[Congressional Record Volume 164, Number 160 (Thursday, September 27, 2018)]
[House]
[Pages H9113-H9118]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AMERICAN INNOVATION ACT OF 2018
Mr. BUCHANAN. Mr. Speaker, pursuant to House Resolution 1084, I call
up the bill (H.R. 6756) to amend the Internal Revenue Code of 1986 to
promote new business innovation, and for other purposes, and ask for
its immediate consideration.
The Clerk read the title of the bill.
The SPEAKER pro tempore (Mr. Poe of Texas). Pursuant to House
Resolution 1084, the amendment recommended by the Committee on Ways and
Means, printed in the bill, modified by the amendment printed in part A
of House Report 115-985, is adopted, and the bill, as amended, is
considered read.
The text of the bill, as amended, is as follows:
H.R. 6756
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``American Innovation Act of
2018''.
SEC. 2. SIMPLIFICATION AND EXPANSION OF DEDUCTION FOR START-
UP AND ORGANIZATIONAL EXPENDITURES.
(a) In General.--Section 195 of the Internal Revenue Code
of 1986 is amended by redesignating subsections (c) and (d)
as subsections (d) and (e), respectively, and by striking all
that precedes subsection (d) (as so redesignated) and
inserting the following:
``SEC. 195. START-UP AND ORGANIZATIONAL EXPENDITURES.
``(a) Capitalization of Expenditures.--Except as otherwise
provided in this section, no deduction shall be allowed for
start-up or organizational expenditures.
``(b) Election to Deduct.--
``(1) In general.--If a taxpayer elects the application of
this subsection with respect to any active trade or
business--
``(A) the taxpayer shall be allowed a deduction for the
taxable year in which such active trade or business begins in
an amount equal to the lesser of--
``(i) the aggregate amount of start-up and organizational
expenditures paid or incurred in connection with such active
trade or business, or
``(ii) $20,000, reduced (but not below zero) by the amount
by which such aggregate amount exceeds $120,000, and
``(B) the remainder of such start-up and organizational
expenditures shall be charged to capital account and allowed
as an amortization deduction determined by amortizing such
expenditures ratably over the 180-month period beginning with
the month in which the active trade or business begins.
``(2) Application to organizational expenditures.--In the
case of organizational expenditures with respect to any
corporation or partnership, the active trade or business
referred to in paragraph (1) means the first active trade or
business carried on by such corporation or partnership.
``(3) Inflation adjustment.--In the case of any taxable
year beginning after December 31, 2019, the $20,000 and
$120,000 amounts in paragraph (1)(A)(ii) shall each be
increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 2018'
for `calendar year 2016' in subparagraph (A)(ii) thereof.
If any amount as increased under the preceding sentence is
not a multiple of $1,000, such amount shall be rounded to the
nearest multiple of $1,000.
``(c) Allowance of Deduction Upon Liquidation or
Disposition.--
``(1) Liquidation of partnership or corporation.--If any
partnership or corporation is completely liquidated by the
taxpayer, any start-up or organizational expenditures paid or
incurred in connection with such partnership or corporation
which were not allowed as a deduction by reason of this
section may be deducted to the extent allowable under section
165.
``(2) Disposition of trade or business.--If any trade or
business is completely disposed of or discontinued by the
taxpayer, any start-up expenditures paid or incurred in
connection with such trade or business which were not allowed
as a deduction by reason of this section (and not taken into
account in connection with a liquidation to which paragraph
(1) applies) may be deducted to the extent allowable under
section 165. For purposes of this paragraph, in the case of
any deduction allowed under subsection (b)(1) with respect to
both start-up and organizational expenditures, the amount
treated as so allowed with respect to start-up expenditures
shall bear the same ratio to such deduction as the start-up
expenditures taken into account in determining such deduction
bears to the aggregate of the start-up and organizational
expenditures so taken into account.''.
(b) Organizational Expenditures.--Section 195(d) of such
Code, as redesignated by subsection (a), is amended by adding
at the end the following new paragraphs:
``(3) Organizational expenditures.--The term
`organizational expenditures' means any expenditure which--
``(A) is incident to the creation of a corporation or a
partnership,
``(B) is chargeable to capital account, and
``(C) is of a character which, if expended incident to the
creation of a corporation or a partnership having an
ascertainable life, would be amortizable over such life.
``(4) Application to certain disregarded entities.--In the
case of any entity with a single owner that is disregarded as
an entity separate from its owner, this section shall be
applied in the same manner as if such entity were a
corporation.''.
