REDUCE Act and Small Business Taxes — Congressional Record, Senate, September 29, 2021
Summary
Page S6771 of the Senate section of the Congressional Record for September 29, 2021, headed REDUCE Act and Small Business Taxes, in interleaved columns. A speaker says the myth is that the REDUCE Act affects all plastic products and that the bill is a fee on single-use plastics that targets the fossil fuel companies that make them, citing that 2 percent of the plastics stream is recycled. Another speaker criticizes insistence on jamming a partisan tax-and-spending bill through Congress, and Mr. Schumer asks unanimous consent that the Senate proceed to legislative session.
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“REDUCE Act and Small Business Taxes — Congressional Record, Senate, September 29, 2021.”
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September 29, 2021 CONGRESSIONAL RECORD — SENATE S6771
So let’s just take a quick look at Anyway, it is a good discussion to and my sister worked there and I
some of the stuff that they have been have because 2 percent of the plastics worked there. I worked on the shop’s
saying. Their myth is that the RE- stream being recycled, 10 percent or floor. I did the maintenance.
DUCE Act affects all plastic products. less of plastic in the blue bins ever ac- It was a lift truck—forklift truck
No. Read the bill. It is a fee on single- tually being recycled, and an ocean dealership, so we would grind down the
use plastics that targets the fossil fuel that has equal parts waste plastic and lift trucks and paint them. And I
companies that make the fossil fuel fish in it by 2050 is not acceptable. learned how not just to work hard but
feedstock for those single-use dispos- I yield the floor. learned how a small business can suc-
able plastic products. The PRESIDING OFFICER. The Sen- ceed. And it is not easy.
All you have to do is read the bill to ator from Ohio. After losing money the first few
see that. I don’t know how we could TAXES years, my dad found his niche and be-
make that any clearer. We specifically Mr. PORTMAN. Mr. President, I am came a successful small business. My
exempt anything other than single-use here on the floor today to talk about brother later took the business to an
disposable plastics. the massive tax increases that are even higher level, but it was still a
Further, if it is a single-use dispos- being proposed by my colleagues on the small business that struggled depend-
able plastic that is used in healthcare, other side of the aisle and by the Biden ing on what was happening in the econ-
that is used in hospitals, in patient administration and by the Democrats omy, external factors they couldn’t
treatments, we understand that; we ex- in the House as a way to pay for this control, like every small business.
empt that too. It is the plastic spoons big, new spending package—$3.5 trillion It gave me a firsthand look as to how
and the straws and the wrapping and is what it is advertised as, although difficult it is and how important it is,
the foam containers and all the rest of some say that, if you do the full 10- both, to have small businesses out
that junk that you can walk down any year calculation, it is more like $5 tril- there. My dad was absolutely com-
beach in America and see; that is the lion. But it is a lot of money, and the mitted to ensuring the people who
junk we are trying to see gets properly way it is paid for is by a huge increase worked there felt like they were part of
recycled by charging a fee on the peo- in taxes. It is the biggest tax increase, it, so he had a profit-sharing plan. It
ple who are throwing this stuff out into actually, we are told, in over 50 years. didn’t work too well when there was no
the environment and not recycling it— And I have been on the floor talking profit, but once there was profit, it
or at least 98 percent not recycling it. about this a few different times, and I worked pretty well. And there were
Here is the other myth: The REDUCE talked about the impact on the econ- guys who turned a wrench their whole
Act disadvantages U.S. businesses; we omy, generally. I talked about the im- career, lift truck technicians whom I
will fail in international competition if have known my whole life, who are
pact on our competitiveness inter-
we do this. about my age, who are retiring today
nationally, which we finally fixed in
Not true. If you are importing plas-
2017, which was really a bipartisan idea with a nice nest egg because of that
tic, you have to pay just the same way
to go to a different kind of system, and profit-sharing plan and, then later, a
as if you used U.S.-made plastic. This
it has worked so well. 401(k). So I have seen what small busi-
is a fee on plastic that touches the U.S.
But today I want to talk about an- nesses can do for their employees, for
economy if it is going to be single-use
other sector of our economy that is the local economy, for the broader
disposable, and we are going to need to
going to be hit really hard by these community.
think about recycling it. It applies to
taxes, and that is small businesses, the During COVID–19, small businesses
any company doing business in the
backbone of our economy where most have really struggled. It has been
United States and imports from foreign
people work. Specifically, I want to tough. They have been stretched really
companies. So that is another made-up
focus on how these small businesses are thin. As I am sure is the case with
myth.
