[Congressional Record Volume 163, Number 159 (Wednesday, October 4, 2017)]
[Senate]
[Pages S6308-S6313]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
Tax Reform
Mr. BLUNT. Mr. President, I am not aware of any Missouri
constituents, for whom I work, who wouldn't like to see a tax code that
was simpler, fairer, that did more to create jobs, that was better for
individuals, and one that they understood. I don't have anybody come up
to me and say: What can we do to complicate the Tax Code further, or
what can we do to make us less competitive, or how much more of my
money would you like to have to do what you think the government ought
to do? I don't have anybody say that to me.
We are now at a time when we have the tools available. We have the
focus available that will allow us to move in the right direction. For
almost a decade now, hard-working families and hard-working individuals
have had to deal with a below-average economy and with below-average
wage growth in that below-average economy. Surely, we don't want that
to be the new normal.
I kept hearing the last 3 or 4 years that 2 percent growth is what we
should expect now. The growth since World War II has averaged 3.4
percent for over 70 years. Suddenly, we were told: No, 2 percent is the
best we can do.
I understand that, even counting the Great Depression, growth in the
entire 20th century was over 3 percent. What do we need to do to get
our economy growing in a way that creates better opportunities and
better jobs?
Why would it create better jobs? Because you have people who are
looking for workers who are more eager to pay and keep a workforce in a
growing economy than you do in an economy that is not growing. You have
people who understand they can compete better if they have a workforce
that is the workforce they want rather than the workforce they just
happen to get and that there is competition for that workforce. So our
goal here in tax reduction and tax reform should be to help families
and individuals keep more of their hard-earned money, to empower people
to invest in their own
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future in ways that we currently are not encouraging or just simply not
allowing because we don't let them take enough of their money home from
work that they make at work, and to make it easier for families to see
a pathway toward success and not to penalize people when they make the
right decisions.
The tradition has always been this: If you want more of something,
you don't tax it. You don't regulate it. You encourage it.
We need a tax code that encourages more success, that encourages
higher take-home pay and better jobs. Most people don't realize that
the individual income tax is still the biggest source of Federal money.
More than half of all Federal taxes collected come from the income tax.
One of our goals should be how do we get more taxpayers and not how
do we make more from the taxpayers we have. Perhaps the greatest
voluntary compliance in the history of the world is how Americans have
complied with the income tax system.
The more Americans think the system is fair and understandable and
everybody else is being treated the same way they are being treated,
they are much more likely to comply with that system than a system
where they hear: Well, some company made a lot of profit, but because
of the complexity of the Tax Code, they paid zero taxes, or this
neighbor has figured out that and that neighbor has figured out that,
and because of the Tax Code, you work just as hard as they did, but the
Federal Government somehow got a lot of your money because you hadn't
set up your tax planning in the right way.
Tax planning doesn't need to be that difficult. Right now the Tax
Code has seven individual rates. We are proposing three individual
rates, which maybe could go to four, but that would still be barely
half the number we have, even if it got to four. There are seven
individual rates, and there are more than 100 deductions, credits, and
exclusions that people use when they fill out their tax form. American
people collectively pay billions and billions of dollars just to figure
out how much of their money the Federal Government is going to get.
Most people would like to have the certainty of a postcard form that
you fill out, but instead they see this system that has gotten
increasingly complex, often not indexed for inflation. So you start
with something that you think is only going to apply to a few people,
and, before you know it, it applies to a whole lot of people.
I think that when the alternative minimum tax was added to the Tax
Code, there had been 155 wealthy individuals who hadn't paid any income
tax. So the Federal Government decided, and Congress decided, that we
are going to put the alternative minimal tax in to be sure those 155
people, who are clearly wealthy people, are going to pay income tax. No
matter how much they have gamed the tax system, they are still going to
pay an alternative minimum tax. This was just a few years ago.
By 2015, the 155 had gone to 4.4 million people who paid the
alternative minimum tax. It is unbelievably successful if you are
trying to collect people's money in a way they don't understand. It is
not very successful if all you were trying to do was to prevent 155
wealthy people a couple of decades ago from being able to not pay any
tax at all. They took a shot at 155 people and wound up hitting 5
million.
