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Public Statements

Providing for Consideration of H.R. 9, Small Business Tax Cut Act

Floor Speech

By:
Date:
Location: Washington, DC

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Mr. HASTINGS of Florida. I thank my friend for yielding the time.

I would begin a little bit unusually by asking a few questions of my friend and then yielding to him for any response that he may have.

A gentleman named Bruce Bartlett was the former Department economist for President Ronald Reagan. He makes this comment: The serious point here is that the term ``small business'' casts a very wide net.

Indeed, since the only test for being a small business under the legislation, as my good friend proposes, is the number of employees, the ultimate beneficiaries of the Republican bill will be some large and profitable businesses that just happen to have few employees.

What is my friend's response to that?

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Mr. HASTINGS of Florida. Then I ask my friend first to just listen, and then I will ask yet another question.

Mr. Bartlett also said this:

The Republican tax plan will do nothing whatsoever to increase employment. It is nothing more than an election-year giveaway to favored Republican constituencies and should not be taken seriously.

But I ask my friend, after hearing what Mr. Bartlett said, and listening to you, as well, saying that it's suggested that there will be jobs, is there a requirement in the legislation as is proposed that requires the creation of jobs?

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Mr. HASTINGS of Florida. Let me offer to my friend a complaint: the fact that this matter didn't go through regular order, did not have hearings. It did have one

question period during the Ways and Means Committee markup, and the person that was being questioned on the Committee on Taxation was the chief of staff, Thomas Barthold. And when he was asked about the effects of H.R. 9--and the question was put to him by our colleague, Mr. Becerra: Is there a requirement that you create jobs? Mr. Barthold says: There's no requirement on the result of the tax relief.

I go back to you and ask you again: Is there a requirement that jobs be created in the measure as offered?

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Mr. HASTINGS of Florida. My friend says that no one would do anything that would not necessarily work. Well, why are we spending the time on this when my friend and I know that this measure is not going to become law for the reason, whether we like it or not, that the United States Senate is not going to pass it?

Last week, contrary to what you said, in the United States Senate the President's plan and the Democrats' plan was offered where there would be an alternative minimum tax for people that pay a million dollars or more in taxes. It's been referred to as the Buffett rule. You said that it didn't pass. It had a majority. But it didn't come up because Republicans didn't allow for it to have a majority. Whereas, had it come up, it likely would have passed because some Republicans would have caused it to pass, also.

You don't create jobs with your 20 percent. And now you need to answer for me: What if somebody, after they get the 20 percent, rather than hiring somebody, fires somebody; do they still get the tax cut?

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Mr. HASTINGS of Florida. All of what my friend says is most regrettable. One of the things that I'm sure Members in your Conference are concerned about is the fact that this is a 1-year measure.

Am I correct about that?

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Mr. HASTINGS of Florida. Tell me then, how many times have we passed anything 1 year that's a tax something or another that cuts taxes? Let's take the Bush tax cuts that lasted 10 years that are soon to expire. How is it then that you expect that this is not going to go beyond 1 year? One year already is going to cost $46 billion.

Now my friend is a deficit and a debt hawk, and I like to think that I'm conservative enough to feel that the deficit and the debt are matters that we should address in order to give Americans opportunity. Toward that end, what is a $46 billion measure going to do, other than blow a hole in the deficit, since it's not paid for?

I yield to my friend.

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Mr. HASTINGS of Florida. Reclaiming my time, we can point back. I'm talking about what you're trying to do today. What you're trying to do today is blowing a $46 billion hole in the deficit, which will destroy opportunity.

I thank my friend, and let me move on, now that I've had the opportunity to talk with you.

I rise in strong opposition to this rule and its opportunity-destroying under the underlying bill. When it comes to small businesses, Congress should work to create chances for smart, savvy, small business owners to thrive so that hardworking Americans can get a fair shot at a good paying job for an honest day's work and thereby ensure that our economic recovery continues.

Instead, the Republican bill creates only one opportunity, and that is the opportunity for those that are better off, including those of us in the United States Congress, to pay less than we could and can as our fair share in taxes.

Make no mistake: H.R. 9, despite its name, is not going to level the playing field so that American businesses can create the kinds of opportunities that the average American needs. That's because House Republicans have made the benefits of this bill available to a wide range of enterprises owned by wealthy people, including lawyers. I'm one of the lawyers, not one of the wealthy. But when I was a lawyer and had three secretaries as a single practitioner, if you had given me a 20 percent tax cut, I may have shared some of that with those three employees. I assure you I would not have hired anybody. Had you, when I was a lawyer, given me a 20 percent tax cut and required me to hire somebody, then I would have hired somebody, and it may have done some good. But other wealthy people--lobbyists, hedge funds, private equity fund managers, as well as many professional sports teams, without a single requirement to expand employment or invest in the United States.

In fact, under this bill, a business owner could fire, as I asked my friend, U.S. workers, hire full-time workers in foreign countries and still be eligible for the full deduction.

According to an analysis of the Tax Policy Center, approximately 49 percent of the benefits of H.R. 9 would go to 0.3 percent of people with incomes exceeding $1 million in 2012--each receiving an average tax cut of more than $44,000.

That's not creating an opportunity environment in which small businesses can create jobs. As I've said before and will say again, I have no quarrel with millionaires and billionaires and the wealthiest of us in America. And like my friend from Texas, I want everybody to be able to have significant wealth if that were to be possible. I do, however, have a problem with legislation designed to tip the scales in favor of the best among us in this country masquerading as tax cuts for small businesses.

