Senate Proceeding on Jun 24th, 2010 :: 6:53:40 to 7:39:20
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6:53:38 to 6:53:58( Edit History Discussion )

Olympia Snowe: ms. kagan's responses. and i yield the a senator: madam the presidin senator from maine. ms. snowe: thank you, madam president. today i rise to express my concerns about the pending tax extenders legislation that we'll be debating and voting upon here in the senate shortly.

6:53:40 to 7:39:20( Edit History Discussion )
Speech By: Olympia Snowe

6:53:59 to 6:54:19( Edit History Discussion )

Olympia Snowe: as you know, we have had a series of -- of votes on this particular question to no avail. there is no substantive reason for the impasse that we've arrived at on this package, madam president. it certainly could have been different. i have been involved in a number of discussions over the last two weeks with respect to how we

6:54:20 to 6:54:42( Edit History Discussion )

Olympia Snowe: could reach a resolution on some of these questions, so i think it's important to set the record straight. frankly, i think that ultimately it's become the result of a yawning chasm that exists between the artificially generated political landscape in washington and the actual real-world state of our economy that americans have been

6:54:43 to 6:55:03( Edit History Discussion )

Olympia Snowe: experiencing on a daily basis beyond the capital beltway. if we were really serious about creating jobs, we absolutely could identify a pathway to extend the expiring tax provisions in this legislation which are important to america's job generators without simultaneously and inexplicably raising taxes on small businesses that -- small

6:55:04 to 6:55:25( Edit History Discussion )

Olympia Snowe: businesses, the very entities we look to to lead us out of this recession in the name of increased spending and a more expansive tax extenders package. madam president, this approach mply makes no sense and lays bare the stark disconnect between washington and the entire rest of the country. you know, we hear here a mantra

6:55:26 to 6:55:46( Edit History Discussion )

Olympia Snowe: of jobs, jobs, jobs is our number-one priority, as it should be. concerns about the economy, which is foremost on the minds of the american people. rightfully. that's why there is so much anxiety across america today on main street. that i don't think is being replicated here in the united states senate in the overall congress with respect to the actions that we should be

6:55:47 to 6:56:07( Edit History Discussion )

Olympia Snowe: taking. yet, what's proposed for legislation here today, and that's the disconnect that exists between here and the rest of america is taxes, taxes, taxes, spending, spending, spending, which will do nothing to grow our economy, and in fact we still haven't considered a small business jobs package a

6:56:08 to 6:56:31( Edit History Discussion )

Olympia Snowe: it's now almost july. madam president, what is it that we don't understand and what's happening in the economic landscape and among small businesses upon whom we depend to create jobs? it's not exactly that we're mass producing jobs in america's economy today. in fact, i met yesterday with the president of the boston

6:56:32 to 6:56:52( Edit History Discussion )

Olympia Snowe: federal reserve, eric rosengren. as he pointed out, the growth the economy has demonstrated thus far is for the most part an inventory. this is not exactly real growth. it's drawing down inventory, but the economy hasn't demonstrated an ability to create jobs and real economic growth because

6:56:53 to 6:57:14( Edit History Discussion )

Olympia Snowe: there is uncertainty among the business sector and in particular small businesses that do not want to take the risk of investments or hiring additional people because of the uncertainty of the policies that are emanating from washington. last month as we discovered with the unemployment numbers of the 431,000 jobs that were created,

6:57:15 to 6:57:36( Edit History Discussion )

Olympia Snowe: 411,000 were due to taxpayer government workers that our national unemployment rate isn't worse than it is right now. so ultimately our government is the only real growth industry in this country, and i challenge anyone to seriously argue that that's a sustainable path to a brighter economic future. the fact is growth is not occurring in our economy. i have heard that time and time again.

6:57:37 to 6:57:58( Edit History Discussion )

Olympia Snowe: i have heard that from small businesses, medium sized businesses, large businesses. every organization that represents businesses in america, madam president, are saying there is no real growth in our economy and that they are not going to be hiring. they are not going to be making the investments necessary

6:57:59 to 6:58:20( Edit History Discussion )

Olympia Snowe: because of the uncertainty from coming from washington with respect to taxes, with respect to regulation, with respect to the health care legislation that became law this year. so what will it require? and the -- in the federal reserve's analysis, it will require in terms of reducing the unemployment rate in this

6:58:21 to 6:58:42( Edit History Discussion )

Olympia Snowe: country, just in order to reduce unemployment rate to let's say 5.8% by 2012. in the charts they gave me yesterday, it would require at least a 6% annual growth rate in g.d.p. in order to equalize the losses in jobs that we have already experienced in suffering.

