At Finance Hearing, Portman Discusses Updates to Senate Tax Reform Bill, Inclusion of the Stop Taxing Death and Disability Act
WASHINGTON, D.C. — Today, during the Senate Finance Committee consideration of the Tax Cuts & Jobs Act, U.S. Senator Rob Portman (R-OH) discussed how the legislation will help the middle class, create more jobs, and increase wages for American workers. Portman also discussed the bipartisan Stop Taxing Death and Disability Act, legislation that has been included in the bill to eliminate a tax penalty levied on student loans forgiven for families after the death of their child and Americans who develop permanent disabilities. Portman, who has held six tax reform roundtables in Ohio with local business leaders in recent months, has been vocal on the national stage calling for tax reform, including during recent interviews on Fox News, CNN, CNBC, Fox Business, Bloomberg TV, and NBC’s Meet The Press, as well as recently in an op-ed in the Cincinnati Enquirer.
Transcript can be found below and a video can be found here.
Portman: “We were just talking about the changes that were made in the draft and one change is to enhance the child tax credit. And it was stated earlier by one of my colleagues on the other side of the aisle that there is a reduction in the refundability, maybe even no refundability, in the child tax credit, that’s just not true. In fact, the child tax credit is expanded, as Mr. Barthold just said. It’s an expansion from current law. So, not only is the tax credit richer than it was before—it’s a doubling of the child tax credit—it also is available to more families, and also the refundability of it is expanded. I just think, again, if we can stick to the facts. For those who are watching, you might want to go on JCT.gov because that is the nonpartisan group that has analyzed this tax reform proposal. It was just said earlier that every income category gets a tax cut in the aggregate and therefore, in the middle class there are real tax cuts. In Ohio, the number that we have gotten is $2,375 per family per year. It will now be greater than that based on the changes that were made last night, because individual mandate funds are going into more middle class tax cuts. So, I just encourage people to look at the Joint Committee numbers, which are the official numbers, and see the fact that despite what was said earlier today, if you want to tax the middle class more, then you should vote ‘no’ on this bill. If you want to give the middle class a tax cut then you should vote ‘yes’ on this bill.
“Mr. Chairman I appreciate the other revisions you made in the modified mark. I think they make the bill better, including a bunch of bipartisan ideas that we already had in there including middle class tax cuts, including a territorial system at a 20 percent rate, which is something that has been bipartisan in the past, at least. A system that enables us to bring trillions of dollars from overseas back to this country, for more investment, for more jobs, and higher wages. That’s already in the bill. But then you added some other bipartisan revisions that I think can be put in three categories. One, to promote more economic growth, two to promote the ability to save for retirement and promote employee ownership, which is a good thing in my view, and finally one that is just common sense, for economic growth. I want to thank the chairman for including a provision that a lot of us have worked on for a long time, the Craft Beverage Modernization and Tax Reform Act. Senator Wyden has been a champion of this approach and the growing craft beverage industry. This bill now gives the smaller companies much needed excise tax relief that will allow these entrepreneurs to reinvest even more in their businesses and into our communities. Ohio is number four in the country in craft beer production. We like that. The industry now supports about 15,000 jobs, 61 new breweries have opened just last year alone in Ohio. This legislation is only going to promote the expansion and the jobs that come with these entrepreneurial small businesses.
“In the saving space, I’d like to thank the chairman for accepting the amendment to the original chairman’s mark that protects the nonqualified for compensation and also the 401K catch up contributions. What are these? The amendment protects, in the nonqualified space, the broad based stock option plans which are actually growing in this country. I think that’s a good thing among small startup businesses they are really important, and this gives all employees a better stake in their company and in the future of that company. We protect these stock option holders from income tax that would have been on phantom income they may never had received, which I believe would have been unfair. These types of savings vehicles are critical to helping small employers attract new talent and for giving employees an ownership stake in the company they work for every day.
“The amendment also restores the ability for those over 50 years old to use the catch up contribution. In your 401K this is something that Senator Ben Cardin—again bipartisan idea—and I fought for. We got it into the law several years ago and we want to make that it stays in the law because we want to encourage people to save more for their retirement. So I think these are important changes, I appreciate you, Mr. Chairman, for doing them.
“Finally, common sense. Senator Coons, another Democratic colleague of mine, and I have a bill called Stop Taxing Death and Disability Act. That’s a pretty good title. What it says is that if someone has a child who develops a permanent disability or if that child were to die tragically, then their student loans ought to be forgiven. I think this is an improvement of our current law as well. Maybe Mr. Barthold, if you are willing, you can walk us through how it works, what happens under present law when a child dies or develops a permeant disability and their student loans are forgiven and what would happen under this legislation. We’ve had some tragic circumstances in my state of Ohio, one was the Carducci family in Steubenville, Ohio. Tragically, they had a child who developed a permeant disability and yet they had a big student loan debt to pay and this legislation would help them. If you would, Mr. Barthold, just speak briefly on this new legislation that is in the chairman’s mark today.”
Mr. Barthold: “Certainly, Senator Portman. Under general tax principles and feature the internal revenue code is forgiveness of any debt is considered an increase in income. What your legislation would do, would be in the situation where a student had a student loan often, they are cosigned by a parent or guardian, and they die, by having cosigned or guaranteed the debt that would become, if the loan is forgiven—as is often done on the death of a student—that becomes forgiveness of indebtedness to the guarantor, so to the parent. Otherwise, they would have taxable income. Your legislation would make an exception from the general rule in that situation.”
Portman: “Well and again I think this is just common sense and an example of some of the changes in the chairman’s mark last night that are bipartisan, that are broadly supported by this committee and that will improve this legislation. Thank you.”