Senator Lankford Touts Benefits of the Senate Tax Reform Bill
Lankford: “A middle-income family in Oklahoma will have an increase in their take-home pay of $2,200”
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WASHINGTON, DC – Senator James Lankford (R-OK) today delivered a speech on the floor of the Senate to tout the benefits of the tax bill that passed the Senate on December 2. Lankford used the speech to clear up misinformation about the bill, and to explain how the bill would help middle class Oklahomans. This speech comes a day after Lankford penned an op-ed on the same topic.
Mr. President, we're in the middle of a have very protracted conversation about tax reform. This conversation started in January. I heard people say it was rushed through at the end. It started in January. We’re starting into month twelve of this process. There were hearings in the House. There were hearings in the Senate… different drafts coming out, shot down, start all over again, and coming back and forth. We’re now starting our 12th month of going through this process. As we get close to the end, I want to outline a few things that we're actually working to be able to set back to this body to the American people what’s actually happening here.
The focus of this from the beginning, from the very start of it, was two simple things: How can we reduce the rates for individuals so they can keep more of their own money and then spend their own money to stimulate the economy? The second aspect was, how can we simplify the system? There is a lot going on with the back and forth on the final details, but those two things are very clear. This dramatically simplifies the tax structure that we have and it reduces rates for people so that people have more of their own money to be table to spend. Businesses have more of their own money to be able to invest in their business, to pay their workers more, to be able to buy more equipment, and expand their business. That helps everybody in the economy. Whether you save your money, or whether you spend your money, or you’re able to keep your own money.
So, here's what this means for hardworking Americans and in particular for my state of hardworking Oklahomans.
Every bracket gets a tax deduction. In fact, the Tax Foundation, as they’re studying the Senate plan going state-by-state, they looked at the middle-income family in Oklahoma, and the Tax Foundation found that the middle-income family in Oklahoma will have an increase in their take-home pay of $2,200 over the next year. People will see it in their paycheck when it’s not being withheld anymore, because they’re able to keep more of their own money. The Senate plan doubles the standard deduction so that a single adult working will have the first $12,000 of their money is not taxed all. For a married couple, that is $24,000 of their income is not taxed at all. We also double the child tax credit to $2,000 directly to be able to protect the people that need the help the most. What does that look like for us? When you take an Oklahoma family of four, that family with all the incomes put together with two working parents that are there, that typical family of four in my state makes about $73,000, combining all of their income together. That family of four with a $73,000 total income for the family will see a cut in their tax bill of $2,200 next year. They pay typically about $3,600 in federal taxes, next year they will pay $1,500 in federal [income] taxes. That's a pretty dramatic shift for them.
Let's take a teacher in Oklahoma. A teacher that has been teaching for a couple of years, a single mom with a couple of kids, $41,000 in total income, trying to be able to make ‘ends meet.’ That single mom with a couple of kids will see a tax reduction of $1,400 for her. That is incredibly significant to her in day-to-day life. I can assure you every Oklahoman would be glad to see an extra $100 in their paycheck or $150 in their paycheck every single month. That buys a lot of groceries and that sure does bring a lot of help.
This is a process that really does affect real people and it has been lost in all the conversation. It has been interesting to me to hear the debate and all the noise on it. I'm hearing things that I’m calling the ‘tax myths’ of this bill. The most common one is that it will increase taxes for those in poverty. So, people that are out there saying ‘oh my goodness, this is going to increase taxes for those individuals.’ It does not. It actually does the exact opposite, not only by reducing rates but increasing the standard deduction, by increasing the child tax credit. It helps people that need help the most.
I have also heard individuals out there in the media say this is going to hurt people because the individual mandate, something unrelated to tax policy entirely, has been snuck into the tax bill. Well, the individual mandate on the Affordable Care Act is a tax policy that was actually added to a health care bill. This is a tax bill dealing with the tax aspect that was snuck into the original Obamacare healthcare bill. How does that work? Well, the individual mandate says if you don't buy the insurance that’s approved by the folks in Washington, DC, then you get an extra tax on you. Where does that tax go? Well, in Oklahoma 81 percent of the people that pay that extra tax make $50,000 or less. That extra Obamacare tax, that penalty that was put on there was targeted directly at the middle class. And the middle class in Oklahoma pays that fine 81 percent of the fine that is paid is paid by people making $50,000 or less in my state. We want to see that tax rate go down for those individuals and we want to allow people to be able to have that choice. That's a significant change for those individuals that are not only trying to make ends meet they don't want to see one more tax laid upon them.