6:58:43 to 6:59:04( Edit History Discussion )

Olympia Snowe: as a child, that rate would kate it would be slightly higher than the level of growth we experienced in recovery from the 1982 recession and it approximately doubles the growth following the 1991 and 2001 recession. so when you think about it, so in order to achieve, you know, a

6:59:05 to 6:59:25( Edit History Discussion )

Olympia Snowe: 5% unemployment rate by 2012, it would require a approximately 6% annual gwth rate in 2011 and 2012. would it be possible under the scenario that is occurring? probably not, madam president, because the growth isn't occurring and job creation certainly is not. that is disturbing and is deeply troubling. in fact, i was talking to someone today who is in the

6:59:26 to 6:59:46( Edit History Discussion )

Olympia Snowe: business community who said that small businesses are not going to take those risks. you will not see the kind of start-ups in america because of the state of the economy, because ofhe policies that are coming out of washington that means more taxes and more spending, which gets to the tax extenders package that's before

6:59:47 to 7:00:08( Edit History Discussion )

Olympia Snowe: us today, and that is my concern with the detachment that we have between what is happening in america on main street and what's happening here in washington, d.c., and the u.s. house of repsentatives and the united states senate. madam president, there isn't that reality check, and that's obviously exemplified by the kind of legislation that we're trying to ram through the

7:00:09 to 7:00:29( Edit History Discussion )

Olympia Snowe: congress once again. that means more taxes and more spending, that's going to cost more jobs. it's going to provide more risk in the economy, and therefore we're not going to see the kind of economic growth that the american people deserve. and somehow we think that there is not a cause and effect or a correlation between what we do here and what happens across

7:00:30 to 7:00:52( Edit History Discussion )

Olympia Snowe: america. i know that in talking to my constituents and to small business owners, i hear it day in and day out. i go home and i talk to them and i listen more importantly and i hear what they're saying, and they are uniformly saying the same thing: that the policies coming out of washington causes

7:00:53 to 7:01:13( Edit History Discussion )

Olympia Snowe: them great pause, it causes them alarm. and therefore they will not take the risks, they will not make the investments to increase the number of employees and to add to their personnel or to make the capital investments because they do not know how much the federal government is going to cost them with respect to taxes,

7:01:14 to 7:01:35( Edit History Discussion )

Olympia Snowe: with respect to regulation and of course the new health care law. and all of the other tax consequences that has now resulted in this legislation that is pending before the united states senate. somehow people think that it just won't matter. and then i'm beginning to think that maybe people haven't read these provisions and understand

7:01:36 to 7:01:57( Edit History Discussion )

Olympia Snowe: exactly how they work, and that's why there's so much concer and apprehension across america. and that's why congress has such a low approval rating and has certainly crossed the historic thresholds in terms of how low it is. and understandably so, because there is that -- there is no

7:01:58 to 7:02:19( Edit History Discussion )

Olympia Snowe: connection, there is no correlation between what we're doing and really what's happening across -- in america and in small businesses and in family households that have lost their jobs and are enduring anxiety, and apprehension about, you know, where the next job is going to come from and how they're going to make ends meet.

7:02:20 to 7:02:40( Edit History Discussion )

Olympia Snowe: so we truly have our work cut out for us when we look at the low economic growth, the inability to create jobs. and, frankly, the fear, you know, when you think about what has, you know, been created, you know, in this economy is from the standpoint -- isn't so much the problems that we're dealing

7:02:41 to 7:03:02( Edit History Discussion )

Olympia Snowe: with today, it's that the direction that congress is taking with respect to the issues that matter most to them in order to take the risks that we need them to take in order to reverse this economic cycle. it also, when you think about the projections f economic growth, doesn't take into

7:03:03 to 7:03:23( Edit History Discussion )

Olympia Snowe: account the potential effects of what's happening in europe and the economic turmoil that certnly could engulf our own economy or the potential fallout from the b.p. disaster in the gulf. that has not manifested itself in the unemployment numbers or economic growth. it's a travesty what is happening there but it certainly

7:03:24 to 7:03:44( Edit History Discussion )

Olympia Snowe: is devastating a way of life and so many small business owners. so that's another dimension and component that we'll have to incorporate, you know, in our calculations for the future. and certainly that will have an impact on the bottom line with respect to job creation and our ability to see the kind of

7:03:45 to 7:04:07( Edit History Discussion )

Olympia Snowe: growth that we require in order to reverse this -- the declining growth in america. so we certainly have our work cut out for us and that's what makes me wonder exactly what the world we're living in here in congress as we pay lip service to job creation when in reality we're instead on a glide path towards higher taxes and america's job generators.