That is unacceptable. That is not what the Tax Code is supposed to
do. We need to work hard to simplify that. There are 14 pages of
instructions that tell you or, more likely, your tax preparer how to
comply with the alternative minimum tax guidelines.
I don't have the one page with me, but I was handed the one page of
instructions for the Tax Code from 1913. By the way, the estimate was
that not only not many people would pay it, but nobody would ever pay
it because you didn't pay anything unless you made at least $3,000,
which in 1913 was a lot of money. But it was one page of instructions.
Now we have 1 page of index to the 100 pages of instructions, and 14 of
those pages are just for the alternative minimum tax. When you fill the
form out, there are 64 different lines that you use to calculate now
how almost 5 million people are impacted by a part of the Tax Code that
was designed for 155 people.
We can do a better job. We can do a better job of being sure that
hard-working families get to take home more of the money they have
earned with that hard work. We can also do a better job with the rest
of the Tax Code to make sure we are creating the kind of opportunity
for us to compete as a country, for us to compete as a nation, for us
to be more fairly aligned with the other countries in the world that we
compete with, and to make sure those hard-working families have better
jobs with more take-home pay to start with.
If you are working hard for a living--and Americans do; we are a
working country--the best of all circumstances is that you have a
better job than you used to have and less money comes out of every
dollar you make than used to come out of every dollar you make, and
that needs to be our goal. Whatever we do on the individual side needs
to be focused on that. Whatever we do on the job-creating side needs to
be focused on that. If we do that, we will not have the people we work
for come in complaining: What have you done? The Tax Code is too simple
now. It is too easy to fill out my tax form. I am walking out on Friday
with more money than I used to walk away with, and, oh, by the way,
they tell me there is a better job about to develop that I can apply
for.
That is what we ought to do. I hope we keep focused on that and get
this tax bill passed this year.
I think the Senator from Georgia has come to talk about this same
topic, along with Senator Barrasso from Wyoming.
I yield the floor.
The PRESIDING OFFICER. The Senator from Georgia.
Mr. ISAKSON. Mr. President, I thank the Senator from Missouri. I make
the point that I have enjoyed the last 19 years serving with him in the
Congress of the United States. He was elected 2 years before me to the
House of Representatives. I came a little bit later, but I preceded him
in the Senate in 2004. He has been great to work with.
The Show Me State of Missouri is an awful lot like my State of
Georgia. They are proud of their country. They are proud to be
Americans. They are proud of the chance to have an opportunity to make
an honest living and want to be a part of a country that continues to
grow and have prosperity for the future.
We had a hearing in the Finance Committee yesterday where there was
an interesting study I had not seen before. It had been done by a
Harvard student, who I assume was correct. Ninety percent of the people
born in the 1940s ended up making more than their parents did when they
went to work. But only about 40 percent of the people born in the 1980s
will end up making more than their parents did, meaning that as we have
gone along the way since World War II, we have taken more and more away
from the opportunity in the earning level and more money has gone to
different places, like taxation.
Personally, I think the Finance Committee and the leadership of the
Big 6, so to speak, have done us a great favor to open the debate on
tax reform in America. Unlike some of the debates we have had recently,
this debate is open-ended. We are starting with a framework, not an
absolute dictate but a framework. We are talking about an opportunity
we have to see if we can lower the burden of taxes on the American
people, while incentivizing the American people to work more, to make
more, and to earn more.
There are two ways to increase revenue to the government. First, you
can increase the rate of taxation. But then you are not necessarily
taking in any more money. You might incentivize somebody to go
somewhere else. The other way is to improve the opportunity to make
money and the atmosphere in which people make money so they invest
their time and effort and they grow their revenue, which grows the
revenue of the United States of America.
The proposal in the framework before us has any number of outlines
and any number of targets. The four things I want to focus on are
these. One is the middle class. I have gotten tired of hearing this
reference to dividing us as Americans by class. We are all Americans.
Regardless of our station in life, we are all important. The code ought
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to be important to every single person who is an American and, if they
can come to this country, to improve their life, raise their children,
and live a good life.
I am not into a class society. I am into an opportunity society. If
you take a look at this proposal, for those people you put in the
middle class today, it proposes lower rates, less brackets, and more
opportunity to gain wealth in the future through work, through
investment, and through earnings.