(c) Election.--Section 195(e)(2) of such Code, as
redesignated by subsection (a), is amended to read as
follows:
``(2) Partnerships and s corporations.--In the case of any
partnership or S corporation, the election under subsection
(b) shall be made (and this section shall be applied) at the
entity level.''.
(d) Conforming Amendments.--
(1)(A) Part VIII of subchapter B of chapter 1 is amended by
striking section 248 of such Code (and by striking the item
relating to such section in the table of sections of such
part).
(B) Section 170(b)(2)(D)(ii) of such Code is amended by
striking ``(except section 248)''.
(C) Section 312(n)(3) of such Code is amended by striking
``Sections 173 and 248'' and inserting ``Sections 173 and
195''.
(D) Section 535(b)(3) of such Code is amended by striking
``(except section 248)''.
(E) Section 545(b)(3) of such Code is amended by striking
``(except section 248)''.
(F) Section 545(b)(4) of such Code is amended by striking
``(except section 248)''.
(G) Section 834(c)(7) of such Code is amended by striking
``(except section 248)''.
(H) Section 852(b)(2)(C) of such Code is amended by
striking ``(except section 248)''.
(I) Section 857(b)(2)(A) of such Code is amended by
striking ``(except section 248)''.
(J) Section 1363(b) of such Code is amended by adding
``and'' at the end of paragraph (2), by striking paragraph
(3), and by redesignating paragraph (4) as paragraph (3).
(K) Section 1375(b)(1)(B)(i) of such Code is amended by
striking ``(other than the deduction allowed by section 248,
relating to organization expenditures)''.
(2)(A) Section 709 of such Code is amended to read as
follows:
``SEC. 709. TREATMENT OF SYNDICATION FEES.
``No deduction shall be allowed under this chapter to a
partnership or to any partner of the partnership for any
amounts paid or incurred to promote the sale of (or to sell)
an interest in the partnership.''.
(B) The item relating to section 709 in the table of
sections for part I of subchapter K of chapter 1 of such Code
is amended to read as follows:
``Sec. 709. Treatment of syndication fees.''.
(3) Section 1202(e)(2)(A) of such Code is amended by
striking ``section 195(c)(1)(A)'' and inserting ``section
195(d)(1)(A)''.
(4) The item relating to section 195 in the table of
contents of part VI of subchapter B of chapter 1 of such Code
is amended to read as follows:
``Sec. 195. Start-up and organizational expenditures.''.
(e) Effective Date.--The amendments made by this section
shall apply to expenditures paid or incurred in connection
with active trades or businesses which begin in taxable years
beginning after December 31, 2018.
SEC. 3. PRESERVATION OF START-UP NET OPERATING LOSSES AND TAX
CREDITS AFTER OWNERSHIP CHANGE.
(a) Application to Net Operating Losses.--Section 382(d) of
the Internal Revenue Code of 1986 is amended by adding at the
end the following new paragraph:
``(4) Exception for start-up losses.--
``(A) In general.--In the case of any net operating loss
carryforward described in paragraph (1)(A) which arose in a
start-up period taxable year, the amount of such net
operating loss carryforward otherwise taken into account
under such paragraph shall be reduced by the net start-up
loss determined with respect to the trade or business
referred to in subparagraph (B)(i) for such start-up period
taxable year.
``(B) Start-up period taxable year.--The term `start-up
period taxable year' means any taxable year of the old loss
corporation which--
``(i) begins before the close of the 3-year period
beginning on the date on which any trade or business of such
corporation begins as an active trade or business (as
determined under section 195(d)(2) without regard to
subparagraph (B) thereof), and
``(ii) ends after September 10, 2018.
``(C) Net start-up loss.--
``(i) In general.--The term `net start-up loss' means, with
respect to any trade or business referred to in subparagraph
(B)(i) for any start-up period taxable year, the amount which
bears the same ratio (but not greater than 1) to the
[[Page H9114]]
net operating loss carryforward which arose in such start-up
period taxable year as--
``(I) the net operating loss (if any) which would have been
determined for such start-up period taxable year if only
items of income, gain, deduction, and loss properly allocable
to such trade or business were taken into account, bears to
``(II) the amount of the net operating loss determined for
such start-up period taxable year.
``(ii) Special rule for last taxable year in start-up
period.--In the case of any start-up period taxable year
which ends after the close of the 3-year period described in
subparagraph (B)(i) with respect to any trade or business,
the net start-up loss with respect to such trade or business
for such start-up period taxable year shall be the same
proportion of such loss (determined without regard to this
clause) as the proportion of such start-up period taxable
year which is on or before the last day of such period.