7:04:08 to 7:04:30( Edit History Discussion )

Olympia Snowe: at precisely a moment in time when we should be providing the kind of relief i've been advocating with small business legislation that i've been championing for sixonths now, six long months. it started in january. i thought it was going to be on the front burner. it's still languishing on the back burner. so much for jobs being a priority. so much for depending on small

7:04:31 to 7:04:51( Edit History Discussion )

Olympia Snowe: businesses to create those jobs. and so we have paid no deference to the greatest issue that's facing america today and that is job creation and the economy. that's the number-one priority of the american people. but here we are approaching july and it's yet to be on the legislative calendar, even

7:04:52 to 7:05:13( Edit History Discussion )

Olympia Snowe: though i've been promised and i know, madam president, who serves on the small business committee, has been a great advocate and champion for small business tax relief and creating jobs and how vital it is. we've had numerous hearings on that question before our committee that underscores the imperative of passing a small

7:05:14 to 7:05:35( Edit History Discussion )

Olympia Snowe: business tax relief program so that it can generate jobs because they are the ones -- the one entity that creates jobs in america. but we have yet to consider the small business tax relief jobs package. it's approaching july. i had a package prepared in mid-march and i was asked to defer because we were promised

7:05:36 to 7:05:56( Edit History Discussion )

Olympia Snowe: that we would be considering a small business jobs package before the april recess. well, april has come and gone. may has come and gone. june has come and gone. obviously, july will come and go, because even if we consider it, by the time it becomes law... so it's regrettable.

7:05:57 to 7:06:18( Edit History Discussion )

Olympia Snowe: and now it's a red herg to herring to suggest that a potential small business bill and sthoom are incorporated in this tax extenders bill that's now pending before the senate and that we will vote on shortly with respect to cloture, and that is my point here today, madam president.

7:06:19 to 7:06:39( Edit History Discussion )

Olympia Snowe: because when we do, if and when we do consider a small business jobs relief package and we provide the billions of dollars that are necessary to jump-start our economy through small businesses with tax relief, at the same time we're imposing additional taxes on small

7:06:40 to 7:07:01( Edit History Discussion )

Olympia Snowe: businesses in this tax extenders package, that will not neutralize the it only makes it worse. so that would mean w some benefits; on the other hand, we take it away. and let us rember that increases that will -- those increases will be in addition to the tax increases in the small

7:07:02 to 7:07:24( Edit History Discussion )

Olympia Snowe: business flow on the income that are expected to increase from the current rate of 35% to the 39.6% as well as a tax on capital gains that's scheduled to rise from 15% to 25% at the end of this year. and astoundingly, the tax rate on dividends six months from now will rise from 15% to as high as

7:07:25 to 7:07:45( Edit History Discussion )

Olympia Snowe: 39.6%, which is a 264% increase. and that's not even taking into account some of the marginal tass effects such as the phaseout of itemized deductions that will raise the race even higher or raise the rates even higher. it

7:07:46 to 7:08:06( Edit History Discussion )

Olympia Snowe: medicare payroll taxes that was imposed on small business in the health care reform law. $210 billion of taxes. $210 billion worth of taxes that were inserted in the health conclude legislation that became law in december that imposes a

7:08:07 to 7:08:27( Edit History Discussion )

Olympia Snowe: payroll tax on small businesses. it also taxes unearned income and investments for the purposes of the medicare payroll tax that also will affect small businesses to the point that there will be a net increase of 67% on capital gains and small businesses just as a result of that legislation,

7:08:28 to 7:08:49( Edit History Discussion )

Olympia Snowe: madam president, that became law in december. so all the cumulative effects of these tax increases is going to have a pronounced effect on small businesses' ability to create jobs, let alone make investments, you know, in

7:08:50 to 7:09:13( Edit History Discussion )

Olympia Snowe: equipment that's so essential to expanding and to growing. and if you see here on this chart that i have on display that was issued by the national fed ration of independent businesses, the foremost organization that represents small sinesses in america and they issued this in may of 2010. and it's not surprising to see,

7:09:14 to 7:09:36( Edit History Discussion )

Olympia Snowe: you know, the trend that shows that small business optimism at an unprecedented low. and it's not surprising. you know, given the status of the economy today. in fact, there's virtually no economic growth occurring because we don't have a growth strategy. we have a tax strategy. we have a spending strategy.

7:09:37 to 7:09:57( Edit History Discussion )

Olympia Snowe: but we don't have a growth strategy. the administration doesn't have a growth strategy. congress doesn't have a growth strategy. and there's been no regard or deference to a growth strategy that ultimately would encourage small businesses or any size business in america today to take the risk to make those investments. because it's just too much

7:09:58 to 7:10:19( Edit History Discussion )

Olympia Snowe: uncertainty. in addition to all of the potential tax increases, you know, that will occur at the end of this year, not to mention those that have already occurred and the ones that are pending in this tax extder legislation that we will be voting on shortly with respect to cloturement in the tax extenders

7:10:20 to 7:10:42( Edit History Discussion )

Olympia Snowe: bill, we're imposing a $9 billion tax on small businesses and $13 billion of retroactive new taxes on global businesses, on companies that do busiss abroad, retroactive taxes as well. retroactive tax increases is a ba habit. it's a bad practice. it's bad policy,

7:10:43 to 7:11:05( Edit History Discussion )

Olympia Snowe: madam president. to reach back and now tell businesses, oh, by the way, we've changed our mind, let's reach back and tax you. and you might ask, well, how far back, because that's the question that i've asked. how far back do you tax? well, guess what?