Second, this framework encourages job creation. I know that people
are always demonizing the rich. Most people who are rich are people
providing people who aren't rich with jobs. I don't think it is bad to
provide people with jobs. I think it is good to provide them with jobs.
We need a Tax Code that incentivizes the creation of jobs.
The focus on the passthrough rate, which is talked about by the Big
6, may lower the passthrough rate to 25 percent. It is a job-creating
proposal that works.
I have run a sub-S corporation. I have been a partner in limited
partnerships. I have known people who have had sole proprietorships. I
have known people who have had independent operations. They all pay
their taxes at the regular, ordinary tax rate on the individual. They
don't pay at the corporate rate. They pay at what is called the
passthrough rate, where the profits at the end of the year of the
partnership or the LLC or the sub-S corporation flow in a K-1 to the
individual and are taxed at the ordinary income tax rate; whereas,
corporations in C-corps, or stock-held companies, pay a top rate of 35
percent.
That rate is being proposed to go to 25 percent conceptually. If that
goes to 20 percent and the 25 percent rate is applied to passthroughs,
we will have a good environment in which companies can form
investments, form new companies, make investments of those companies,
build opportunity, and, in turn, build jobs. So it motivates America to
create more jobs. With jobs come income. With income comes money. With
money comes investment. At the end of that comes profit, which ends up
being taxed, which is revenue to our country, and it increases.
We also need to recognize that we are not as competitive as we used
to be, in large measure because of the code we have, not because we are
not competitive people. America is the most competitive environment in
the world in which to do business. Americans by themselves were
explorers to get here. Americans by themselves are investors and
inventors. Americans by themselves are risk-takers. We want to improve
in every competitive opportunity we have, but the current code we have
suppresses competitiveness.
This proposal by the Big 6 takes us to a territorial tax system. We
are one of the few countries in the world that taxes the old-fashioned
way. The territorial system is the way in which most of the world
competes, and we are the biggest competitor within the rest of the
world. It is time we put an end to a company making a dollar in Delhi,
India, on a product they made there and sold there, pays the Indian
tax, and then brings it back into America and has to pay the
differential on the American tax as well. It is time we did what the
territorial tax does, which is to tax the money where it is earned;
therefore, you will never have to do repatriation again, and you will
never have to talk about offshore tax havens again because the Tax Code
will not induce those things to happen. Instead, people will pay the
tax where it is earned, bring the money back here to hire people,
invest, build new products, and then take them overseas and sell them.
There is nothing more important than going to the territorial tax
system. I am excited about this.
Have you ever thought about this?
If you were the president of a major American corporation and it was
coming to the end of the year and you were getting ready to have your
stockholders' meeting for the year and you were looking at ways to show
how the stock could grow and how, next year, you were going to improve
the profits of the company and, in turn, the net of the company and, in
turn, the dividends to the stockholders--right now, if you have a home
office in America, that is your principal office, and you are taxed at
35 percent in America. If you have a competitive company that is in
Ireland and it is taxed at 12\1/2\, it just might cross your mind: If I
move my headquarters from America to Ireland, I could take my
stockholders and put 18 percent or 20 percent--or whatever the
differential is--on the bottom line for them. When your Tax Code causes
people to think about things like that, you are predicting a future for
a country that is not as bright, as rich, or as important as it should
be.
Lastly, everybody thinks I am a city slicker because I am from
Atlanta, but I did grow up working on a farm in Fitzgerald, GA, and
Ocilla, GA. I love farmers and I love farms. I know one of the
proposals of the Big 6 is to do away with the remainder of the estate
tax that is still with us. A few years ago, we exempted all estates at
$5 million or less from the estate tax. Now it is $5.49 million because
the index has been used on inflation. The tax rate used to be 55
percent, and it is now 40. Yet, in my State of Georgia, with the
effective application of the income tax, the tax is about 46 percent.
So, for round figures and argumentative figures, for someone who dies
in our State, after the first $5 million, he pays a tax closer to 50
percent.
A lot of people say that is rich people taking a benefit of the Tax
Code. I don't call being dead in order to collect a tax benefit a good
idea. I do not think that that is a benefit to me at all because the
estate tax is on somebody's estate who passes away, who pays that tax
for the people who would inherit the assets. Those are normally the
children or the spouses or maybe the employees with whom they work in
their companies.