``(D) Application to net operating loss arising in year of
ownership change.--Subparagraph (A) shall apply to any net
operating loss described in paragraph (1)(B) in the same
manner as such subparagraph applies to net operating loss
carryforwards described in paragraph (1)(A), but by only
taking into account the amount of such net operating loss
(and the amount of the net start-up loss) which is allocable
under paragraph (1)(B) to the period described in such
paragraph. Proper adjustment in the allocation of the net
start-up loss under the preceding sentence shall be made in
the case of a taxable year to which subparagraph (C)(ii)
applies.
``(E) Application to taxable years which are start-up
period taxable years with respect to more than 1 trade or
business.--In the case of any net operating loss carryforward
which arose in a taxable year which is a start-up period
taxable year with respect to more than 1 trade or business--
``(i) this paragraph shall be applied separately with
respect to each such trade or business, and
``(ii) the aggregate reductions under subparagraph (A)
shall not exceed such net operating loss carryforward.
``(F) Continuity of business requirement.--If the new loss
corporation does not continue the trade or business referred
to in subparagraph (B)(i) at all times during the 2-year
period beginning on the change date, this paragraph shall not
apply with respect to such trade or business.
``(G) Certain title 11 or similar cases.--
``(i) Multiple ownership changes.--In the case of a 2nd
ownership change to which subsection (l)(5)(D) applies, this
paragraph shall not apply for purposes of determining the
pre-change loss with respect to such 2nd ownership change.
``(ii) Certain insolvency transactions.--If subsection
(l)(6) applies for purposes of determining the value of the
old loss corporation under subsection (e), this paragraph
shall not apply.
``(H) Not applicable to disallowed interest.--This
paragraph shall not apply for purposes of applying the rules
of paragraph (1) to the carryover of disallowed interest
under paragraph (3).
``(I) Transition rule.--This paragraph shall not apply with
respect to any trade or business if the date on which such
trade or business begins as an active trade or business (as
determined under section 195(d)(2) without regard to
subparagraph (B) thereof) is on or before September 10,
2018.''.
(b) Application to Excess Credits.--Section 383 of such
Code is amended by redesignating subsection (e) as subsection
(f) and by inserting after subsection (d) the following new
subsection:
``(e) Exception for Start-up Excess Credits.--
``(1) In general.--In the case of any unused general
business credit of the corporation under section 39 which
arose in a start-up period taxable year, the amount of such
unused general business credit otherwise taken into account
under subsection (a)(2)(A) shall be reduced by the start-up
excess credit determined with respect to any trade or
business referred to in section 382(d)(4)(B)(i) for such
start-up period taxable year.
``(2) Start-up period taxable year.--For purposes of this
subsection, the term `start-up period taxable year' has the
meaning given such term in section 382(d)(4)(B).
``(3) Start-up excess credit.--For purposes of this
subsection, the term `start-up excess credit' means, with
respect to any trade or business referred to in section
382(d)(4)(B)(i) for any start-up period taxable year, the
amount which bears the same ratio to the unused general
business credit which arose in such start-up period taxable
year as--
``(A) the amount of the general business credit which would
have been determined for such start-up period taxable year if
only credits properly allocable to such trade or business
were taken into account, bears to
``(B) the amount of the general business credit determined
for such start-up period taxable year.
``(4) Application of certain rules.--Rules similar to the
rules of subparagraphs (C)(ii), (D), (E), and (F) of section
382(d)(4) shall apply for purposes of this subsection.
``(5) Transition rule.--This subsection shall not apply
with respect to any trade or business if the date on which
such trade or business begins as an active trade or business
(as determined under section 195(d)(2) without regard to
subparagraph (B) thereof) is on or before September 10,
2018.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending after September 10, 2018.
SEC. 4. BUDGETARY EFFECTS.
(a) Statutory PAYGO Scorecards.--The budgetary effects of
this Act shall not be entered on either PAYGO scorecard
maintained pursuant to section 4(d) of the Statutory Pay-As-
You-Go Act of 2010.
(b) Senate PAYGO Scorecards.--The budgetary effects of this
Act shall not be entered on any PAYGO scorecard maintained
for purposes of section 4106 of H. Con. Res. 71 (115th
Congress).
The SPEAKER pro tempore. The bill, as amended, shall be debatable for
1 hour, equally divided and controlled by the chair and ranking
minority member of the Committee on Ways and Means.
The gentleman from Florida (Mr. Buchanan) and the gentlewoman from
California (Ms. Judy Chu) each will control 30 minutes.
The Chair recognizes the gentleman from Florida.
General Leave
Mr. BUCHANAN. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days within which to revise and extend their remarks
and include extraneous materials on H.R. 6756, currently under
consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Florida?
There was no objection.
Mr. BUCHANAN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I am grateful this bill has been brought to the floor
for consideration.