7:11:06 to 7:11:29( Edit History Discussion )

Olympia Snowe: back to the first event that represents a tax -- you know, a capita gains event, as far back as it goes, because we've changed our mind. well, it's very difficult when you have to meet a bottom line

7:11:30 to 7:11:51( Edit History Discussion )

Olympia Snowe: which is an apploment to congress because we don't have to meet a bottom line, we don't have to balance our budgets, we don't have to worry about how much we tax or spend because we don't have to balce it out. but businesses do in a very challenging and fragile economy. but we're suggesting oh, by the way, let's have retroactive tax

7:11:52 to 7:12:15( Edit History Discussion )

Olympia Snowe: increases. well, that's regrettable, madam president, that we have to go that far with a total -- representing a total disregard for the effects it's going to have ultimately on the average, you know, person in america who's seeking to get a job and can't find one. because businesses aren't going

7:12:16 to 7:12:36( Edit History Discussion )

Olympia Snowe: to be hiring. they're virtually at a standstill. and rightfully so in their hesitancy and their reluctant because they don't know -- reluctance because they don't know what's coming next out of congress. and we don't even know, because a lot of these provisions were sort of dumped in there though

7:12:37 to 7:12:58( Edit History Discussion )

Olympia Snowe: we didn't have hearings. but by the way, we've changed our mind and we're going to reach back and tax you. maybe it's a year accident maybe it's two years -- maybe it's a year, maybe it's two years, whenever had you that first event that's taxable under this provision, we will reach back and we will tax you. and the tax offsets in this bill are worse than the lack of extension of the existing

7:12:59 to 7:13:20( Edit History Discussion )

Olympia Snowe: policies, and that's why the provisions in the bill are too high a price for any major business organization from the chamber to the nfib to business round-table, to support it in its current form. now, it didn't have to be this way, madam president. i certainly raid out a blueprint and -- i certainly laid out a blueprint and i want to be very clear about this.

7:13:21 to 7:13:42( Edit History Discussion )

Olympia Snowe: i laid out a blueprint of how we could concede to a consensus solution -- could proceed to a consensus solution to how we could pass a responsible tax extenders package. i pursued diligently, answered every call, met on this last issue, and came in good faith in an attem to extend the unemployment benefits that i

7:13:43 to 7:14:04( Edit History Discussion )

Olympia Snowe: think people rightfully deserve, and also to help with the reimbursement for doctors that, by the way, we've known has been a problem for more than a year. i know i stood on this floor last fall during the time we were considering the health care bill that was pending before the

7:14:05 to 7:14:26( Edit History Discussion )

Olympia Snowe: senate and after which $210 billion worth of medicare taxes were inserted in the health care bill, $210 billion that were a tax on small businesses, tax on small businesses. i said, if you're going to take that route, if that's the policy th you're going to embrace,

7:14:27 to 7:14:47( Edit History Discussion )

Olympia Snowe: then why not defer it and pay for the doctors' reimbursement to avert 291 -- to avert the 21% reduction? not why use it for that purposes? if you're going to raise the taxes, at least use the dollars for medicare, within the medicare system, knowing that

7:14:48 to 7:15:09( Edit History Discussion )

Olympia Snowe: this was a serious problem, knowing that we had a 21% reduction in doctors' reimbursement in the medicare program that was scheduled for january? we knew we had a problem, yet on one hand we raised taxes in medicare on small businesses and wesed it for other purposes,

7:15:10 to 7:15:34( Edit History Discussion )

Olympia Snowe: to expand other programs rather than targeting it for the very problem and issue that existed in the medicare program that we knew about. how practical is that? well, of course it isn't. and we knew we could have paid with that $210 billion, we could have slings reached and arrived at a permanent solution at least

7:15:35 to 7:15:57( Edit History Discussion )

Olympia Snowe: for 10 years on the doctors reimbursement. for ten years we would have had a decade solution rather than this ad hoc approach where we're reconsidering every six months or every year and putting the patients as well as the doctors, you know, through this cycle,

7:15:58 to 7:16:19( Edit History Discussion )

Olympia Snowe: this endless cycle thas almost become perpetual as to whether or not we're going to provide for this reimbursement or we're gog to allow the cuts to go forward. so it becomes this gamesmanship that unfortunately it's at expense, you know, of the medicare patients because they hear from their doctors, "we n't know what we' going to be able to do."

