[Congressional Record Volume 163, Number 160 (Thursday, October 5, 2017)]
[Senate]
[Pages S6334-S6335]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               Tax Reform

  Mrs. CAPITO. Madam President, last week, I rose to talk about the 
importance of tax reform. I believe this is a policy issue we cannot 
talk about enough and that we cannot emphasize enough. So, today, I 
rise to talk about how important the reform is to our small businesses, 
and in the coming weeks, I will be up here to talk about other 
important aspects of tax reform.
  We are all from different States and other parts of the country, but 
we all know small businesses are a major economic driver in our 
country, as 95 percent of businesses in the United States are small 
businesses, and that number is even higher in my State of West 
Virginia. Small businesses employ more than half of West Virginia's 
workforce. Yet our small businesses face a marginal tax rate as high as 
39.6 percent. At the same time, their effective tax rate can vary 
widely. In fact, a CNBC survey showed that 22 percent of small 
businesses cannot really say what their effective tax rate really is.
  Think about that.
  If you are a small business that is a partnership or an LLC, then 
your profits are going to pass through to you and be taxed at the 
individual rate. There are currently seven individual tax brackets. 
Then you have credits and deductions. There is also a self-employment 
tax, and the list goes on. On top of that, small businesses can have 
Social Security and Medicare taxes, a Federal unemployment tax, and 
employment taxes. That is not even taking into account taxes like a 
State-level income tax or property tax and more. That is why businesses 
and individuals spend billions of dollars a year to comply with the Tax 
Code. That is more than 18 hours for every man and woman and child in 
the United States of America. If I could give a visual here, that is 
basically 3 million people working full time on taxes for small 
businesses at a cost of $195 billion.
  The point is, it is complicated. Our Tax Code is too complicated, and 
that is part of what tax reform is about--simplifying the Tax Code. If 
Congress can simplify the Tax Code just to cut compliance costs in 
half, think of how many significant resources that would free up that 
would be better used to grow the economy, create jobs, raise wages, and 
expand businesses.
  The National Federation of Independent Business, which represents 
325,000 small businesses across this country, called this tax reform 
framework a good start, and it has urged us to take swift action. 
According to a survey by Paychex, 41 percent of small business owners 
want tax reform to be the very top priority.
  Whom will these reforms really help? We are going to have a long 
discussion on this. This is just part of whom they will help. They will 
help the small businesses that employ so many people in my home State 
of West Virginia. They will help people like Eric Hott, of EH 
Chocolates & More, from Hampshire County. Eric has a great story. Eric 
grew up on a farm in Kirby, WV. His mother was from Hornberg, Germany. 
While growing up, his grandmother was always cooking something. After 
graduating from high school, Eric moved to Germany to begin a culinary 
apprenticeship. By 2006, he had a chef apprenticeship at a five-star 
hotel in Germany. He went on to serve at events like the G8 Summit and 
for guests that included the German Chancellor and his First Lady. 
After running a patisserie in Germany, he moved to Switzerland, where 
he refined and perfected the art of chocolate-making. That sounds good 
to me. Then what did he do? He wanted to come home. He returned home to 
West Virginia. He went back to Kirby, WV, and started his own small 
businesses--first EH Chocolates & More and, later, Farm Fresh Produce. 
Both are growing and delicious businesses.
  Small businesses employ middle-class Americans who power this and 
other small businesses across the country. We need more folks like 
Eric--lots more--who are willing to take the risk, who have a good 
idea, and who want to stay and work in their own homes in rural America 
and certainly in our State of West Virginia, which has had a major 
economic downturn. We need more Eric Hotts. We need to simplify the Tax 
Code for small businesses and let them focus on what they do best, 
which is refining their products, providing their services, and 
providing jobs for people in their various areas.
  As much as any other policy that Congress can advance, tax reform 
will promote growth and provide job opportunities across this great 
country. Across the entire country, only two in five distressed 
communities have seen any job growth during the past 5 years. Fully 50 
percent of U.S. job growth has occurred in just 2 percent of our 
country's counties.
  We need to change that. We need to help small businesses that are 
major economic drivers in every part of our country. It is no wonder 
that small businesses have found it difficult to open, let alone 
succeed in many parts of our country. Because of our outdated Tax Code, 
real wages for most workers have barely increased for decades. By 
modernizing our Tax Code, we can create more opportunity and higher 
wages for Americans. We can achieve a simpler system with lower rates 
that is good for business and workers and, from the description I just 
put forward, would be a good time saver and resource saver.
  The best thing about this in terms of small business is that it would 
lead to more jobs. Let's create an environment that leads to more 
investment in our States and continues to grow and build jobs. These 
are the changes hardworking West Virginians and Americans are hungering 
for. In order to make West Virginia the best place to live and work, 
now is the time for tax reform.
  I look forward to working with my colleagues to make this a reality. 
Doing it will benefit so many--everyone in this country.
  I thank the Presiding Officer and yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona.
  (The remarks of Mr. Flake pertaining to the introduction of S. 1937 
are printed in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')
  Mr. FLAKE. I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. LEE. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.

[[Page S6335]]

  The PRESIDING OFFICER. Without objection, it is so ordered.