Have you ever thought about this?
If somebody were taxing you at 50 percent or close thereto and you
file your first estate tax return after you are dead, then if this were
the value of your estate, you would be telling the government: OK, you
get this half, while my children, my wife, my family get the other
half. A year later, when you go back to the well--or a generation
later--those kids who inherited the business will have to go back and
pay taxes, and a quarter of it will be gone. So, in two generations,
you took an asset that was worth a lot and reduced it to 25 percent of
what it was worth. You are incentivizing people to liquidate something
that was paying taxes on an ongoing basis and pay a onetime exit in
terms of an estate tax. That is backward thinking.
What we should do is take those things people have worked for and
striven for and tried their best to build and have an incentive for
them to take that and leave it to their heirs and leave that company in
a tax-paying mode or that farm in a tax-paying mode so America benefits
and they benefit as well. Just because you are not taxing something
does not mean you are not taking advantage of your company or the
benefit of that item. By abolishing the estate tax, you will actually
put more money, over time, in the Treasury of the United States of
America in taxes than you ever will by taxing the one-time 50 percent.
So as we enter this debate--and I have been joined on the floor by a
number of my colleagues who, I know, want to talk--let's talk about
what benefits the American people, what incentivizes innovation and
competition, what puts more money in the pockets of middle-class
Americans today but also creates more people in the middle and upper
classes in the future, not because we gave them anything except an
opportunity, a fair place to compete, and that competitive drive that
only people in the United States of America have, possess, and will
always use to the benefit of our country.
I yield the floor.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. BARRASSO. Mr. President, it is always such a privilege to come to
the floor and hear Senator Isakson, of Georgia, speak, as he speaks so
eloquently. He comes here and makes perfect points. He was talking
about the tax system looking to the future. What we have is a tax
system that looks backward, regrettably. A number of years ago, we had
a Treasury Secretary named Bill Simon, who said: ``The Nation should
have a tax code that looks like someone designed it on purpose.'' That
is what we are trying to do now--have a Tax Code that looks like it was
designed on purpose.
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The person who really understood this was Ronald Reagan. As we take a
look at tax proposals, it is not about taxes; it is about much more--
about a better life for the American people. Ronald Reagan said that
tax reform is the door to a bigger future and, I would add, to a
brighter future. He said it was the door to a future as big and hopeful
and full of heart as the American dream. That is what we are talking
about here today, a bright, big future, as big and bright as the
American dream. That is what we are aiming at with this plan, a big and
hopeful future for all Americans.
It all starts with increasing the amount of money Americans get to
keep in their pockets as a result of their hard-earned paycheck
dollars. That is the most important thing. That is what families are
concerned about. That is what I hear about every weekend in Wyoming.
Under the outline the Republicans have proposed, every working man and
woman in this country will be better off. That is our goal, to make
everyone better off and to make the country better off, more
prosperous, with a strong, healthy economy. That is what we are hearing
about today on the floor and what we heard about from the Senator from
Georgia.
When we cut the amount of money people have to pay in taxes, it is
essentially like giving them a raise. That is what this is about,
giving people a raise. We want working people to keep more of their
hard-earned money. One of the ways you can do that, which is very
popular, is by doubling the standard deduction. It is easy math to do.
The current standard deduction is around $12,000 for a couple who files
jointly. The Republican proposal doubles it to $24,000. That means the
first $24,000 of a couple's income will not be taxed at all.
Beyond that, we are going to reduce the number of tax brackets.
People will like that. It is so complicated, the system we have now. We
will move people into lower brackets. Isn't that what we are trying to
do? Yes, it is. If you used to be in a bracket and paid 25 percent,
there is a pretty good chance that a significant amount of your income
is going to be moved down to the 12-percent range. For most people,
that is like getting a big raise when they take a look at their
paychecks at the end of the week. That is what Republican tax relief
looks like.
The second thing we want to do is to actually make it a lot simpler.
We talked about lowering the number of brackets, making it simpler for
everyone who does their taxes. The instructions you get now from the
IRS for the 1040 tax form are 106-pages long, and that is if you just
limit yourself to the instructions. Remember that there are 15
different worksheets to fill out just so you can fill out your 1040
form. When more people take the standard deduction, they can save a lot
of time and not have to go to the 15 worksheets and the 106 pages of
instructions. They get that standard deduction, which has now doubled,
making it a lot easier, with a lot less time having to be spent on
taxes.