7:16:20 to 7:16:40( Edit History Discussion )

Olympia Snowe: we hear it from the providers of course that are challenged because the medicare rates are hardly reflective of the true costs of delivering that care. my state has the second-lowest rate in medicare reimbursements in the country. and so we know that doctors are dropping medicare patients. so it has a pernicious affect. so we could have taken care of

7:16:41 to 7:17:02( Edit History Discussion )

Olympia Snowe: it proactively. we shoprobeing a we could have fund add ten-year solution that we -- we could have funded a ten-year solution that was in the arena of $10 billion because we had another bill that said, let's do the doctors' fix b let's not pay for t it was in the

7:17:03 to 7:17:24( Edit History Discussion )

Olympia Snowe: approximately $200 billion. but that wasn't to be. but is certainly didn't have to be this way. so i've sought to balance the necessity by identifying tax offsets, by urging that the stimulus spending be reprogrammed so that these funds are spent in a timely manner, as was the intention when this body passed the stimulus bill.

7:17:25 to 7:17:46( Edit History Discussion )

Olympia Snowe: and so with respect to the unemployment benefits, i've long advocated these extensions. i thinke've a responsibility to pass descensions until the economy -- to pass extensions until we can demonstrate that the economy can create jobs. i know -- i understand and appreciate some of my colleagues who believe these extensions should be fully offset.

7:17:47 to 7:18:07( Edit History Discussion )

Olympia Snowe: i diswriews happen knob that -- i just don't happen to be in that category until we can turn this economy around and we can produce jobs, especially at this time of a high unemployment rate of 9.7% which has virtually been at a status quo, with minimal change. so the congress has to enact economic policy that fosters job creation, which we failed to do,

7:18:08 to 7:18:29( Edit History Discussion )

Olympia Snowe: as i've said, for the last six months. so i would not impede unemployment benefits by insisting that they are not emergency spending and should be fully paid for. i believe there is a majority that supports that policy. so i recommended, why not separate the unemployment benefits and move it along? why put people at risk who are unemployed? we could have done that.

7:18:30 to 7:18:50( Edit History Discussion )

Olympia Snowe: we could have separated this out several weeks ago, which i proposed and recommended. separated out the doctors' fix and pay for it, and actually we ended up doing that. that's exactly what we did two weeks later. we could have done the same with the unemployment benefits, separated it out and moved it

7:18:51 to 7:19:12( Edit History Discussion )

Olympia Snowe: along, assuming that, of course, that we have unanimous vote on the majority side for that. we could have done that, because i certainly would have supported that. it was important so people are kept in a state of turmoil wondering whether or not they're going to be able to additional benefits.

7:19:13 to 7:19:33( Edit History Discussion )

Olympia Snowe: i thought we should have decoupled it from the extenders package and address it as a separate matter rather than entangled in other muddled policies that have been swallowed in this legislative morass that's pending today. i've also stated state aid on medicaid. i've said that these funds this program should be offset by

7:19:34 to 7:19:54( Edit History Discussion )

Olympia Snowe: unobligated stimulus funds. in the stimulus bill, we provided for additional funding for medicaid. and had we known then what we know now, we could have provided an adisiciaan additional year because the stimulus shrews supposed to be

7:19:55 to 7:20:15( Edit History Discussion )

Olympia Snowe: timely -- the stimulus is supposed to be stimulusly, targeted, temporary. why not redirect for a more stimulate purpose and certainly doing for the medicaid program is highly stimulative, along with unemployment benefi benefits. it is the maximum stimulus you can provide in the economy today. so i said, let's redirect those stimulus funds and spend it on

7:20:16 to 7:20:38( Edit History Discussion )

Olympia Snowe: fmap. and in the substitute extenders package proposed last night, there was a breakthrough on that very issue. it became a consensus item for a brief, and shining moment until some on the other side objected to the overall package on some of the other issue that i will get to in a moment. i have had some serious concerns

7:20:39 to 7:21:00( Edit History Discussion )

Olympia Snowe: with some of the proposed effects in this small business legislation. and particularly when it comes to subexapt "s" corporations. -- subchapter "s" corporations. there is an indication that those new taxes would be removed because of the punitive affect

7:21:01 to 7:21:23( Edit History Discussion )

Olympia Snowe: it would have primarily on -- punitive effect it would have on primarily the small businesses. yet last night the tide turned once again and i was informed that they would in fact remain in the tax extenders legislation. now these revenue provisions that have never been the subject of hearings, have never really

7:21:24 to 7:21:44( Edit History Discussion )

Olympia Snowe: been seen by the public, and would significantly damage the business environment for businesses both large and small, just at a time we should be creating businesses, not curtailing them. this egregious provision known as subchapter "s" corpgs would

7:21:45 to 7:22:05( Edit History Discussion )

Olympia Snowe: harm millions of -- corporations would harm millions of small businesses. under section 13, a new burdensome payroll tax is imposed on "s" corporations on the dividend contributions paid to family members who are shareholders or partners and unbelievably on retained erchtion earnings in the

7:22:06 to 7:22:27( Edit History Discussion )