And the last one, which is really— going to be hurt by the specific tax every single one of my colleagues here
maybe it is designed to annoy me, but issues that are being proposed. in the U.S. Senate, I have heard from a
it is that the fee on plastics to encour- Small businesses are generally de- lot of small business owners across my
age recycling would actually harm our fined as having 500 or fewer employees home State of Ohio who have told me
climate; that this is an anti-climate and make up about 99 percent of our about the issues that they faced due to
piece of legislation. companies in America. There are some shutdowns, due to people being sick,
The fact of the matter is that by the really big companies, but when you due to the very difficult job right now
middle of the century, plastics will ac- look at the small businesses, they are, of just getting workers to come to the
count for about a quarter of global oil by far, the vast majority of our busi- business and to stay in the business.
consumption. This is what the fossil nesses—about 32 million of them. They Workforce problems are the No. 1 issue
fuel industry is banking on for its fu- employ over half of the U.S. workforce, I now hear about back home.
ture as we start driving electric cars and they account for nearly two-thirds And due to the supply chain disrup-
that are nicer than internal combus- of all jobs created in the United States tions, taking longer and longer to get
tion cars and cheaper and easier to since 2000. Now, that is according to products and products having a higher
maintain. the Small Business Administration. and higher price due to the inflation
By 2030, greenhouse gas emissions So more than half the employees are that is reflected in that, it is tough
from new plastics production will reach there, but they actually are responsible right now. Despite these hardships, a
1.3 billion tons—1.3 billion tons—which for creating more jobs than big busi- lot of the small businesses I know have
is equivalent to running 300 coal-fired nesses. Think about it. Small busi- made it a real priority to ensure they
powerplants. That doesn’t sound to me nesses are more agile. It tends to be are taking care of their people.
much like sustainability. the startup businesses. It tends to be We helped them do that here through
This REDUCE Act is a fair and sen- businesses that are hiring more people. the PPP program, the Paycheck Pro-
sible and effective response to plastic So small business is really important. tection Program. I strongly support it
pollution that is filling up our oceans, It is the backbone to our economy. because I have seen it work. I have
our rivers, and even our raindrops. The I grew up in one of those small busi- seen employees be able to stick around
costs will be paid by the fossil fuel in- nesses. When I was a kid, my dad left through the worst of COVID and now
dustry where the profit is made. his job as a salesman for a bigger com- be able to come back to work.
And by the way, when they try to pany, where he had healthcare and the We have got another surge going on
push that cost down to consumers, benefits that come with that. And he right now in my home State and
good luck, ExxonMobil, telling Coca- sort of put it all at risk to start his around the country with the Delta var-
ctelli on DSK11ZRN23PROD with SENATE
Cola: We are raising our prices to you. own business. iant, but we are learning better how to
Coca-Cola and all of its beverage com- He started off with five employees. keep people at work and how to ensure
panies have got pretty significant mar- My mom was the bookkeeper. They that folks are taken care of. Often
ket clout, and they might just say: Not lost money the first few years, like a these small business owners have done
so fast, pal; you eat that cost. This is lot of small businesses do, but he hung this out of their own pockets; in other
your mess; you clean it up. in there. And my brother worked there words, they have lost money during the
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S6772 CONGRESSIONAL RECORD — SENATE September 29, 2021
COVID period in order to keep the busi- your prices, so they are caught in a Taxation, more than one in three tax-
ness going. And if they can afford to do squeeze. Finding workers again has payers making between $100,000 and
that, great; they can keep the doors been a real change—the supply chain $200,000 per year will be paying higher
open. Some have not been able to do issues we have talked about. taxes in 2023. By 2031, more than three-
that, and they have had to close their So why would Democrats propose bil- quarters of those middle-income tax-
doors. lions in tax hikes on small businesses payers—between 100- and 200,000 bucks
So this is a time when there is a lot right now? a year—will be paying higher taxes.
of uncertainty out there in the econ- We ought to be helping our small Remember, again, this is not just a
omy. It is a time when businesses have businesses instead, not making it hard- tax on individuals; it is a tax on small
kind of been through the roller coaster er to stay afloat. Remember, as I said, businesses that are taxed through indi-
of COVID. It is not the time to raise these are the biggest tax increases we viduals.
