'I Don't Believe You Can Argue': Blake Moore Grills Janet Yellen On Corporate Tax Rates

2 years ago

During a House Ways and Means Committee hearing on Tuesday, Rep. Blake Moore (R-UT) spoke about corporate tax rates.

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Transcript

00:00 Secretary Yellen, thank you for being here. I remember our visit last time. I appreciate

00:05 these days. I know they're long days for you, with a lot of questions coming from multiple

00:08 directions, but this is an important, one of the more important hearings that we'll

00:12 do all year.

00:13 So, this is going to sound like a gotcha question to start off with. It is not. I want to expound

00:22 on it and have a really thoughtful discussion on the corporate tax rate, because it's based

00:27 on our conversation last time and a continuation of that. But would you agree, can we at least

00:31 say that we agree that tax policy does have an impact on our economy?

00:36 It can, yes.

00:39 Tax policy does have an impact. So, this is the part that's frustrating me, as I hear

00:42 from my Democratic colleagues today about, you know, A, we've got such a great economy

00:48 today and we've had such a great, strong recovery and all this kind of thing. The bare bones

00:53 of our economy are still in place from the 2017 Tax Cut and Jobs Act. We saw strong economic

01:00 growth. We saw real wage growth come from the 2017 Tax Cut and Jobs Act. And I can speak

01:05 so favorably about it, I wasn't even in Congress then. So, I'm not even boasting about this.

01:10 As I watched COVID hit and threw everything off into the world, and then when Democratic

01:17 control took over in 2021, there was massive spending, but the same tax code, the same

01:23 tax rate still existed. Some things were starting to trail off. I hope to be able to reestablish

01:28 the R&D tax credits, as well as everybody on this committee, basically.

01:34 But we have seen a strong economic recovery. Unemployment is low. And I can absolutely

01:41 point that to the fact that we have had a consistent, simpler tax code that strengthened

01:48 middle class and lower income Americans since 2017. The part that concerns me is a book

01:58 that I recently read, it's called Never Split the Difference. Tax rate was 35 percent, 2017

02:03 we lowered it to 21, and now President Biden just wants to do 28. It almost feels like

02:09 lazy to me that we're just going to say, well, okay, because you admitted last time you were

02:14 here when we were having our conversation, I do believe it was too high, and now I believe

02:19 it's too low. So, we're just going to split the difference. But the part that I want to

02:22 hit on here is, according to the Tax Foundation, the top combined marginal rate on corporate

02:29 income under current law is actually 25.6 percent, and the President's proposal would

02:34 increase that to 32.2, a corporate tax rate that would be the second highest in the OECD

02:41 behind Columbia. The Joint Committee on Tax has shown that most of the cost of a 28 percent

02:46 corporate tax rate would be borne by Americans making less than 500,000. What specific analysis

02:52 can you point to demonstrating that raising the corporate tax rate won't impose burdens

02:57 on low and middle income Americans?

02:59 Well, I think all of the analysis I'm familiar with shows that TCJA, including the corporate

03:08 tax cut, was a regressive tax cut that disproportionately benefited the wealthy and large corporations.

03:20 And the corporate tax cut enriched corporate shareholders at the expense of the alternative,

03:29 which would have been benefits to middle class families.

03:33 So, if I could jump in.

03:34 It promised an investment boom that certainly never materialized. You said that the economy

03:41 did well, but I don't believe it did well because of that piece of legislation.

03:48 Okay. Thank you. Thank you. And I'll reclaim my time. I don't believe you can argue, and

03:54 if you want to come to Utah's First District, you can hear from companies in that district

03:59 where their real wage income grew for their frontline employees. This wasn't just for

04:03 all of the shareholders like it's oftentimes communicated. We will see that as we just

04:10 try to split the difference on this tax policy, that that cost will go directly to the consumer.

04:17 Take a retail company or a Home Depot or a Lowe's. If we put that extra tax burden on

04:23 them, there's only one place to put it. They still have to pay their employees. They're

04:27 going to have to raise prices on consumers. And I don't know of any analysis that would

04:32 refute that.

04:33 Well, there's an interesting recent paper that shows that there were some benefits that

04:39 went to wage earners from the corporate tax cut, but it was almost exclusively to the

04:46 highest income earners within corporations, that virtually none of it went to the massive

04:54 workers at these firms.

04:56 And that hasn't been my experience talking to actual companies in my actual district.

05:00 I know it's considered a strong talking point from my colleagues on the left, but that hasn't

05:07 been the experience companies had. Extra income that they could reinvest in their companies,

05:12 they would keep it on shore. And this is the part that I just dig into that frustrates

05:16 me so bad. And I'm already over time. And I appreciate the conversation. And I believe

05:20 next time we'll continue to talk about the corporate tax rate.

'I Don't Believe You Can Argue': Blake Moore Grills Janet Yellen On Corporate Tax Rates

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