I rise in support of H.R. 6756, the American Innovation Act, which
supports and encourages entrepreneurs to start new businesses.
The United States recently dropped out of Bloomberg's list of the top
10 most innovative countries in the world. New business formations in
the United States have taken a dramatic downturn since the 2008
recession.
Between 1977 and 2007, those 30 years, the economy added 120,000,
net, new businesses each year. Since 2008, however, the economy has
added only about 2,000, net, new businesses each year since.
We should all be committed to making the United States the innovation
leader of the world. The American Innovation Act is a down payment
towards reaching that goal.
The American Innovation Act encourages entrepreneurs in two ways:
First, H.R. 6756 allows new businesses to immediately deduct more of
their startup organizational expenses. It simplifies the Code and
allows businesses to deduct up to $20,000 of startup and organizational
expenses when their new business begins. This doubles the amount of the
expenses that a business may write off in its first year.
Second, the American Innovation Act helps new businesses innovate by
preserving valuable tax benefits, like the R&D credit, that are
generated from activities conducted in the business' early years.
As any entrepreneur knows, starting a new business requires hard work
and a lot of capital. During its early years, many businesses operate
at a loss, and these losses are used in later years when the business
matures and becomes more profitable. To fund their innovation and
growth, entrepreneurs and business owners may seek equity capital from
other investors.
Today, the infusion of this new investment may trigger limits on the
use of a corporation's valuable losses and credits from the business'
earlier years. Under the American Innovation Act, our country's
businesses may fund their growth and innovation with equity investments
from new shareholders without limiting the use of these valuable losses
and credits.
Mr. Speaker, the American Innovation Act supports our entrepreneurs
and innovators and facilitates the creation of new businesses. I urge
support for this important bill, and I reserve the balance of my time.
Ms. JUDY CHU of California. Mr. Speaker, I yield myself such time as
I may consume.
Mr. Speaker, I rise in opposition to the American Innovation Act.
But before I talk about the underlying bill, I want to make clear
that this bill is part of the Republicans' larger tax scam 2.0. Instead
of increasing opportunity or addressing the income inequality for
Americans, the Republicans are doubling down on their failed policies
that benefit the wealthiest Americans and are ultimately paid for by
the middle class.
As a result of the Republicans' tax law, health insurance companies
in
[[Page H9115]]
State after State are announcing higher premiums for next year, while
health coverage for those living with preexisting conditions is on the
chopping block. To make matters worse, the Medicare trustees cut 3
years off the life of the Medicare trust fund because of the Republican
tax bill.
But instead of backing away from their mistake, the Republicans are
doubling down. Their second round of tax cuts for the wealthy will
further compromise the future of Medicare and Social Security,
depriving seniors the benefits they have earned.
Not to mention, Republicans are cutting taxes for the rich for the
second time in less than a year. By simply making permanent the cut to
the top individual tax rate, Republicans are providing a huge tax cut
for just a fraction of the top 5 percent of taxpayers.
At the same time, the Republicans have doubled down on their attack
on the middle class by making permanent the limits to the State and
local tax deduction. In fact, in my home district in California, 37
percent of tax filers claimed the SALT deduction in 2016, and the
average SALT deduction was $18,517 according to IRS data. This is
nearly double the cap that Republicans have put in place, and that
means that middle class families in my district are footing the bill
for the wealthy's permanent tax cuts.
In addition, Republicans are also permanently limiting the mortgage
interest deduction and casualty loss deduction.
Furthermore, the so-called party of fiscal conservatism will be
passing over $3 trillion in tax breaks in less than a year. Because of
the Republican tax law and President Trump's irresponsible policies,
the U.S. Treasury is now borrowing money at a rate of $5.4 billion per
day.
This package, like the one before it, is being rushed through with no
hearings and no input from stakeholders. A rushed and lopsided process
resulted in tax bill 1.0, and, in fact, Democrats have identified over
100 problems with the Republicans' tax law.
Republicans are doubling down on their flawed policies with this
exercise, with bills guaranteed to be dead on arrival in the Senate.
Tax scam 2.0 is another reckless tax cut for the wealthy that leaves
behind average, hardworking families.
Now I would like to discuss H.R. 6756, the American Innovation Act.
This bill has never received consideration in a public committee
hearing. Last year, the Republicans' rushed process created the end
result of a disastrous tax law that is riddled with problems. Yet
rather than learn from their mistake, the Republicans are, once again,
moving forward with legislation without the appropriate oversight.
Mr. Speaker, I strongly believe in American innovation and
entrepreneurship. As the only member of both the House Small Business
Committee and the Ways and Means Committee, I know just how critical
small businesses are to the growth of our economy. They create two out
of every three new jobs and allow people to be their own bosses.