taxes on small businesses. have had in over 50 years. On top of that, Democrats want to
Back in 2017, Congress had the value Democrats claim they are just going cap the invaluable 20-percent deduction
of these small businesses in mind when after large corporations, but, unfortu- on qualified business income that was
we wrote the historic Tax Cuts and nately, that is not what is happening. designed to help pass-throughs compete
Jobs Act reforms. Through provisions A lot of small businesses are going to with larger C corporations.
like lowering the individual rate of be caught in the crosshairs of the in- Again, in 2017, not only lowered the
taxation and enacting what is called come tax hikes that Democrats are rates to help small businesses, but we
the section 199A deduction, we gave proposing. That is primarily because said: If you are a small business, you
small businesses needed tax relief and about 95 percent of small businesses op- can get this deduction—this 20 percent
encouraged them to invest in growing erate as what is called pass-throughs. deduction—on qualified business in-
their operations, hiring more workers, The vast, vast majority of small busi- come.
lifting wages. nesses are partnerships, sole propri- And for the small businesses listen-
And it worked. The success of small etorships, or companies that are lim- ing this evening: Watch out. I know
businesses in 2018 and 2019, before ited liability companies with sub- you have enjoyed that deduction and
COVID and after the 2017 bill was put chapter S companies. So the business you have needed it to be able to stay
into effect, was truly extraordinary. In doesn’t pay the taxes directly. The tax afloat during COVID. That is now at
February of 2020, just before COVID is actually paid by the owners of the risk.
business, on their 1040—individual tax And successful small businesses earn-
hit, we had the 19th straight month of
return. ing more than $5 million a year will be
wage increases of 3 percent or more on
What that means is that success of saddled with an additional 3-percent
an annual basis. Nineteen straight pass-throughs, which combine to em- surcharge on top, resulting in over 50-
months we had wages going up. ploy about 58 percent of the Nation’s percent average income tax. That
Isn’t that what we all wanted? That
workforce, will be taxed in line with means small businesses are going to
was the whole idea, to have an oppor-
whatever the income tax level is. And have a harder time hiring workers or
tunity economy where people can get
there are many reasonably successful paying them competitive wages.
ahead. And wages were going up faster pass-throughs that will be lumped into In all, the average pass-throughs
than inflation, which, unfortunately, is the top bracket of the Tax Code, which should expect their Federal tax rate to
not the case now. In many instances, starts at $400,000 in income. rise from about 29.6 percent—about 30
even when people are getting some These small businesses, through the percent now—to 46.4 percent under the
wage gains right now, with 5 percent- owner, will end up paying a 39.6 percent Democrats’ new plan.
plus inflation, it is eating it up. increase tax, plus a 3.8 percent surtax Folks, that is not soaking the rich.
We also had a situation back then on small business income. You add to That is slamming small business own-
where we had not just wage growth but that the average State income tax of ers all across America, as well as their
we had a reduction in poverty. We had about 5 percent, and that puts the fig- employees, many of whom are just try-
the lowest poverty rate since we start- ure for small businesses at about 48 ing to make ends meet.
ed keeping track of it back in the 1950s, percent on average—and well over 50 But Democrats don’t just want small
prior to COVID. I think a lot of it was percent in some States—48 percent businesses to give more of their money
because those tax cuts actually taxes. That is tough. And it is a big tax to the Federal Government; they want
worked. And, again, for a small busi- increase for a lot of those businesses. to make small businesses give more of
ness, it is really important because Again, they are pass-through busi- their time as well in the form of bur-
that is where most people are em- nesses, so the owners are the ones who densome new information require-
ployed. pay the taxes. ments that would bury the IRS in a sea
We also had the lowest unemploy- If they weren’t paying the taxes, they of useless information, largely, that
ment in 50 years in this country and wouldn’t often get a dividend from the would end up causing the most trouble
the lowest unemployment ever for cer- company to pay those taxes; they for small businesses that don’t have
tain groups, including Blacks, His- would be investing more in that busi- the lawyers or the accountants and
panics, the disabled. So a lot of stuff ness. So it hurts the businesses di- other professionals to handle these bur-
was going right. Then COVID hit. rectly. But a pass-through doesn’t even densome new requirements.
