[Congressional Record Volume 163, Number 158 (Tuesday, October 3, 2017)]
[Senate]
[Pages S6272-S6273]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               Tax Reform

  Mr. THUNE. Mr. President, a recent survey reported that 50 percent of 
people in this country consider themselves living paycheck to paycheck, 
and one third of these people say they are just $400 away from 
financial crisis. That is not acceptable.
  Unfortunately, after 8 years of economic stagnation under the Obama 
administration, living paycheck to paycheck is starting to feel like 
the new normal for most Americans. But it doesn't have to be. We have 
the resources to be the strongest economy in the world. American 
workers and job creators are as dynamic and creative as ever, and they 
can get our economy thriving again. In order to get them to do that, we 
need to clear some obstacles in their path. That starts with reforming 
our complicated and outdated Tax Code, which has increasingly been 
strangling our economy.
  This month, Republicans in the House and Senate are making 
comprehensive tax reform one of our top priorities. After weeks of 
work, last week leaders from the Senate, the House, and the White House 
unveiled the framework that will guide our final tax reform 
legislation.
  The framework is built around Republicans' five principles for tax 
reform: first, providing tax relief for the middle class; second, 
increasing wages, jobs, and economic growth; third, keeping good-paying 
jobs here at home in America; fourth, increasing American 
competitiveness in the global economy; and, finally, fifth, simplifying 
the Tax Code. The framework outlines our plans to provide relief for 
middle-class families.
  First, we will lower rates for hard-working Americans. By collapsing 
the seven income tax brackets to three, we will ensure that working 
families get

[[Page S6273]]

to keep more of what they earn. Our plan will also expand the child tax 
credit and make it available to more families, and our plan doubles the 
standard deduction, which will provide significant relief for those who 
need it the most. Under our plan, a family making $24,000 a year will 
no longer owe any Federal income taxes. All of these measures will 
provide direct relief to working families.
  Just as important for families, however, is the other half of our tax 
reform plan, which involves creating the kind of economic environment 
where hard-working Americans can thrive--the kind of environment where 
Americans have access to good jobs, higher wages, and more 
opportunities.
  Over the past few weeks, I have come to the floor to talk about 
Republicans' tax reform principles and have highlighted some of the 
ways our tax reform plan will improve the economic outlook for American 
families. Last week, I talked about our third principle, reforming our 
Tax Code to keep those good-paying jobs here at home. This week I would 
like to spend a few minutes talking about our fourth principle, which 
is keeping American businesses competitive in the global economy.
  In order for individual Americans to thrive economically, we need our 
businesses to thrive. Thriving businesses create jobs, provide 
opportunities, and they increase wages and invest in workers. Right 
now, though, our Tax Code is not helping businesses thrive, and it is 
making it more difficult for American businesses with an international 
footprint to compete in the global economy.
  Our Nation has the highest corporate tax rate in the industrialized 
world--at least 10 percentage points higher than the majority of our 
international competitors. It doesn't take an economist to realize that 
high tax rates leave businesses with less money to invest, less money 
to spend on wages, less money to create new jobs, less money to devote 
to research and development of new products and services, and less 
money to put back into new property or equipment for those businesses. 
This situation is compounded when an American business has 
international competitors that are paying a lot less in taxes than you 
are. It is no surprise that U.S. businesses struggling to stay 
competitive in the global economy don't have a lot of resources to 
devote to creating new jobs and increasing wages.
  On top of our high business tax rates, there is another major problem 
with our Tax Code that puts American businesses at a competitive 
disadvantage globally--our outdated worldwide tax system.
  What does it mean to have a worldwide tax system? It means that 
American companies pay U.S. taxes on the profit they make here at home, 
as well as on part of the profits they make abroad once they bring that 
money back home to the United States. The problem with this is that 
most other major world economies have shifted from a worldwide tax 
system to a territorial tax system.
  In a territorial tax system, taxes are paid on the money earned where 
it is made and only there. You are not taxed again when you bring money 
back to your home country. Most American companies' foreign competitors 
have been operating under a territorial tax system for years. So they 
pay a lot less taxes on the money they make abroad than American 
companies pay. That leaves American companies at a disadvantage.
  Foreign companies can underbid American companies for new business 
simply because they don't have to add as much in taxes into the price 
of their products or services. When foreign companies beat out American 
companies for new business, it is not just American companies that 
suffer. It is American workers. That is why a key part of the tax 
framework that Republicans unveiled last week involves lowering our 
massive corporate tax rate and transitioning our tax system from a 
worldwide tax system into a territorial tax system. By making American 
businesses more competitive in the global economy, we can improve the 
playing field for American workers.

  There are a lot of other things we are going to do to help hard-
working families and American workers, from improving the tax situation 
for small businesses to helping family business owners, farmers, and 
ranchers like those in my home State of South Dakota by repealing the 
death tax.
  Our colleagues on the other side of the aisle like to complain about 
our plans to repeal the death tax. They complain that it is not 
something to really worry about since they claim relatively few estates 
are expected to actually have to pay the tax. Well, I would like them 
to come and talk to some of the farmers and ranchers in my State of 
South Dakota. Some of these farmers and ranchers are paying tens of 
thousands of dollars a year in an effort to avoid having their families 
hit by the estate tax when they die. Why? Because they know that 
without careful and costly planning, if the Federal Government comes 
around after their death demanding a staggering 40 percent of their 
estate, their children won't have the money to pay the government 
without risking the farm or the ranch.
  Farming and ranching is a land-rich but cash-poor business. Farmers 
and ranchers own valuable land, but they are only earning cash on the 
crops they grow or the livestock they raise on that land. So while 
their overall farm or ranch may have a substantial value, the amount of 
money they have coming in is relatively small and subject to the swings 
in the market from year to year. Too often, when farmers and ranchers 
die, the vast portion of their estate is made up of their land, while 
actual disposable income is a very small part of it. If they don't take 
measures to avoid having their family hit by the death tax, the family 
will have no choice but to sell off some or all of their land to pay 
the government, which means, in many cases, losing the family's farm or 
ranch. And the same situation faces other types of family-owned 
businesses across the country where the value of the estate is tied up 
in that business.
  Removing the threat of the death tax for family-owned businesses, 
farms, and ranches would free up resources that these business owners 
could invest in their businesses and in our economy instead of on 
complex estate plans, insurance, and expensive tax professionals.
  Before I move on, let me just remind everybody that when we talk 
about the death tax, we are talking about double and sometimes triple 
taxation. The money the government is taxing has already been taxed at 
least once. It boggles the mind that some think that a person's death 
is justification for taxing his or her income a second or a third time. 
Death should not be a taxable event. When someone dies, they shouldn't 
have to see the undertaker and the IRS at the same time.
  Our Tax Code is increasingly strangling our economy and placing heavy 
burdens on hard-working American families. If we want to improve the 
economic situation of American families, comprehensive tax reform is 
essential.
  Republicans in the House and the Senate are continuing to work on the 
final draft of the bill that we will take up later this fall. I look 
forward to passing comprehensive tax reform that will help American 
families thrive, that will create greater economic growth, better 
paying jobs, higher wages, and bigger paychecks for American workers.
  Mr. President, I yield the floor.

                          ____________________