I know that my Democratic colleagues and I would have
enthusiastically and actively participated in the construction of
bipartisan legislation to help small businesses deduct more of their
startup costs. This is something I care deeply about because access to
capital is one of the biggest challenges facing our entrepreneurs
today. However, Democrats were shut out of the process once again as
the bill was rushed to the floor.
With only a few days left for Congress to be in session, the
Republicans have yet to address rising healthcare costs and how to pay
for innovation and value in our healthcare system.
{time} 1415
They have done nothing to stop the haphazard and reckless trade
policy coming out of the White House.
And this week, the Republicans are driving these so-called tax reform
2.0 bills down a road to nowhere. If they were serious about helping
small businesses and innovative startups, they surely would have not
treated these provisions like an afterthought to their 2017 tax bill.
Therefore, I oppose H.R. 6756 and encourage my colleagues to do the
same. We should work together to ensure that small businesses and
innovative startups have the tools to not just survive, but actually
thrive in the economy. We can do better in a fiscally responsible
manner that does not recklessly add to the deficit.
Mr. Speaker, I reserve the balance of my time.
Mr. BUCHANAN. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Texas (Mr. Brady), chairman of the Ways and Means
Committee.
Mr. BRADY of Texas. Mr. Speaker, I rise in support of H.R. 6756, the
American Innovation Act of 2018, and thank Chairman Buchanan and others
for his leadership for America's startup businesses and innovation.
The truth is, startup businesses are huge contributors to innovation
and productivity as well as job creation here in America. But the
business environment since the great financial crisis has been tough
for those looking to take a risk and start a business.
In fact, new business formation here in America took a dramatic
downturn during the recession, with startups only accounting for 8
percent of all businesses in 2015. That is cut in half from 1977. The
United States also dropped out of Bloomberg's list of the top 10 most
innovative countries in the world. We know that the nation that wins
the innovation race wins the future. This is a problem and, more
importantly, it is a call to action.
The American Innovation Act, led by Chairman Buchanan, will help our
entrepreneurs move a business from their kitchen table to their first
office by allowing them to write off more startup costs in their early
years--years where every dollar matters.
This bill will also allow startups to expand and go to the next level
here in America by bringing in new investors without triggering tax
limits on their access to tax benefits like the R&D tax credit for
activities conducted in their early years.
With a renewed focus on innovation and entrepreneurship, the American
Innovation Act will help America's risk-takers create jobs, invest in
their communities, and continue strengthening America's economy.
Mr. Speaker, this is a very simple bill. It can be read in just a
couple of minutes. It focuses on America's entrepreneurs and startup
costs.
A ``yes'' vote is in support of startup businesses here in America.
A ``yes'' vote is for innovation expansion here in the United States,
not somewhere else.
A ``yes'' vote is for economic growth.
Ms. JUDY CHU of California. Mr. Speaker, I yield 2 minutes to the
gentleman from Vermont (Mr. Welch).
Mr. WELCH. Mr. Speaker, it is with some sadness that I have to say I
believe this is an absolutely terrible tax bill.
The economy is growing. That has been a claim that has been made by
proponents of this tax policy. But it is growing for the few. It is not
growing for the many.
We have the lowest unemployment rate we have had in years. We have
had the highest profits in corporations that we have had since before
the Great Depression. Yet, right now, in this country, childhood
poverty is increasing relentlessly. Relentlessly.
How does that happen when we have such a great so-called economy?
It happens because we have created the hydraulic system that is
transferring money from the low income and middle class to the very
wealthy. That is what this Congress has done. And there are
consequences to the children who are now in poverty and will be in
poverty, but also to those everyday families who aren't on the right
side of the digital divide and whose wages for the past 20 years have
been stagnant or declining, even as the things they need--college
education for their kids, prescription medication for their families--
those prices are exploding.
And by the way, Pharma gets a huge giveaway. They have got the
highest profits they have ever had, and we are passing a tax bill that
gives them more. We are shoveling money to them when they are sticking
price increases to all of us.
This doesn't happen by accident. This has nothing to do with the so-
called entrepreneurial economy. This has to do with a Congress that has
no conscience, that doesn't stand up for everyday people and say: We
want policies that let you have a chance.
[[Page H9116]]
Mr. Speaker, defeat this bill.
Mr. BUCHANAN. Mr. Speaker, I yield myself such time as I may consume.
Let me say to the gentleman that I am not sure how the economy works
in Vermont, but I can tell you that in terms of the tax package--the
original one and this one, 2.0--Florida is on fire, in terms of growth.