Now we are coming out of COVID. have to reach that level of success we Under this Biden administration
Again, the wrong time to raise taxes. talked about—the $400,000 income bank reporting proposal, individual and
That Tax Code we put in place in 2017 level—in order to be hit with tax in- businesses would be required to report
gave small business the chance to suc- creases. That is because, contrary to to the IRS inflows and outflows of
ceed and, therefore, gave a lot of indi- what has repeatedly been said by the money out of an account—things like
viduals the chance to meet their Amer- Biden administration, according to the expenditures and payments. The Biden
ican dream. nonpartisan Joint Committee on Tax- administration proposal starts this re-
The overall economy has improved ation analysis of the House Ways and porting as low as $600.
some since 2020, but a lot of small busi- Means, Democratic tax proposal, a lot But even at that higher number that
nesses have not seen that rebound yet. of taxpayers making less than $400,000 they are talking about now, what
COVID, particularly, has hurt our hos- are going to see higher taxes. Some would be reportable would represent a
pitality sector. I am in that business. percentage of taxpayers in every in- radical shift in the information re-
My family business is in that business come bracket will see their rates go up, quired to be given to the IRS, which
as well. It is tough. even folks making between 40,000 and normally just takes in information re-
ctelli on DSK11ZRN23PROD with SENATE
The travel business, entertainment 50,000 bucks per year. Check out the lated to income. This wouldn’t be
business, and every small business, analysis yourself. You can go online, about income. This would be about
again, that I know has been hit with Joint Committee on Taxation, and payments and expenditures.
higher inflation for their input. So look at it. So my hope is that these information
things are more expensive coming in, In fact, according to these distribu- reporting requirements, which is an ad-
and yet it is hard to be able to raise tion tables by the Joint Committee on ditional burden on small businesses, is
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September 29, 2021 CONGRESSIONAL RECORD — SENATE S6773
something my colleagues look at and Again, check it out. The Congressional Why would you want to throw out
say: Let’s not raise taxes on small Budget Office has its own website. You the Tax Code that fueled that unprece-
businesses, but also let’s not increase can learn about this. The Tax Founda- dented opportunity economy we saw
these burdens that will, again, fall tion has its own website. You can learn prior to the COVID pandemic?
mostly on the smaller businesses that about what is going on in terms of our I know none of my Republican col-
don’t have the ability to handle that tax collections. leagues are going to support these tax
kind of new information and bureauc- As a share of the GDP, those tax col- hikes because they believe they would
racy. lections will be back up right where be devastating to small businesses and
The upshot is that the hundreds of they were before the 2017 tax bill, in a to our economy at large. And I would
millions of accounts with major finan- couple of years, if we simply continue urge any of my colleagues on both
cial institutions; e-payment apps, like as we are. sides of the aisle who care about our
Venmo; and cryptocurrency exchanges, So the opportunity economy we long-term economic health to take a
like Coinbase, are going to be subject talked about earlier, I think, in large long look at what this tax plan would
to more paperwork and confusion. part created by the 2017 tax reforms is actually do, what it would mean to our
So as an example, if you have one of on track to bring historically high tax competitiveness, what it would mean
the 403 million active PayPal accounts, revenues to the Federal Government as to individuals and families, what it
your personal account information will we get out of this COVID crisis. would mean to small businesses, and
be sent to the IRS and likely result in Really, one of the biggest factors in instead make the smart choice to re-
confusion at some point. Imagine try- holding back our economy at this point ject these tax increases on the small
ing to prove that the money you are is surging inflation that is, unfortu- businesses—the very small businesses
pooling together for a vacation for per- nately, wiping out a lot of the income that drive the economy in the United
sonal use or for your weekly pizza gains that we have seen. States of America.
night with buddies aren’t business in- But inflation is driven largely by the I yield back my time.
come. You may have to prove that trillions in unprecedented stimulus The PRESIDING OFFICER (Mr.
now. spending the Biden administration has KELLY). The majority leader.
