[Congressional Record Volume 166, Number 164 (Tuesday, September 22, 2020)]
[Senate]
[Pages S5742-S5743]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                             Biden Tax Plan

  Mr. GRASSLEY. Madam President, last week, former Vice President Biden 
released his Presidential tax plan. I wish he would release the list of 
people he is going to put on the Supreme Court, like he said he was 
going to do in June. He hasn't done that, and, I think, yesterday, he 
said he wasn't going to do it, but we do have his high-tax plan.
  He has vowed to raise taxes immediately on U.S. businesses even 
though our country is recovering from the worst economic crisis since 
the Great Depression. Usually, when you are in that economic condition, 
you don't raise taxes, and the very last thing struggling Americans 
need, and particularly the businesses that create the jobs, is a 
massive tax increase at this time. Of course, Mr. Biden's tax plan 
shouldn't come as a surprise to anyone. His party seems to think the 
answer to every problem in America is to raise taxes and spend more 
money.
  When he was Vice President, the U.S. corporate tax rate was the 
highest in the industrialized world. It isn't now because of President 
Trump's tax proposals and the tax reform legislation we passed December 
2017. Prior to tax reform, U.S. companies were not competitive with 
their foreign counterparts. And there were constant headlines about 
companies that were moving their headquarters overseas, largely because 
of our outdated tax system.
  In fact, a number of Mr. Biden's proposals make me think that he is 
reliving his time as Vice President. His plan to increase the corporate 
tax rate from 21 to 28 would very quickly take us back to those days. 
Once again, this country would be saddled with the highest business tax 
rates in the industrialized world, taking into account Federal and 
State taxes in this country. U.S. companies, both large and small, 
would see higher taxes than their foreign competitors in France, 
Germany, the UK, and other major trading partners. In some cases, those 
taxes would be as much as 15 percentage points higher.
  Mr. Biden says our tax system encourages offshoring, profit shifting, 
and inversions. Back when he was Vice President, those things actually 
happened: offshoring, profit shifting, and inversions.
  When Mr. Biden was Vice President, the U.S. tax law allowed companies 
to defer their foreign earnings until they were brought back to the 
United States. Why would you bring them back when we had the highest 
tax rate in the industrialized world?
  That system allowed many companies to delay paying taxes on their 
foreign earnings, and in some cases, that could be indefinitely.
  As part of tax reform, we specifically sought to end the parking of 
profits overseas. We wanted that money to come home so that money would 
be invested in this country and would create jobs.
  That is why we enacted the tax on global intangible low-tax income--
or GILTI, as it is referred to--which imposes a minimum tax on foreign 
earnings in low-tax countries.
  And when Biden was Vice President, there were plenty of opportunities 
for what we call base erosion. That is why we created the base erosion 
anti-abuse tax--or the BEAT, as it is called--which targets deductible 
payments made to foreign affiliates. We also imposed limits on the 
deductibility of interest.
  Together, these policies addressed loopholes so companies can't erode 
the U.S. tax base and avoid taxes.
  While tax reform cracked down on notable abuses, it also had the 
positive effect of making the United States a far more attractive place 
to invest--not only for profits of U.S. companies coming home but for 
foreign investment in America as well.
  We created the foreign-derived intangible income rules to incentivize 
companies to keep intellectual property in this country, not abroad.
  We also allowed immediate expensing of investments to encourage 
companies to put their facilities and jobs here on U.S. soil. And 
President Trump has gone way beyond the new tax law to provide 
incentives to get industry back to this country.
  Now, Mr. Biden may be harkening back to 2014, but let's all remember 
that companies then were announcing

[[Page S5743]]

left and right their plans to invert or move their headquarters 
overseas, but since our 2017 Trump tax reform, I haven't heard of any 
companies with inversion plans. Quite the opposite, companies have 
called off inversions and even brought back operations to this country, 
and they are citing our tax reform as the main reason for doing it. So 
why would Mr. Biden want to undo that?
  Even more curious is that Mr. Biden's own talking points suggest that 
he supports a number of our tax reform policies in that 2017 bill.
  Kimberly Clausing, who reportedly advises Mr. Biden on tax policy, 
has said the Tax Cuts and Jobs Act ``should be commended for providing 
some limits on tax avoidance through the GILTI and the BEAT.''
  What is more, Ms. Clausing has estimated the new rules under the 2017 
tax bill will result in a 20-percent decrease in shifting profits 
overseas.
  That is consistent with the Joint Committee on Taxation's 
macroeconomic estimate in 2017 that found that tax reform would reduce 
profit shifting and increase the U.S. tax base.
  Nevertheless, Mr. Biden wants to double down on increasing taxes on 
U.S. businesses and, in fact, undo the progress that we have seen since 
tax reform in 2017.
  In addition to higher taxes on domestic earnings, he also wants to 
increase the rate on U.S. companies' foreign earnings to 21 percent. 
That is almost double the 12.5-percent rate that the OECD is targeting 
for its global minimum tax.
  I guess the former Vice President wants to ensure that no country can 
top the United States when it comes to the highest tax rates possible.
  And that is not all. Mr. Biden proposes an additional 10-percent 
penalty on goods and services imported by U.S. companies from foreign 
affiliates.
  Now, even the Washington Post editorial board noted earlier this 
month that Vice President Biden's policy simply ignores the reality of 
global supply chains.
  Do we, in fact, really want to encourage foreign countries to tax 
goods and services imported from the United States? That could be a 
slippery slope.
  The truth is, Mr. Biden is trying to fix problems from the last 
administration. Republicans already met that challenge, and tax reform 
of 2017 is working.
  Data from the Bureau of Economic Analysis clearly shows that tax 
reform stemmed the flood of offshoring, while encouraging U.S. 
companies to invest right here in the United States.
  In fact, among U.S. multinationals, employment investment, research, 
and production in the United States has increased at a faster rate in 
2018 than the average rate over the past 20 years--faster than the 
growth rate of U.S. multinational companies that are abroad.
  Of course, there is more work to be done. But tax reform has made 
this country a more attractive place for businesses to headquarter, 
invest, and create jobs.
  Now, if the former Vice President succeeds in his plans, it will not 
just be our businesses that will bear the brunt.
  The Joint Committee on Taxation and Congressional Budget Office have 
both concluded that 25 percent of the corporate tax is borne by 
workers. So workers will be hurt. They will feel the burden of the 
Biden plan thorough fewer jobs, through reduced wages, and through less 
benefits.
  Above all, the Biden tax plan ignores the reality of today. We are 
trying to see our way out of the global pandemic. Undoing the progress 
that we have made through tax reform, especially now, is certainly not 
a prescription for economic recovery and growth.
  What is more, the Vice President's plan will do nothing to speed the 
progress that we made reducing unemployment since the height of the 
pandemic. Instead, it will do just the opposite, work against it.
  The Biden tax increases wouldn't be good policy in the best of 
conditions, but they are certainly bad policy right now because of the 
economic hardship caused by the pandemic.
  If Mr. Biden really wants to keep living in the Obama era, he should 
recall President Obama's sound advice on tax policy during a crisis, 
the financial crisis of 2009 and 2010, when President Obama said this: 
``The last thing you want to do is raise taxes in the middle of a 
recession.''
  That is something we should all be able to agree upon.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arkansas.
  (The remarks of Mr. Cotton pertaining to the introduction of S. 4648 
are printed in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')
  Mr. COTTON. I yield the floor.
  The PRESIDING OFFICER. The Senator from New Jersey.