There is more energy and more excitement about the tax thing.
Ninety percent of people are getting a tax break. For families of
four in my area, it is $2,400. We have seen little or no growth for the
last 10 years. Now we are at 2 to 3 percent. We have got real growth.
It is tough to get the amount of workers that we now need in Florida,
in general. That is pushing paychecks.
So I don't know what is going on in Vermont or different parts of the
country, but I can tell you that in Florida it is making a huge
difference in terms of the confidence with a lot of startups and
entrepreneurs.
Mr. Speaker, I yield 2 minutes to the gentleman from Michigan (Mr.
Mitchell).
Mr. MITCHELL. Mr. Speaker, I am changing my comments because I was
offended by the last speaker.
I grew up in a family where dad built trucks on the line and mom
worked at the Salvation Army. In my district alone, people get to keep
$2,700 of the money they earn in their pocket rather than being sent to
the Federal Government so our colleagues on the other side of the aisle
can find a way to spend it.
The Tax Cuts and Jobs Act was the first major reforms and major tax
cuts in 31 years. I was young the last time Congress was actually able
to do something about taxing people, taxing money that they earned so
we could figure out how to spend it here--and, frankly, some days, I am
convinced not well.
Since that tax cut jobs have grown. As is noted, unemployment is down
record levels across all demographics. The class warfare kind of amazes
me, frankly.
This week, we are building on those achievements by advancing three
critical pieces legislation. First, the bill now, the American
Innovation Act, will allow startup businesses to double the write-off
amount of startup costs to encourage new business, exactly the type of
people we want to grow businesses and create jobs in this country. It
will bring in new investors and doesn't trigger limits on their tax
benefits.
Today, we will also consider the Family Savings Act, which gives
broader options for retirement savings for people that go to work and
want to know what happens when they get older.
Tomorrow, we will be debating the Protecting Families and Small
Business Tax Cuts, which makes permanent the individual and small
business tax cuts from the Tax Cuts and Jobs Act, tax benefits that
were denied in the Senate because it was determined they needed 60
votes.
I will tell you where the 60 votes did not come in. It did not come
in from our colleagues on the other side of the aisle. So when we were
criticized that they are not permanent at this time, it is because our
colleagues on the other side of the aisle decided they would use it as
a political talking point rather than make permanent the benefits that
would have helped my family, my parents, when they worked.
Mr. Speaker, I am a cosponsor of all three bills, and I ask my
colleagues to support them.
Ms. JUDY CHU of California. Mr. Speaker, I yield 3 minutes to the
gentleman from Wisconsin (Mr. Kind).
Mr. KIND. Mr. Speaker, I thank the gentlewoman from California for
yielding.
Mr. Speaker, I rise reluctantly in opposition to this legislation. I
say reluctantly because there are some good, decent provisions that are
contained in this legislation.
The first year expensing for new businesses, the net operating loss
and tax credit carry over to new ownership and small businesses.
There is a lot of bipartisan support for doing more to support
entrepreneurs and the startup of businesses in that early stage capital
that this bill, in part, is meant to address. Unfortunately the process
is all wrong. Instead of holding hearings, instead of getting feedback,
instead of soliciting bipartisan support--and I am confident that if
time were in order to build support for this bill, there would be wide
bipartisan support--this legislation is being driven for one reason and
one reason only: the political calendar. That is a missed opportunity.
We ought to get back to doing our business on the Ways and Means
Committee and start holding hearings, start getting feedback, and doing
it in a fiscally responsible manner.
This bill, because of no effort to find an offset, will increase our
debt by over $5 billion. Again, it is for some press releases leading
to the midterm elections. Who cares what the impact is going to be for
our children and grandchildren or on future financial obligations that
our Nation shares. Apparently, that fiscal responsibility is out the
window right now, based on the tax cut that passed last year and the
next two bills coming up out of the Ways and Means Committee this week.
But what else is also unfortunate is that during the markup of this
bill, our good friend, the gentleman from California (Mr. Thompson),
offered a very important and I thought thoughtful amendment that would
allow tax credit deductibility for small businesses that were impacted
by natural disasters.
My district in western Wisconsin just got slammed with major flooding
this past month. Unfortunately, there is not a lot of help at the
Federal and State level, whether it is FEMA or State agencies, when it
comes to helping small businesses get back on their feet. There just
isn't. There are small, low-interest SBA loans and maybe some no-
interest loans that the State can offer that all have to be repaid.
Other than that, there is really nothing.
Representative Thompson offered an amendment that said: Let's have
the Federal Tax Code work with these small businesses rather than
against them. Instead of that being thoughtfully considered, it was
rejected out of hand because of the rush to get this bill on the floor.
