[Congressional Record Volume 163, Number 173 (Thursday, October 26, 2017)]
[Senate]
[Pages S6841-S6842]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               TAX REFORM

  Mr. HOEVEN. Mr. President, I rise once again today to talk about how 
we are working to reform our outdated Tax Code and to provide much 
needed tax relief to our Nation's small businesses and to hard-working 
families and ranchers. We are working to not only provide hard-working 
taxpayers with tax relief but also to strengthen our economy and to 
stimulate job creation.
  Along with the regulatory relief we have already provided and are 
working to continue to provide, this tax relief is all about a growing 
economy, more jobs, and higher wages for hard-working Americans and 
then making sure that they not only keep more of their earnings after 
tax but that they see growing wages due to a stronger economy that is 
so important after the last decade of stagnant wages and income. It is 
important to understand that this tax relief is both. It is absolutely 
about lowering the tax burden, but it is also about moving wages and 
incomes higher. That is the rising tide that lifts all boats in our 
country.
  Today, the House of Representatives passed a budget resolution that 
the Senate sent them last week, so now we have completed the first step 
in terms of enacting pro-growth tax reform that, as I said, will 
provide tax relief to millions of middle-class families who have been 
struggling to get ahead over the past decade.
  Today, I want to focus on how our tax proposal will reduce the tax 
burden on small businesses. Small businesses make up 96 percent of all 
employers in my State and over 90 percent of the businesses in the 
country. Over 90 percent of the businesses in this country are small 
businesses.
  Earlier this week, we had a very productive meeting with the 
President to talk about our priorities for tax relief, and I 
specifically highlighted to him the importance of ensuring that tax 
reform works for our small businesses. When you talk about small 
businesses, you are talking about farmers and ranchers. As I said, 90 
percent of all the businesses in this country are small businesses. So 
we are working with the administration and with the House to enact tax 
reforms that will enable American families to keep more of their hard-
earned money and, as I said, empower our small businesses to invest and 
grow.
  Our effort is about growing our economy and regaining our economic 
competitiveness in a global economy. Our Tax Code needs to ensure that 
our small business owners and entrepreneurs can compete in that global 
economy.
  Small businesses, as I said, are the engine that drives our economy. 
They are the backbone of our economy. Small businesses create more jobs 
and employ more people than major corporations. They are the heart and 
soul of Main Streets across America. These businesses earn the majority 
of all business income in the United States and employ over half the 
private sector workforce in 49 out of 50 States. They employ over half 
of the private sector workforce in 49 of our 50 States.
  Over the past month, I have hosted tax reform roundtables across 
North Dakota to hear directly from our job creators--from our State's 
small businesses, from our ag leaders, from our farmers, and from our 
ranchers. What are their priorities when we talk about tax relief and 
tax reform?
  Our tax blueprint supports those small businesses throughout the 
country by promoting job creation, economic growth, and, as I said 
earlier, global competitiveness. We propose to do this in a number of 
ways, but the biggest and most impactful thing is that we are lowering 
the tax burden. It needs to be tax relief.
  Right now, for our small businesses, the marginal tax rate can reach 
as high as 44.6 percent. Think about that. Almost half of their income 
is going to Federal income tax. That is nearly twice the average rate 
of the rest of the industrialized world. So here we are trying to 
compete with that high tax rate--almost double compared to the average 
rate of the rest of the industrialized world.
  By reducing the maximum tax rate for sole proprietorships, 
partnerships, and S corporations to 25 percent, we are creating greater 
economic growth and opportunity as small businesses reinvest in their 
businesses, in their employees, in their communities, and generate job 
growth.
  Additionally, many small businesses, including farmers and ranchers, 
do not have access to the equity they need to operate, instead relying 
heavily on debt financing to fund their businesses. They go to the bank 
and borrow. This is particularly true for new and beginning 
enterprises, including new startups in technology--not just farming and 
ranching and traditional businesses but businesses across the board.
  Our Tax Code needs to incentivize our Nation's entrepreneurs to start 
their business, and we need to make sure they can get access to 
capital. They need to be able to get access to that capital, but when 
they do, by and large, they are going to the bank and borrowing. That 
means they have to pay interest on that debt. So it is very important 
for small businesses that the interest on that debt be deductible. That 
is a huge cost, particularly for our farmers and ranchers. They don't 
have opportunities to float equity. They don't raise equity for their 
farming operation when they need to buy a tractor or a combine or you 
name it. They have to go to the bank and borrow.
  So the deductibility of that interest expense to them is absolutely 
vital in their interests. That is true with small businesses across the 
board. When you look at small businesses in your community, they go to 
the bank and they borrow, and that interest cost is a big part of their 
business expense. They need to be able to continue to deduct it.
  In the framework that we have proposed, another very important issue 
is being able to expense investments. If you really want to trigger 
growth, you encourage that investment. So the tax reform framework or 
proposal that we have put forward allows, in the first 5 years, full 
expensing of new investments. That is very stimulative to our economy. 
It is very pro-growth.
  The other piece that I think is very important here is that we keep 
the section 179 expensing longer term. I think,

