanding the investment tax across America to all small businesses means they have less money to invest in their company, in their workers, and in their growth.
And of course, taking the onerous death tax back to what it was before the Tax Cuts and Jobs Act means more family-owned farms and businesses will now be forced to sell off their land, or sell off their property to Uncle Sam, pay their taxes to Uncle Sam, rather than pass it on to the next generation.
How is it fair that Americans work their entire life to build up a nest egg, only to have Uncle Sam swoop in and take nearly half of it over the eligible amount.
You’ll hear today that President Biden doesn’t break his pledge on taxing Americans making less than $400,000, but that’s false as well.
As you know, businesses don’t pay taxes, they collect them. And those burdens land on their workers, lands on their customers, lands on the retirees whose retirement depends on their success, and it lands on the communities that they live in.
We saw all of this prior to the Tax Cuts and Jobs Act, where it seemed like every week, Americans would wake up to read about another U.S. company moving their manufacturing, jobs, research, and headquarters overseas, leaving so many communities devastated.
Well, two different groups – the liberal, left-leaning Tax Policy Center as well as the Joint Committee on Taxation confirm that it is lower and middle income that bear a significant portion of the corporate tax rate. Their taxes will be felt. And in this bill, a significant amount of revenues raised from tobacco and other taxes, where ninety percent of that tax falls on Americans making less than 400,000.
The Biden tax pledge is simply broken in this bill.
And speaking of the President, we ought to probably fact-check some of his repeated claims, for example the one he makes almost every day, where he claims the two trillion-dollar Republican tax cuts went to corporations and to the wealthy one percent.
A fact check by the Washington Post gives that claim four Pinocchio’s, saying it is misleading, and quote, simply wrong. Not that you won’t hear that multiple times today, but it simply isn’t the facts.
They said the same of Senator Kamala Harris, claiming that the Tax Cuts and Jobs Act was a middle-class tax hike. Factcheck.org said the Center must have had a mis-Tweet it was so far wrong.
When failed Gubernatorial candidate Stacey Abrams stated that the Republican tax bill rigged the system against working people, again, Factcheck.org called it distorting the facts. In fact, the highest percentage of tax reduction went to those of lower- and middle-income families. And those who benefited the most were people of color, those with low skills, minorities, women, disabled, we lifted millions of Americans out of poverty.
Factcheck.org also gave South Bend Mayor Pete Buttigieg another fact check, for suggesting that TCJA is responsible for creating the nation’s debt problem, and noting that America had two of the largest revenue years in American history following the tax cuts. In fact, it was spending largely responsible for the debt.
And of course, Senator Bernie Sanders was fact-checked strongly, when he said 83 percent of the benefits went to the top one percent. Factcheck.org simply called it misleading.
But that’s not the only areas that need fact-checking. If you raise America’s corporate tax rate to the highest in the world, jobs will leave America in a big way. And when Secretary Yellen negotiates a global tax agreement that takes our jobs, that takes our tax base, and favors foreign companies and workers over American ones. I guarantee you that is a tax agreement Congress will reject.
With that, Mr. Chairman, I yield back.