What else are we going to do?
We want to cut out a lot of the loopholes and complicated rules so
most people will be able to just fill out a form on a single page.
Think of the hours that is going to save families--the millions and
millions of hours--when you multiply it across the country. Plus, think
of the stress people will not have to be living under in their
wondering if they actually followed the instructions properly. When you
call the IRS help line, you get different answers from different people
with whom you talk. It is hard to get a single answer because the
complicated system makes it hard to get the answer right. So you end up
with the expense of hiring lawyers, tax accountants, and people who can
help you navigate a complicated system.
People are looking for simpler lives, more free time, and more money
of their own they can keep, not complicated government forms so the
government takes more of their money. There is a lot of room for us to
improve the simplicity of the tax system and the actual challenges that
come from filling out the forms.
The third thing we want to do with the plan, of course, is to get the
economy growing faster so it is a strong and healthy economy, with more
prosperity and higher take-home pay in the paychecks. With that, you
will actually get an economy that creates more jobs and has more people
working, which is a big part of tax reform. It is a direct benefit for
American families. When you cut taxes on small businesses, they can
afford to hire more people or they can use the extra money to pay their
workers more. There is a lot that can be done to reach that level of
prosperity--in individual paychecks as well as in having more people in
the workforce.
Under the outline the Republicans released last week, the top rate
for most small businesses is going to drop from almost 40 percent down
to 25 percent, allowing the businesses to pass on those savings to
their customers and the savings to their employees. Larger businesses
are going to get a tax break too. The idea is to lower taxes for
everyone.
When you take a look at it from a business owner's standpoint, 70
percent of the cost of corporate taxes actually does not get paid by a
corporation; it gets paid by the people who work for those businesses.
If we cut taxes, more of that money is going to go to the workers. You
will have higher wages, better benefits, and more jobs, and businesses
will actually be able to lower their prices. Every time there is a tax
increase, a business has to raise the cost of a product to be able to
collect that tax and send it to the government. I would rather have
that money go into the pockets of the people who are shopping in the
store or using that business rather than into the pocket of the Federal
Government.
Senator Isakson was talking about something called repatriation and
the amount of money businesses are taxed that do some business
overseas. If we can cut the taxes they pay on the money they earn
overseas, it means those businesses can bring back that money to the
United States and spend it here. How much is it? Right now, about $2.6
trillion is sitting overseas because those businesses get taxed twice--
once on the business done overseas and then once on the business done
when they bring those profits back to the United States. When we get
that money back, that is going to help grow the economy here as well.
It makes sure the American Tax Code ought to be helping American
businesses and the American economy, not helping foreign countries. We
need to get that money back and put it to work in the United States.
Those are all of the things the Republicans are proposing. It means
more money in the pockets of American workers, and it means simpler
taxes and more jobs for American workers. Isn't that what we are
looking for? Isn't that what prosperity means for America? Isn't that
what a healthy economy means--job growth and the sort of things that
happen when we get the kind of tax reform we have proposed?
I want to address one other thing I have heard over the past couple
of days as our plan has come out. I have heard some Members on the
other side of the aisle say that under the Republican plan, certain
people will win more than others. Under the Republican plan, the goal
is for everyone to win. The American economy will win. When we have a
growing economy, people keep more of their hard-earned money. That is
the goal. That is why the President and the Republicans in Congress
wanted to take up tax relief right now in the first place. We need to
do this to help all American families.
This gets back to Ronald Reagan, in that tax reform--tax reductions,
tax relief--means a big and hopeful future for all Americans. That
should be the goal. It should be the goal of every Member of the U.S.
Senate. It should be the goal of every American. We want to make taxes
fairer and simpler and lower for everyone.
There are too many people in Washington right now who want to use
America's tax laws to punish or reward one group of Americans or
another. Too many people in Washington want to use this debate over tax
reform to stir up conflict and resentment. We hear it already in the
Democrats' talking points. There are some Democrats in this Senate who
think that is good politics. Well, it is terrible policy and terrible
for the direction of our country and economy.