Olympia Snowe: business when description distributions are kept in the business for reinvestment. at a time of festering high unemployment, this is exactly the wrong prescription for job creation. the provision is aimed, as i've been told, at the specific abuse of the "s" corporation in a partnership, which allows a

7:22:28 to 7:22:49( Edit History Discussion )

Olympia Snowe: business owner to inappropriately divert more money that is justified to no nonsalary distributions that are not subject to payroll taxes. unfortunately, in order to prevent the specific abuse, the office had to write a very expansive antiabuse provision causing collateral damage for

7:22:50 to 7:23:11( Edit History Discussion )

Olympia Snowe: taxpayers who are not abusing the system. this is a job killer because retained earnings are the most reliable form of capital available to small businesses. and while there had been clear abuses of existing law regarding reasonable compensation, it should be noted that the i.r.s.

7:23:12 to 7:23:32( Edit History Discussion )

Olympia Snowe: successfully prosecutes cases where business owners inappropriately divert salary income to dividend distributions. in fact a ruling as recent as may 27 of this year in watt sons v. the united states proves that the reasonable compensation standard can be workable yet is in the a clear

7:23:33 to 7:23:53( Edit History Discussion )

Olympia Snowe: bright-line test that is either easy for the i.r.s. to enforce or for taxpayers to understand muc.that's why i worked with my staff to find a way to address this abuse and agreed if we could find a way to improve upon and make clear the reasonable compensation standard, we should do so. and in fact my staff last week

7:23:54 to 7:24:15( Edit History Discussion )

Olympia Snowe: was atoint tax to do just that, and then i was informed that the subchapter "s" provisions would be remov in its entirety from the tax extenders bill so we didn't move -- we didn't proceed any further because i was told that they were not going to be in this legislation. and obviously that all changed

7:24:16 to 7:24:37( Edit History Discussion )

Olympia Snowe: last night when it was summarily reinstated. unfortunately, the new stheem would be created in this legislation, madam president, is less effective f either the compliance by taxpayers or the enforcement by the i.r.s. it is the current reasonable compensation staard. when i said one week when i was offered to remove in provision

7:24:38 to 7:24:58( Edit History Discussion )

Olympia Snowe: from the bill, i accepted this from the majority leader. unfortunately, negotiations must not have been as clear because last night that offer to drop that provision, as i indicated, was fully reunderstand ised. the provision in s. 4213 replaces 20 years of law with

7:24:59 to 7:25:21( Edit History Discussion )

Olympia Snowe: wholly unteste expensive, very difficult to administer new standards that attempt to address situations that under current law and practices already not permitted. specifically, this provision would impose medicare and social security taxes at a rate of

7:25:22 to 7:25:43( Edit History Discussion )

Olympia Snowe: 15.3% on the first $106,800 of dividends and wages as well as 2.9% of amounts retained in the business even when distributions are kept in the business for reinvestment retained erchtion are the most reliable form of capital for small business because the owner does not need too to a tbieng apply for a loan or to seek ann fusion of equity.

7:25:44 to 7:26:04( Edit History Discussion )

Olympia Snowe: this tax would appreciably reduce that capital at a time when other sources remain exsidingly difficult to access. -- exceedingly difficult to access. a a time of high unemployment, this is exactly the wrong direction for job creation. in fact, this new levy would kill jobs and discourage hiring. i commend the authors of the

7:26:05 to 7:26:26( Edit History Discussion )

Olympia Snowe: bill for attempting to rein in the game flag can take place. this bill is extraordinarily more broad in addressing just that problem. unfortunately, in their critique of my efforts to address these problems, neither "the washington post" nor "the new york times" editorial pages have taken into account anything but a pithy one-line description of

7:26:27 to 7:26:48( Edit History Discussion )

Olympia Snowe: the effects of these provisions. it is uflt because this new tax on small businesses and medium-sized businesses is a broad-side attack on the engine of this economy. the substitute that's pending before the senate would create vague new terms and tests the i.r.s. interpretation and tsm

7:26:49 to 7:27:09( Edit History Discussion )

Olympia Snowe: confusion as to whroaj payroll taxes are owed. these new terms would replace the reasonable compensation standard for a list of specific service-based businesses. the new test would impose payroll taxes on certain service businesses if 80% of the income of the business atributable

7:27:10 to 7:27:30( Edit History Discussion )

Olympia Snowe: to three or fewer shareholders of the firm. while these terms are less onerous than an earlier verlings, each of these new terms will be subject to i.r.s. rulings and inevitable litigation. i'd like to start outlining my concerns with the attributable to share 40erds concept.