[[Page S6842]]

as we proposed it now, we would have expensing in the first 5 years--
full expensing. That is great. That is, as I say, stimulative to the 
economy. But beyond that, then we need to make sure that section 179 
expensing is there so that small businesses, farmers, ranchers, and 
others will know that they are going to continue to be able to expense 
their investment in new plants and new equipment. That is what keeps 
those small businesses growing. That is what keeps them hiring more 
people. That is what creates more jobs, and that is what pushes wages 
and income higher.
  Also, we need to simplify and streamline the Tax Code. Right now, the 
Tax Code is nearly 70,000 pages long--talk about being difficult and 
complex. Americans, right now, currently spend 6 billion hours a year 
complying with that Tax Code. That is ridiculous. Can you imagine 6 
billion hours a year just to figure out how to pay your taxes? So here 
is somebody who wants to pay their taxes. They spend all that time and 
all that effort just to figure out how much they have to pay. 
Obviously, we can do a lot better than that.
  Our goal through tax reform is to allow the vast majority of 
Americans to file their tax return on a single simple page. I will 
mention that again. I think it is important. Our goal is for the vast 
majority of Americans, in essence, to file their tax return on one page 
and to make it easier to pay your taxes, to figure out what you owe, 
and to take away all that stress and all that difficulty in just trying 
to pay your taxes.
  Many economists agree that high business taxes reduce wages to 
workers, raise costs for consumers, and reduces returns on retirement 
savings. Maintaining these high tax rates do nothing to improve the 
fairness of our system. They only punish everyday, hard-working, tax-
paying citizens and reduce economic opportunity in America.
  I will conclude on the same point that I started with, and that is by 
saying that there are two objectives here. It is not just to simplify 
and reduce the tax burden, so that people have more of their earnings 
in their pocket after paying taxes, but the other is to make sure they 
earn more and that we move wages and income higher. If you look at the 
growth rate in our economy over the last decade, it has struggled, in 
essence, to get to 2 percent. But compare that to the period from World 
War II to the present. Over that longer period, we averaged 3.3 
percent. We want to get that growth rate back up.
  We started to get that growth rate back up by reducing the regulatory 
burden. Over the course of this year, the administration and this 
Congress have done a lot to reduce the regulatory burden. Our growth 
rate has ticked up in the most recent month to 3.1 percent, the highest 
it has been in a long time. So what we want to do is to combine that 
regulatory relief and tax relief and get that higher growth rate. We 
also want to add an infrastructure package. When you put those things 
together, what do you get? You get more jobs, higher wages, higher 
income, and a higher standard of living for hard-working American 
citizens across this great Nation. That is the objective. That is what 
we are trying to do.
  We all need to work together, and our goal is to get that done before 
the end of the year.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from Maryland.

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