These small business tax hikes and pushed on the American people al- Mr. SCHUMER. Mr. President, we are
burdensome new reporting require- ready. ready to move forward. We have an
ments are just one part of a set of tax Remember the $1.9 trillion back in agreement on the CR, the continuing
overhauls that leave no stone March focused—so the Democrats resolution, to prevent a government
unturned—from death taxes to mar- said—on COVID; but, in fact, when you shutdown. And we should be voting on
riage taxes, capital gains tax increases, looked at it, most of it was not about that tomorrow morning. So I am going
retirement account tax increases, and the COVID crisis, but it was a lot of to make that an order now.
many more. new stimulation to the economy—a lot f
It is no surprise that the president of of stimulus.
the National Federation of Independent And at the time, people on both sides UNANIMOUS CONSENT
Businesses wrote last week that ‘‘small of the aisle—Republicans and Demo- AGREEMENT—H.R. 5305
businesses aren’t just looking at one or crats—who were experts on the econ- Mr. SCHUMER. Mr. President, as if
two tax hikes under the proposed plan. omy said this is going to be problem- in legislative session and notwith-
They’re looking at a slew of tax in- atic; this is just a lot of new money to standing rule XXII, I ask unanimous
creases that would hit them from every throw into the economy. consent that upon the conclusion of
angle.’’ Larry Summers, former Secretary of morning business on Thursday, Sep-
We all ought to be particularly con- the Treasury under Democratic admin- tember 30, the Senate proceed to the
cerned that Democrats want to over- istrations and a Democratic economist, consideration of Calendar No. 137, H.R.
haul so much of our Tax Code when said this is going to lead to higher in- 5305; that Senator LEAHY, or his des-
these economic trends are so uncer- flation. He was roundly criticized for ignee, be recognized to offer substitute
tain—high inflation, continuing COVID that by many in the media and many amendment No. 3830 and that the
concerns, major supply chain disrup- on the other side of the aisle. Unfortu- amendment be reported by number,
tions. nately, it turns out he was absolutely that only the first-degree amendments
By the way, it now takes 80 days— right. It has led to this high inflation in order be the following: Cotton No.
twice as long as it did before the pan- that, as we learned this week from 3833, Afghan refugees; Marshall No.
demic—to move goods from Asia to Chairman Powell of the Federal Re- 3831, vaccine mandate; Braun No. 3832,
North America. Once goods reach the serve, is not transitory, as was said No Budget No Pay; that at 10:30 a.m. on
west coast, the wait time for con- early on. Unfortunately, this current Thursday, the Senate vote in relation
tainers sitting at the docks waiting to inflation is going to continue at least to the first-degree amendments in the
be moved by train or truck is the long- through this year and next year, we are order listed, with no second-degree
est it has been since last summer, in told. amendments in order; that upon dis-
the middle of even worse COVID condi- So this new $3.5 trillion in social position of the amendments, the Sen-
tions. This is not the time to make spending is going to add to that—more ate vote on the substitute, as amended,
things worse for small businesses. stimulus. The economists call that if amended; that the bill be considered
And at a time when tax receipts are adding to the demand side of the econ- read a third time, and the Senate vote
at or above the historical average, why omy. So you are adding to the supply on passage of the bill, as amended, if
do Democrats feel so strongly that side of the economy; it would be amended, with the Braun and Marshall
America is undertaxed? counter-inflationary. But you are add- amendments and passage requiring 60
The nonpartisan Congressional Budg- ing to the demand side, what people affirmative votes for adoption; and
et Office—or CBO—projects corporate want to buy—you are adding to infla- that there be 2 minutes for debate
tax receipts will climb to $379 billion in tion. So more money out there to be equally divided prior to each vote, all
2023, or 1.5 percent of our economy. Ac- buy the goods; fewer goods raises the without intervening action or debate.
cording to the Tax Foundation, this cost of everything. The PRESIDING OFFICER. Without
would be ‘‘a record high in nominal So my concern is we are going to objection, it is so ordered.
terms and nearly matching average drive inflation even higher if we go
f
corporate tax collections as a share of ahead with this $3.5 trillion social
GDP’’ prior to the 2017 tax reforms. spending paid for, again, by these tax LEGISLATIVE SESSION
ctelli on DSK11ZRN23PROD with SENATE
So payroll tax revenue has risen by 4 increases that are going to hurt small ---
percent as well, suggesting that work- businesses.
ers are taking home bigger paychecks I can’t understand why Democrats MORNING BUSINESS
than before. To say that we are are so insistent on jamming this par- Mr. SCHUMER. Mr. President, I ask
undertaxed doesn’t seem to be con- tisan tax-and-spending bill through the unanimous consent that the Senate
sistent with the data we are getting. U.S. Congress. proceed to legislative session and be in
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