7:27:31 to 7:27:52( Edit History Discussion )

Olympia Snowe: this is no easier to enforce than is the current reasonable compensation standard. does atribilitiable mean if a law firm partner brings another partner or asort to meet with a client that the income generated from that client is atributable three ways? or does it depend on who performs the most billable hours? if the associate performs the

7:27:53 to 7:28:14( Edit History Discussion )

Olympia Snowe: majority of billable hours with only signoff from the partner, to whom is the income attributable? this new proposed standard is no clearer than the current reasonable compensation standard that is also very depend on specific fact and circumstances. why would we replac one standard with something no more

7:28:15 to 7:28:35( Edit History Discussion )

Olympia Snowe: enforceable by the i.r.s. and becomes a trap for taxpayers? another component of the bill that is no clearer than reasonable compensation is a test of substantially all of the activities of the firm. two issues will arise with respect to this phrase. first, this is clearly not an objective revenue test. it is a subjective activity test

7:28:36 to 7:28:56( Edit History Discussion )

Olympia Snowe: meaning that these employers would now be required to keep time sheets of all their employees even if a firm or profession does not currently track billable hours. this would create a whole new expensive paperwork morass other than compliance with mindless tax rules.

7:28:57 to 7:29:17( Edit History Discussion )

Olympia Snowe: further, this substantially all meanwho are than half, three-furthers or 90% of activities is not defined in the atute. we simply do not know the definition of "substantially all." neither would the i.r.s. neither would the business owners. this does not advance compliance or enforcement to a level any

7:29:18 to 7:29:39( Edit History Discussion )

Olympia Snowe: better than existing reasonable compensation standards. turning to the additional provisions i want to point out that the list of professional service businesses in the legislation is at best obtuse and it is a quagmire for litigation. this tax includes services in

7:29:40 to 7:30:00( Edit History Discussion )

Olympia Snowe: the field of health, law, lobbying, engineering, architecture, accounting, actuarial science, pfling arts, consulting, athletparticulars, broker services. while it is sometimes clear which businesses are included, for other businesses and professionals proceedings, the new definition is not so clear cut.

7:30:01 to 7:30:22( Edit History Discussion )

Olympia Snowe: we can only assume that with this expansive regulatory authority granted in this bill, that other service providers would be ensnared. years -l regulatory effort and litigation would eventually sort out whether the following would be subject to this provision: web designers who are not

7:30:23 to 7:30:44( Edit History Discussion )

Olympia Snowe: software engeers, interior designers who are not architects, tax preparers who are not accountants, real estate or insurance agents who are not brokers, writers who are not performers, pwaou teugss who are -- beauticians who are not in health. there are other service providers who would be ensnared the next time congress is

7:30:45 to 7:31:05( Edit History Discussion )

Olympia Snowe: seeking additional revenues, includingluers, electricians, hairdressers, construction contractors, heating oil distribute tors, car mechanics, recruiting and staffing firms and professional fund-raiserrers to name a few. every day we seem to have fou

7:31:06 to 7:31:27( Edit History Discussion )

Olympia Snowe: another unintended consequence of the provision. five days from now, we're likely to have found five more unintended consequences. i want to raise specifically two additional unintended consequences that have been brought to my attention, madam president. the first of these, which my colleagues might be unaware is that this provision would reduce the social security benefits

7:31:28 to 7:31:49( Edit History Discussion )

Olympia Snowe: with early retirees who invest in a family member's business. this issue was raised by the american institute of certified public accountants and results because a shareholder would be deemed to have had additional wages through the proposals family attribution rules which then reduces social security early retirement benefits. i am disappointed that the sponsors of the provision have

7:31:50 to 7:32:11( Edit History Discussion )

Olympia Snowe: not addressed this problem despite having known about it for at least two iterations of that you are bill. madam president, if a parent invests in a shareholder of a business being set up by their ult child, this legislation would count the diffident stkreubs -- dividend distribution as earned income.

7:32:12 to 7:32:33( Edit History Discussion )

Olympia Snowe: this tax would be a shock to invests who had no idea about this complication or invariably to the extent that it's known, it would reduce investments by family members in entrepreneurial businesses. of course this would reduce a critical form of capital for start-up businesses. why does the majority feel the need to starve young

7:32:34 to 7:32:55( Edit History Discussion )

Olympia Snowe: entrepreneurs the ability to get start-up capital from their stpharpbts a second specific -- parents? a second involves a complex web of antiabuse rules from the s-corporation shareholders provision. the bill imposes payroll taxes on limited partnership income of

7:32:56 to 7:33:16( Edit History Discussion )

Olympia Snowe: employees for whom this limited partnership shares a like and employees stock purchase plan. employees are not subject to payroll taxes on stock purchase plan distributions. further limited partners are not subject to payroll taxes because this is investment income. but to combine the two and for

7:33:17 to 7:33:37( Edit History Discussion )

Olympia Snowe: some reason to impose a 15.3% payroll tax on the development middle-income employees is inexplicable. despite thi known problem, it was not addressed even in the version of the bill that was released last night and pending before the senate. i want to be clearly understood, madam president, that this ovision was publicly released

7:33:38 to 7:33:58( Edit History Discussion )