Again, another missed opportunity of how we should be conducting
business around here and recognizing the needs of small businesses
throughout the country.
Let's slow down. Let's reject what is before us today. We still have
time. The Senate is not planning on taking up these bills. Let's go
back to doing it the right way. Let's talk to one another and find some
common ground. And let's do it in a fiscally responsible manner so we
are not saddling future generations with huge debt, especially given
the aging population in our country.
What we have before us today is the result of a bad process. We can
do better. I encourage my colleagues to reject it. Let's do it the
right way.
Mr. BUCHANAN. Mr. Speaker, I yield myself such time as I may consume.
I just want to mention to the gentleman from Wisconsin that there
were no amendments offered on this bill, if he wants to check that.
I also have a list of groups who are supportive of this bill, such as
Associated Builders and Contractors, the Chamber of Commerce,
Biotechnology Innovation Organization, and Angel Capital Association.
Mr. Speaker, I include in the Record this document listing
organizations in support of the bill.
H.R. 6756 the American Innovation Act of 2018
AdvaMed
American Dental Association
Americans for Tax Reform, 60 Plus Association, American
Commitment, American Conservative Union, American Consumer
Institute, ALEC Action, Americans for a Strong Economy,
Association of Mature American Citizens, Campaign For
Liberty, Ryan Ellis, Center for a Free Economy, Center for
Freedom and Prosperity, Center for Individual Freedom, Center
for Worker Freedom, Citizen Outreach (Nevada), Consumer
Action for a Strong Economy, Council for Citizens Against
Government Waste, Competitive Enterprise Institute, Digital
Liberty, Family Business Coalition, Florida Center Right
Coalition, FreedomWorks, Frontiers of Freedom, Goldwater
Institute (Arizona), Granite State Taxpayers (New Hampshire),
Heritage Action for America, Hispanic American Center for
Economic Research, Hispanic Leadership Fund, Independent
Women's Forum, Independent Women's Voice, Institute for
Liberty, The James Madison Institute (Florida), Jesse Helms
Center (North Carolina), Kansas Policy Institute, Less
Government, Maine Center-right Coalition Meeting, Mississippi
Center for Public Policy, National Taxpayers Union,
[[Page H9117]]
New Hampshire Center-Right Meeting, Ohioans for Tax Reform,
The Ohio Diversity Coalition, Oregon Capitol Watch, Pegasus
Institute (Kentucky), Pegasus Institute (Kentucky), Pelican
Institute for Public Policy (Louisiana), Property Rights
Alliance, Reaching America, Rhode Island Center for Freedom
and Prosperity, Rio Grande Foundation (New Mexico), Small
Business & Entrepreneurship Council, Ohio House of
Representatives Chair, Ohio Center-right Meeting, Taxpayers
Protection Alliance, Tea Party Nation, We the People
Convention, Women for Trump
Angel Capital Association
Associated Builders and Contractors, Inc. (Key Vote)
Biotechnology Innovation Organization
Chamber of Commerce
Club for Growth
Heating, Ventilation, Air Conditioning, and Refrigeration
Industry: Air Conditioning Contractors of America, Heating
Air Conditioning and Refrigeration Distributors
International. Plumbing Heating Cooling Contractors
Association, AMCA International, Air-Conditioning Heating and
Refrigeration Institute
Heritage Foundation
National Venture Capital Association
The National Electrical Contractors Association
Mr. BUCHANAN. Mr. Speaker, I yield 2 minutes to the gentleman from
Illinois (Mr. LaHood).
Mr. LaHOOD. Mr. Speaker, I want to thank Chairman Buchanan for all
his hard work on this legislation.
Mr. Speaker, today, I rise in support of H.R. 6756, the American
Innovation Act.
Over the last 9 months since we passed once-in-a-lifetime tax reform,
small businesses have been empowered by those positive changes to
expand operations, hire new workers, reward employees with bonuses or
increased pay, and keep jobs here at home.
In central and west central Illinois, in my district, we have seen
firsthand how the Tax Cuts and Jobs Act has alleviated businesses of
the burdensome Tax Code we were under before, giving companies all
across different sectors and sizes the ability to innovate and grow
into businesses.
They are companies such as Rivian Automotive in Bloomington-Normal,
Illinois, who is creating state-of-the-art full electric-powered
pickups and SUVs. They announced in May they will be manufacturing
their trucks in Bloomington-Normal, bringing jobs and economic
opportunity to our community.
AutonomouStuff in Morton, Illinois, has evolved into a worldwide
leader in the development of innovative software and engineering
technologies that enable robotics and autonomy.
