At Hearing, Warren Calls for End of Trump Tax Cuts for Giant Corporations

Hearing

"So in 2017, the Republicans in Congress passed one of the biggest tax giveaways to millionaires and giant corporations in recent memory. The Trump tax cuts kicked working families to the curb, while it added about $2 trillion to the national debt, all so that Republicans could give a massive handout to their wealthy pals and donors.

But the $2 trillion price tag on this doesn't actually tell the full story. That's because some of the corporate tax breaks had expiration dates. Now expiration dates, not because they actually wanted those tax breaks to expire, but expiration dates because that meant they could represent that the total cost of the giveaways would look smaller than they really were.

Corporate lobbyists went along with this because they knew that when the tax breaks expired, Congress could be counted on to renew them endlessly. Now, three of the biggest giveaways are starting to expire, and the corporate lobbyists around here are working overtime to get them extended.

Ms. Huang, corporate lobbyists claimed that these three giant giveaways, known as bonus depreciation, R&D expensing, and the net interest deduction, were really important, because they would spur American investment. So now we have some data on how these corporate tax giveaways work. Does the data show that companies have used their tax breaks to make new investments?"

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"So, take bonus depreciation as an example here. Under normal tax rules, businesses are allowed to deduct expenses from their income so they aren't taxed for the losses that they take. Because certain assets lose value over time, like machines or buildings, businesses can typically deduct the cost of that depreciation over the life of the asset.

But bonus depreciation takes this logic and turns it upside down. Instead of taking a chunk of the depreciation each year that the asset has value, say a new set of delivery trucks, bonus depreciation lets businesses deduct the entire cost of those delivery trucks in the year that they buy them. Ms. Huang, why do businesses benefit so much from bonus deductions, bonus depreciation?"

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"Okay, so the tax breaks are not used to increase investment. And in fact, these tax breaks, business tax breaks, are going to the very richest corporations. And now like they did in 2017, and like they've done so many times before, corporate lobbyists are asking for a temporary extension of these tax breaks, to make them look cheaper than they actually are. But they have every intention of pushing Congress to extend these tax cuts again and again and again, so their wealthy clients will never actually have to pay the bill.

Ms. Huang, if we look at the true cost of extending these three corporate giveaways that's being championed by lobbyists, and not made-up versions that are being peddled by the corporate lobbyists, what would those figures look like?"

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"Woah, the difference between 3 billion and say that second number again?"

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"325. So, the nominal cost of this, the representative cost of this is about 1% of what you say it would really cost?

You know, look, I get it, extending corporate tax breaks is really good for massive corporations, but it's also really bad for the American people. We should not be rubber-stamping Trump tax cuts for giant businesses. While Republicans play political games, Democrats should be doing everything in our power to make sure that millionaires, billionaires, and giant corporations are paying their fair share.

Thank you, Mr. Chairman."

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