Levin -- Opening Statement at Markup of H.R. 9

Opening Statement of Ranking Member Sander Levin

Markup of H.R. 9: The Small Business Tax Cut Act of 2012

Committee on Ways and Means

The bill before us is not the shot in the arm of economic growth, rather it is a shot in the dark.

This bill is not targeted at job creation – the tax benefits it provides are not tied in any way to investment or hiring.

It is arbitrary – H.R. 9 provides a complex tax benefit that depends on a number of arbitrary factors such as the existence of other income, losses and deductions, and the classification of workers.

It is expensive and inefficient. This one-year tax cut costs $46 billion, revenue that could be better spent on provisions that promote hiring and investment, or on rebuilding our infrastructure. This cost is not paid for here, so either the majority plans to add some undisclosed offsets later or simply add to the deficit. Neither approach satisfies the test of fiscal responsibility by this distinguished committee.

All of the eligibility restrictions that the Chairman had previously placed on this provision are gone. This large tax cut that is being offered in the name of small business will now include 99.6% of enterprises whatever their nature or whatever their function, including law firms and doctor offices, all types of consultants, grocery and liquor stores to name just a few examples.

Given that this committee has spent the last year and three months talking about tax reform, perhaps the most glaring thing about the Cantor bill is that it is the antithesis of tax reform.

The House Republican Budget assumes that this committee will produce a tax reform package with two income brackets, but offers no indication at all of how to finance rate reductions that would cost trillions of dollars.

The only indication we have gotten is that the Budget Chairman has said he would eliminate what he calls "loopholes." These so-called loopholes would have to include provisions related to health, education, home mortgage interest, pensions. These are not "loopholes."

Each of them can and should be debated, but part of the reason tax reform is such a challenge is that each of these provisions was placed in the Code to serve a clear policy purpose.

I can only assume that the bill before us today would be considered another such "loophole," though one with far less merit than the mortgage interest deduction or the health care exclusion.

So since it is totally unclear how this bill will result in job creation, or how it will be paid for, or how it can be reconciled with the majority's or any other vision of tax reform, the only thing that is certain about this Bill is its political purpose.

The majority is obsessed with "not picking winners and losers," and as a result they have opposed all efforts to craft specific tax policies. This bill does indeed do the opposite – it scatters seeds to the winds, not aiming at any sources of growth, but hoping that some seeds might just germinate. They seem to think they will reap some political benefit from this, but it certainly will not yield a real crop of new jobs for American workers.

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