Olympia Snowe: on may 20 and was adopted by the other body on may 28, with virtually no debate on an $11 billion tax hike. there have been no hearings on this proposal in either the house or the senate. and while the chairman has modified his initial proposal and filed a $9 billion tax action significant concerns

7:33:59 to 7:34:19( Edit History Discussion )

Olympia Snowe: main. notably the number of groups that are noting my amendment to letter to both the chairman of the committee and the ranking member about that earlier version emphasizing that this new tax is an excellent example of what happens when the legislative process is short circuited. this chart here is an illustration of the number of

7:34:20 to 7:34:40( Edit History Discussion )

Olympia Snowe: organizations that have written letters to chairman baucus and ranking member grassley of the senate finance committee about how this legislation, it says new taxes would hur job creation, will reduce the capital these employers have to create jobs and invest in their businesses. an excellent example of what

7:34:41 to 7:35:03( Edit History Discussion )

Olympia Snowe: would happen when you short circuit the legislative process. that's exactly the result. it's ill-timed, it's poorly targeted. i appreciate the support from senators who join me in offering an amendment. unfortunately, we haven't had the ability to offer and to strike this in its entirety so we could take a step back and address it. only the abusive situations

7:35:04 to 7:35:25( Edit History Discussion )

Olympia Snowe: without capturing everybody else that's going to affect job creation and small businesses and entrepreneurs in america at a time when we desperately nee them. so we are now making a broadside attack on job generators. regrettably, this wil affect small- and businesses.

7:35:26 to 7:35:46( Edit History Discussion )

Olympia Snowe: they are not in a business to shoulder this enormous burden as we look to them to create the jobs that we require. i've been asking on months on end, as i said earlier in my statement, for small business tax relief and jobs package. so central to what we require in our economy today because of virtually no economic growth, no

7:35:47 to 7:36:09( Edit History Discussion )

Olympia Snowe: job creation. and we're into july; so six months into this legislative calendar, and no legislative package on small businesses is virtually insight. and yet what are we doing? more taxes and more spending, which is what this is representative of, a tax extenders bill. i attempted to reach over the

7:36:10 to 7:36:30( Edit History Discussion )

Olympia Snowe: last few weeks, to reach a consensus and a solution. removing the doctors fix, and paying for it, to rove the -- to move to unemployment benefits, move that along so people could get their unemployment benefits without having them lapse and expire during this challenging economy. and then of course address all

7:36:31 to 7:36:51( Edit History Discussion )

Olympia Snowe: the other issues, to make sure we're getting it right, madam president. that's what it's all about. it's a matter of practicality and reasonableness that we get it right and not force more taxes on the very entity that we depend on to create the jobs that people deserve in america today to go back to work and to support their foundation of

7:36:52 to 7:37:12( Edit History Discussion )

Olympia Snowe: financial security rather than removing it. so at a time when we should be encoaging and nurturing small businesses, we are stifling the entrepreneurial spirit by adding $9 billion more in taxes with an ill-conceived provision that has had no hearings, no examination, no evaluation and it's a

7:37:13 to 7:37:34( Edit History Discussion )

Olympia Snowe: terrifying template for additional taxes on small businesses when they're already facing more taxes as a result of health care. and no wonder small businesses are bewildered and unwling to hire new employees. in the final analysis, america's small businesses would benefit greatly with the extension of tax provisions, but they don't

7:37:35 to 7:37:58( Edit History Discussion )

Olympia Snowe: want this bill at any cost, not when they're going to have to be paying some very onerous and punitive taxes under this legislation, madam president, because virtually it's going to be all small businesses that are going to face and bear the brunt of the consequences of this legislation and the taxes that it represents. so it's going to continue the stagnation with respect toob creation.

7:37:59 to 7:38:19( Edit History Discussion )

Olympia Snowe: it's going to further that and the deteriorating trend within our economy with respect to job creation and with the lagging economic growth that is reflecting in today's economic environment. so, madam president, for all those reasons, i will not be voting for cloture in the tax extenders package.

7:38:20 to 7:38:43( Edit History Discussion )

Olympia Snowe: i regret it because i thought that we had reached a consensus, but obviously that wasn't to be. and hopefully we can continue our discussions at a time at which we can reach a consensus. but i think it's important in the final analysis to state the fact that these impasses and the stalemate and the deadlock that

7:38:44 to 7:39:05( Edit History Discussion )

Olympia Snowe: result time and again that require cloture votes are really are not necessary. i think if we're willing to listen to one another and to reach across the political aisle and to build a consensus on the issues that are so important to america and so crucial to turning and reversing the economic direction of our

7:39:06 to 7:39:20( Edit History Discussion )

Olympia Snowe: couny, when more than 70% of the american people believe america is moving in the wrong direction with respect to the economy, and yet we have failed to address it satisfactorily because we're not willing to listen, we're not willing to work and we're not willing to do the things that are necessary to