It also put into an extension of the 529. Many parents set aside a little bit of money every month to go toward the child's college education. This [provision] would allow it to also be used for education that they can use from kindergarten to 12th grade as well as college, increases that opportunity. The House bill did have a portion in their bill about student loan interest and tuition waiver for graduate students. The Senate actually does not have those two areas. Protecting graduate students and tuition waiver expenses. I think that's important. There's also been a great myth that's out there that Republicans are cutting Social Security, Medicare, and Medicaid with this bill. Can I tell you, there is nothing in this bill about Social Security, Medicare, Medicaid. We are not trying to damage or change any of those programs. In fact, there was one of the hearings that came up in it just last month where JCT, the Joint Committee on Tax, was asked that question directly and they affirmed that there is nothing in the bill that is trying to change those policies. That is just a myth that’s sitting out there.
What we need is a healthy growing economy. Our economy has been flat for the last eight years, growing at around 2 percent. Historically, the United States economy, since World War II, has grown at about 3 percent. That little one percentage point may not be a big deal, but that's a lot of jobs across the country, that’s increased wages across the country, and that’s increased opportunity. I feel sorry for college graduates that graduated in the past several years because they’re trying to land a job in this economy and are finding it difficult it is to get a job in this economy and they wonder if it has always been like that. It has not. If you go back just a decade or two decades ago, people were graduating out of college and landing into great jobs because the economy was growing faster. If we don't do something to get this economy growing faster again, we will continue to have limited opportunities for all Americans and people's paychecks will continue to be flat yet another decade. This is a way to nudge the economy, to say let's get it back going again. Quite frankly, my Democratic colleagues eight years ago passed a $1 trillion stimulus package and said that’s what would nudge the economy and the economy didn't budge at all. This is an opportunity to come back and say, let's actually do this right. Not having the government spend your money, but allow you to keep more of your money and allow the free market, just from people spending, buying, and saving and watch that lift the economy. That lift makes a tremendous difference.
One last interesting conversation. There's been a lot of folks that talked about deficit or debt effects in this bill, to say that this bill could be up to another $1 trillion in the deficit. This is typical Washington speak and the challenge of serving here in Washington. There are 130 economists that look at this, all turn in reports, everyone has a different outlook. Economists study hard. They look at their numbers, they run their models, but everyone is guessing. And I get that. They are educated guesses, but they are all guessing. It is the responsibility of us here in this Chamber to look at their models and to look at the study and determine does this work. For instance, J.C.T. [Joint Committee on Taxation], in their study of it, said that there will be about half trillion dollars in deficit, because of this bill. But what they didn't take into account, when you look at their actual numbers, is any real increase in international funding, any increase in our American businesses that do business here in America and across the ocean. That's not really taken into account in their [estimates]. They also don't look at tremendous swaths of the economy because they don't have that in their model. The focus of this is if you look at the studies, and if you ask the questions, they’ve all got very conservative estimates, as they should, as economists. But if our economy even goes up to maybe 2.5 percent, so half a percentage point of what's typical for us, we're far in the black. I understand it's always a risk. My Democratic colleagues took a risk eight years ago when they spent almost $1 trillion in the stimulus package saying, saying I hope this works, and it did not.
I understand it's a risk, but I think it's an appropriate risk to be able to say let's allow Americans to keep more of their own money to invest in this economy on the risk that we grow the economy .2 percent more to be able to break even. I think the American economy can grow much faster than that. She has for decades up until the last decade. Let's get us back to our old normal and allow that to be our new normal. There's a lot of questions on the tax policy, rightfully so. It's important to all of us. Let's get it right and let’s keep moving. Over the next couple of weeks, this body along with the House, we'll do a conference committee. It's a back and forth about how do we resolve the differences between the House bill and the Senate bill. When that's done, it will have to pass the House and it will pass the Senate and go to the president's desk. In the days ahead, Americans will see the changes in their own paycheck as they see their rates go down and people are able to keep more of their own money. Understanding that the median family, their rates are set to go down by 60 percent in this bill. It's a tremendous benefit to them and one we shouldn't miss that opportunity. With that, Mr. President, I yield the floor.
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