Furthermore, Madam Speaker, the Republican justifications for this kind of ``trickle down'' tax policy are inaccurate and debunked by history. In actuality, tax rates have little bearing on economic productivity. Some of the fastest economic growth of the post-war period came in the 1950s, when the top tax rate was above 80 percent. The slowest growth came in the 2000s, when the top tax rate was 35 percent--which I pay, and which some of you do not because you are in better circumstances than mine, but all of us in the House of Representatives are better off than the people we want to really help, other than those that are better off like us.

Furthermore, Madam Speaker, the Republican justifications allow that this occurrence, that the change from the 1950s to the 2000s, is easy to explain. Businesses do not make decisions based on tax rates. They make decisions based on factors specific to their business, like their number of competitors and larger macro- and microeconomic factors.

Bills such as the one before us today ignore this reality in favor of pushing Republican pet policies that ignore the actual difficulties facing hardworking small business owners. In the Rules Committee, I cited Betty's Restaurant in Fort Lauderdale, Florida, where I eat breakfast and sometimes lunch or dinner. Betty's doesn't have more than nine employees. If we were to target our relief to 20 percent, Betty would be in better shape. But if Larry Flynt at ``Hustler'' is going to be in better shape because he has less than 500 employees, I'm taking Betty.

I get my clothes cleaned at Spring Cleaners. They've been in business for over 25 years. The owner of that business, after he retired, left it with his daughter. They don't have more than 10 employees in 2 of their cleaning plants. This kind of measure, if targeted to her, would help her. But a law firm here in Washington or a lobbying firm with 49 lawyers that's making $500 million a year will qualify for this tax cut, and I'm taking Spring Cleaners over those lawyers and lobbyists here in this town.

Simply put, what we have before us is the exact opposite of a jobs bill. It's a boon for the rich, the very antithesis of smart tax reform, and does nothing to create opportunities for middle class, let alone, poor Americans. Instead of this misguided legislation before us today, Madam Speaker, we should pass policy initiatives that stimulate economic growth and job creation such as public-private partnerships.

When compared to measures such as infrastructure spending, today's bill would have a relatively small effect on strengthening our economy and helping businesses create even more jobs. In comparison, for every $1 billion invested in infrastructure construction projects, 18,000 jobs--and nobody controverts that, and if you do, say 15,000 jobs--are supported nationwide. And my Governor turned down a billion-plus dollars for a rail project that had been appropriated and that Republicans and Democrats had sought, and it would have created 18,000 jobs. And yet we find ourselves in Florida, just like other places in this country, suffering job diminution. This wasn't money that did not go to Illinois, California, and the Northeast Corridor for rail; it just did not come to Florida.

There are other circumstances. We yesterday passed a measure here to extend the transportation measure for 3 months. Cut me some slack. Jim Oberstar had been begging us before he left Congress to do a $400 billion infrastructure bill that probably would have put us in the position of not having to have done the stimulus had

we done it when he asked for it, and we need to do a better bill than the 3-month extension. This was the 10th extension of the transportation measure that we have done. We are better than that, and we could have done what the Senate offered, MAP 21, and we would kick-start this economy rather than kicking this can down the road.

Let me tell you something about the can. It's getting ready to run up against a wall or a cliff, and there ain't going to be nowhere else to kick it. Some day, Republicans and Democrats, liberals and conservatives, are going to have to stand up and face the fact that we must address this in a significant way, and we can't have this gridlock, and we can't have this continuing standoff.

This is supposed to be the ``land of opportunity,'' Madam Speaker. Let's make sure that it's the land of opportunity for rich people. Let's make sure that it's the land of opportunity for middle class and poor people. Let's make sure that it's the land of opportunity for small and large businesses. In short, opportunity for all Americans.

I reserve the balance of my time.

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Mr. HASTINGS of Florida. Madam Speaker, if we defeat the previous question, I will offer an amendment to the rule to ensure that the House votes on the Buffett rule, which Representative Baldwin has introduced--and I'm a cosponsor of--as H.R. 3903, the Paying a Fair Share Act of 2012. This bill would ensure that people making over $1 million a year do not pay a lower tax rate than middle class Americans. To discuss our amendment to this rule, I'm very pleased to yield 3 minutes to my good friend, the gentlewoman from Wisconsin (Ms. Baldwin).

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Mr. HASTINGS of Florida. Madam Speaker, I yield myself the balance of the time.

H.R. 9 is not about creating jobs or helping small businesses increase hiring. It is another in a long line of Republican proposals that benefit those of us, including those of us in the House of Representatives, that are the better-off Americans at the expense of the middle class.

My Republican friends rejected an amendment offered by our colleague, Representative Crowley, which I offered in the Rules Committee in his stead, which would have prevented businesses from eliminating jobs in the United States while creating jobs overseas under this bill.

Procedurally, it is also disconcerting that, contrary to my Republican colleagues' self-professed commitment to an open process, Democrats have been allowed only one substitute in an otherwise closed process. Nor was H.R. 9 the subject of any hearing before either the full Ways and Means Committee, or the Select Revenue Measures Subcommittee, with the exception of a brief question-and-answer session with Joint Committee on Taxation staff during the markup.

Finally, instead of taking real steps to address the very real need to create opportunities for businesses to succeed in a still nascent economic recovery, House Republicans are more than willing to rush through another tax bill that could, if it were to pass--and it is not going to, and they know that--only help those of us that are better off in society, while sticking middle- and lower-income families with the bill and creating exactly zero jobs.

And you call this opportunity?

Madam Speaker, I ask unanimous consent to insert the text of the amendment to the rule in the Record along with extraneous material immediately prior to the vote on the previous question.

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Mr. HASTINGS of Florida. Madam Speaker, I urge my colleagues to vote ``no'' on this opportunity-destroying measure and to defeat the previous question. I urge a ``no'' vote on the rule, and I yield back the balance of my time.

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