The tax plan the Republicans have released this last week does
nothing to
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change who bears the burden of taxes in the country. People who are
fortunate and have high incomes will pay their fair share; people who
make less will pay less. That is how the Tax Code is spread today.
Nothing in this plan changes that.
We have a lot of work ahead of us. We have to figure out the exact
income levels for each of the tax brackets and the size of some of the
tax credits families get. These are all important details. That is the
kind of debate we are going to be having--the markup on the budget and
the mathematics of the tax bill coming through committee.
I am so grateful to Senator Hatch and members of the Finance
Committee for all of the hard work they will be putting into this over
the next several weeks.
I will refer back to the quote of the Treasury Secretary, Bill Simon,
who said: ``The nation should have a tax code that looks like someone
designed it on purpose.'' This is our chance. We need to make sure we
take full advantage of it.
Thank you, Mr. President.
I yield the floor.
The PRESIDING OFFICER. The Senator from South Dakota.
Mr. ROUNDS. Mr. President, today I rise to speak about our country's
need for tax reform. As our previous speakers have indicated, this is a
critical time in our country, and we have an opportunity to make some
good decisions that will impact our Nation for literally generations to
come.
Reforming our Tax Code is a top priority not only for myself but for
many of my colleagues and the President. We are committed to delivering
tax reform that will provide more jobs, bigger paychecks, and a fairer
tax system for the American people.
Over the 8 years of the previous administration, economic growth
averaged a paltry 1.5 percent annually, which is about half of the
post-World War II average. This anemic growth has led to stagnant wages
and, according to the Joint Economic Committee, has cost families an
average of $8,600 in income on an annual basis. It is no wonder that
half of the American public says they are living paycheck to paycheck.
This is simply not acceptable.
Even more concerning, the Congressional Budget Office is projecting
economic growth to remain under 2 percent over the next 10 years if we
do not act. If that happens, let me just share with you the real
concern. If we allow economic growth to stay under 2 percent, then we
will literally bring in revenue based upon the size of our economy. If
we allow economic growth to move at a paltry 2 percent or less, then we
won't have the revenue to pay our bills.
Today, right now, we are looking at trillion-dollar deficits. Yet, if
we take a look at where the dollars are going, they go basically--
looking at our entire budget, about 28 percent of the money that we
spend today is found within the 12 appropriations bills that make up
the defense and the nondefense discretionary side of the budget. All of
the remaining items, making up 72 percent, are in areas of mandatory
payments--Medicare, Medicaid, Social Security, and interest on the
debt. If we don't do anything and if we continue on this same path,
with the type of growth we have, then we can expect that within 9 years
now, by the year 2026, our country's 250th birthday, 99 percent of all
of the revenue we take in will go into Medicare, Medicaid, Social
Security, and interest on the debt. That means there will be only 1
percent remaining for defense of our country, roads, bridges, research,
education, and all of those other items that many people really want to
see and that help us to move ahead as a country.
We have to make changes now that will allow our country's economy to
grow and prosper the way it used to. The way we believe we do that is
by changing our Tax Code, changing the regulatory environment in the
United States, and sending the message back to the businesses that this
is the place where they want to do business. They don't have to leave
our shores in order to actually make a profit and be able to keep that
profit.
It is our intention to deliver policies that will jolt our economy,
allow hard-working families to keep more of their paychecks, and
provide financial opportunities to lower and middle-class families. Tax
reform is a vital component of this.
Our current overly complicated Tax Code is more than 70,000 pages in
length. It takes Americans more than 8.1 billion hours each year to
file their taxes. A fairer, simpler Tax Code will grow the economy,
increase wages for American families, improve American competitiveness
overseas, and provide much needed certainty for our business community.
It has been 30 years since our Tax Code was last reformed. The rest
of the industrialized world has learned from America what it takes to
be competitive. They have seen what our tax rates have become. They
have lowered their tax rates. They are now inviting businesses to their
shores rather than to ours. Businesses that can go anyplace in the
world they want to are not choosing America as their location anymore.
We have to change that because when they come back, they bring good-
paying jobs with them. They keep the profits here, which are reinvested
within our borders rather than overseas, and that adds to a growing
economy here, which allows us more revenue through even lower tax
rates.