Precision Planting in Tremont, Illinois, is testing agriculture
practices so that farmers all across the heartland can find innovative
ways to increase production and sustain equipment, making central
Illinois the Silicon Valley of the Midwest.
With the largest medical community in downstate Illinois, the
innovative breakthroughs at our local healthcare systems, such as OSF
HealthCare's Jump Trading Simulation Center in Peoria, or the Memorial
Center for Learning and Innovation in Springfield, serve as catalysts
for reforming how healthcare is delivered by making healthcare safer,
more accessible, and affordable.
{time} 1430
The American Innovation Act, which we are presenting today after a
lot of thoughtful work by the committee, builds upon the economic
successes small businesses have seen over the last 9 months, unleashing
entrepreneurs' innovative spirit, so they can continue to grow,
prosper, and succeed.
Since the recession, creation of new businesses has taken a
significant downturn, and it is time we reform our Tax Code so
entrepreneurs have the ability to achieve their goals.
Mr. Speaker, I commend Chairman Buchanan and Chairman Brady for their
hard work and urge my colleagues to support this bill.
Ms. JUDY CHU of California. Mr. Speaker, I yield myself the balance
of my time.
Mr. Speaker, first, I would like to clarify something. I appreciate
the comment from Chairman Buchanan regarding Mr. Thompson's amendment,
but that does not change the fact that, during tax bill 2.0 and its
markup, every Republican present voted against permanent natural
disaster relief on H.R. 6760.
Mr. Speaker, Democrats are strong believers in the power of American
innovation and entrepreneurship. Democrats support small businesses,
which are the backbone of our economy and create two out of every three
new jobs. My Democratic colleagues and I would have loved to
participate in the drafting of bipartisan legislation to help small
businesses and innovative startups succeed, but that is not the process
that the majority adopted.
This bill, just like tax scam 1.0, has never received the scrutiny it
deserves in a public committee hearing. A rushed and lopsided process
resulted in the disastrous tax law. Yet, rather than learn from their
mistakes, Republicans are once again rushing through legislation
without the appropriate oversight.
This process should tell you how serious the majority is about
helping small businesses, which is not very. If the Republicans were
serious about helping small businesses last year, they surely would not
have enacted their so-called small business tax benefit to disguise a
massive tax cut for millionaires.
If Republicans were serious about helping small businesses and
innovative startups today, they surely would not have treated these
provisions like an afterthought, guaranteed to be dead on arrival in
the Senate.
Mr. Speaker, I believe we should work together to ensure that small
businesses, ranging from mom-and-pop shops to cutting-edge startups,
have the tools they need to thrive in this economy. But we should do it
the right way, with hearings and input from stakeholders, and in a
fiscally responsible manner, not by saddling future Americans with more
debt.
Mr. Speaker, I urge my colleagues to oppose this legislation, and I
yield back the balance of my time.
Mr. BUCHANAN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, as someone who has been in business 30 years, I can just
tell you that, in the last couple of years, our economy in Florida and
I think all over America has exploded. People are excited. They are
enthusiastic.
In fact, I did a roundtable of all women in my district. Why did I do
that? Because 57 percent of startups in the next 10 years will be women
led. So why would we want to not support giving them additional
deductions? Instead of just writing off $5,000, they can write off
$20,000.
In terms of opening businesses, it is as little as 2,000 a year. It
used to be 100,000-plus new startups a year. That is where the jobs are
created.
I chaired the local chamber in Sarasota, Florida. I can tell you, out
of the 2,400 businesses, most of them were 15 employees or less, 90
percent.
I also chaired the Florida chamber. There were 126,000 businesses in
that federation, and most of them were 15 employees or less, many times
1, 2, 3 employees.
It is tough when you open a business. Usually, you have losses for a
couple of years. This bill helps to address that, especially as they
try to attract capital. They could use some of those losses to attract
capital.
This is all about pro-business and growth. We have had little or no
growth for the last 10 years. Now we are starting to take off and be
much more competitive in the world. That is what this bill is all
about.
Mr. Speaker, let me just close with this thought. For too many years,
the United States has been lagging in the creation of new businesses.
Startup businesses are vital to the American economy, because they are
significant contributors to innovation, productivity, and job creation.
Together, we should all support the legislation. This makes it easier
and less costly for hardworking Americans to realize their American
Dream of starting businesses.
The American Innovation Act does just that. It supports innovators,
entrepreneurs, workers, and the economy with commonsense policy
solutions.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 1084, the previous question is ordered
on the bill, as amended.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
[[Page H9118]]
The SPEAKER pro tempore. The question is on passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. BUCHANAN. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question will be postponed.
____________________