The average corporate rate in the United States today is 39 percent,
compared to 25 percent by our foreign competitors. This puts American
businesses at a disadvantage right out of the gate. We must reform the
tax rate to one that incentivizes businesses to remain here in America
and keep good-paying jobs from going overseas. Doing so will unleash
the full potential of this American economy.
One thing we can all agree on is that taxes are too high and that the
tax rate, no matter who you are, should be lowered. Allowing all
American families to keep more of their hard-earned dollars by taking
them out of the hands of Washington and putting them back into their
pocketbooks will result in a more prosperous America. That means more
people investing in America long term. When our economy is healthy,
every American will feel the positive effects.
I am encouraged by the ongoing discussions and progress being made to
alleviate the tax burden on American businesses and American families,
and I will continue to work with anyone serious about lowering taxes
and reforming the code to provide a much needed boost to our sluggish
economy. The American people deserve better than the uncertain growth
and burdens still lingering from the previous administration.
Thank you, Mr. President.
I yield the floor.
The PRESIDING OFFICER. The Senator from North Carolina.
Mr. TILLIS. Thank you, Mr. President.
I appreciate the opportunity to speak today. Like last week, I didn't
plan on speaking on this subject, so my staff is probably wondering
once again what their boss is going to say. But I was thinking that
maybe we could translate a little bit of what we are trying to do with
tax reform, because we talk about tax rates, exemptions, exceptions,
and simplification--all this stuff that is important because it gets
baked into the bill--but we don't spend a lot of time explaining why we
are trying to do what we are doing.
The last time we had real, meaningful, impactful tax reform was back
in 1986. That is when Republicans and Democrats came together and
decided that the stagnant economy that I grew up in--I graduated from
high school in 1978. I didn't immediately go to college. I moved away
from home when I was 17 years old, and I was working. It was an economy
that was not unlike today's. In many respects, it may have been a
little bit worse. The environment was the same. Iran was behaving
badly, and Russia was behaving badly. We had sort of the same sort of
global environment that we have today. We had the threats that we have
to confront every single day, and we had the threat to the future of a
generation. I mean, literally, people had no earthly idea, if they were
getting an education, whether they would be able to get a job because
the job-creation numbers when I was 26 years old were terrible. People
were worried about whether they could pay for college.
So why are we doing tax reform? We are doing tax reform because it is
time for the American economy to grow back to what it is capable of
doing, what it has done in the past.
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We need tax reform so we can create economic expansion that lets us
pay down our debt, which many people in the military say is the single
greatest threat to our national security.
We need tax reform and we need to grow the economy because we owe it
to this generation to have the same opportunities that I did.
It can be done, but we have to do it probably through reconciliation
because right now, even though many of the proposals that we are
putting forward--the tax rate and the kinds of policies we are putting
forward have been supported by our colleagues and many of my friends on
the other side of the aisle. For some reason, they don't make sense
anymore. They made sense back in 1986 when Democrats and Republicans
joined together to do tax reform. If you were in your midtwenties then,
you saw prosperity unlike anything we have seen right up to today. That
was the last time we saw great growth in our economy. We need to get
back to providing those same sorts of opportunities.
People will tell you that we are not giving a cut to the little guy
or the working man. Well, one thing you don't see when you see the
percentage rates that we are talking about on individual tax rates that
we are targeting is that there will be tens of thousands of people who
will pay zero taxes. There is a actually a zero tax bracket. There are
people who, because of the exceptions and exemptions that we are
proposing, will actually fall below having a Federal tax liability. We
need to talk about that.
We need to recognize that we have to provide relief to the entire
spectrum, from the businesses that hire people and create jobs to the
working families and the people who don't make enough where we can take
any more away from them because they need it to pay their bills. They
need to pay their electric bills, their utility bills, their school
tuition, and all the other things that working families are struggling
to do today, just as I was struggling to do back in 1986.
So I hope this Congress will deliver on the promise we made last year
to cut taxes, to get this economy moving again, and to provide the same
opportunities for the generation going to school and the people who
aren't in school, who are struggling to make a living--the same
opportunities that I got when I was that 26-year-old back in 1986. We
can do it. I know we can do it because we have done it before. It is a
promise we made and a promise we need to keep.
Thank you, Mr. President.
I yield the floor.
The PRESIDING OFFICER. The Senator from Pennsylvania.