[Congressional Record (Bound Edition), Volume 160 (2014), Part 11]
[House]
[Pages 15229-15232]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  2100
                         UNITED STATES TAX CODE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2013, the Chair recognizes the gentleman from Georgia (Mr. 
Woodall) for 30 minutes.
  Mr. WOODALL. Madam Speaker, I appreciate the recognition. I 
appreciate you staying with me into the evening tonight.
  I wish I could tell you I was bringing you good news, but I am 
bringing you some bad news. It is bad news that you have already heard. 
I have the most recent Tax Foundation rankings of international tax 
competitiveness.
  We talk so much about jobs and the economy. We talk about how to make 
a difference in the lives of middle class families. We talk about jobs 
that are moving overseas. We talk about whether or not we are going to 
grow this economy. This is the ranking of the most competitive Tax 
Codes in this country.
  I want you to think about, Madam Speaker, what those things are that 
we can do to be more competitive in this country.
  We could lower everyone's wages. That would make it cheaper to build 
things in this country. I think that is an awful idea.
  We could ignore environmental regulations. That would make things 
easier and cheaper to build in this country. That is an awful idea.
  One of the things we could do, though, is deal with our tax system, a 
tax system that, so says the Tax Foundation, is the 32nd worst tax 
system of the 34 OECD countries--32nd worst in tax competitiveness.
  Now, they are looking at everything. They are looking at individual 
taxes. They are looking at corporate taxes. You go way over here on the 
end, Madam Speaker, you get to the international tax rules rank. That 
is how well we work with the rest of the world with our tax system. 
America ranks dead last.
  Why do I bring that up, Madam Speaker? I bring it up because I am 
reading from our Treasury Secretary, Jack Lew, his comments at the 
Urban Institute last week. He's talking about American corporations 
moving their headquarters overseas. Not moving a factory overseas, but 
moving their international headquarters overseas. And he says this:

       This practice allows the corporation to avoid their civic 
     responsibilities while continuing to benefit from everything 
     that makes America the best place in the world to do 
     business.

  Worst place in the world to do business, that is what the Tax 
Foundation tells us.
  I read on from Jack Lew's speech. He said:

       The best place in the world to do business: our rule of 
     law, our intellectual property rights, our support for 
     research and development, our universities, our innovative 
     and entrepreneurial culture, our skilled workforce.

  Again, speaking about the practice of moving your headquarters 
overseas, he says:

       This may be legal, but it is wrong, and our laws should 
     change. By effectively renouncing their citizenship, these 
     companies are eroding America's corporate tax base.

  That means all other taxpayers will have to shoulder their 
responsibility.
  I go again to a Tax Foundation chart, Madam Speaker. It is a chart of 
what the rate is. And you can't see what the individual corporate tax 
rates are, but what you can see is the green lines here. That is the 
average corporate tax rate. Around the world, it is 25 percent.
  You see another green line, that is the weighted average by the size 
of the economy. That of course gives more weight to the larger 
economies on the planet. That goes up to 29 percent.
  And at the bottom of this chart, Madam Speaker, you see in red the 
United States of America, with the absolute highest corporate tax rate 
in the world. By our own design--and I say ``our own.'' I have not 
gotten to vote on a corporate Tax Code, Madam Speaker, since I have 
been in this Chamber for 3\1/2\ years, but by our design as a nation we 
have created the absolute worst place to do business on the entire 
planet.
  Our Treasury Secretary calls companies who observe that and make 
changes because of that so that our grandmothers and our grandfathers 
and our pension programs and everyone who relies on the success of 
those companies in order to meet their fixed income demands so that 
those companies can succeed, he calls that a shirking of civic 
responsibility.
  I am on the floor tonight, Madam Speaker, to suggest that it is not 
those companies that observed that America is the worst on the planet 
and move elsewhere that are shirking their responsibilities. It is 
those of us in this Chamber, those of us on Capitol Hill, those of us 
in Washington, D.C., who are responsible for this corporate tax road, 
it is we who are shirking our civic responsibilities because we can do 
better.

[[Page 15230]]

  I know it is getting late, Madam Speaker, and I hate to take you 
through the math, but when we talk about tax codes and why they are so 
bad, it is the math that matters. This is the tax liability for a 
corporation doing business in the United States of America.
  Let's say you earned $1,000. You are going to pay a 35 percent rate. 
You are going to add State taxes to that rate as well. It is going to 
be about 39.1 percent, on average, about $391 out of every $1,000. So 
at the end of the day, you are going to be able to take home $609 to 
pay your salaries, to invest in your business, to grow your company--
$609. That is an American company doing business in America.
  How about a Canadian company doing business in Canada? Same $1,000 
worth of income. They are paying a 15 percent tax rate at the national 
level. They are also having a provincial tax rate added to that, totals 
to about 26.5 percent, $265. They are taking home $735.
  You earn $1,000 worth of income as an American company doing business 
in America, you take home $609. You earn $1,000 in income in a Canadian 
company doing business in Canada, you take home $735.
  I know what you are thinking, Madam Speaker. You are thinking that's 
apples to oranges. One is doing business in America; one is doing 
business in Canada. Let's look further.
  Let's say we take those same two companies, that one American 
company, that one Canadian company, and let's say they are both doing 
business in the United States of America. They earn $1,000. They pay 
$391 in taxes. They are at the highest corporate tax rate in the world. 
That American company takes home $609.
  Go to the Canadian company doing business in America. They earn that 
same $1,000. They pay that same highest corporate tax rate that America 
has, the highest in the world. They take home $609. Whether you are the 
U.S. company or the Canadian company, you do business in America, you 
pay the same tax.
  I know what you are thinking, Madam Speaker. You are saying, Well, 
what is the argument here? What is the issue that we have to come 
together and solve? It is this issue right here, Madam Speaker.
  Let's say you are not doing business in America. Let's say you are 
doing business in Canada. We are going to take that same American 
company, we are going to take that same Canadian company, and we are 
going to look at what happens when they are doing business in Canada.
  That American company earns $1,000. It pays the Canadian Government 
$265. The Canadian company raises $1,000, and they pay the Canadian 
Government $265. But it is what happens next that makes America one of 
the worst tax codes in the world.
  When you try to bring that $735 you have left over back to America, 
you pay American taxes on top of what you have already paid Canada.
  So the U.S. corporation doing business in Canada earns $1,000; they 
end up with $650 at the end of the day. The Canadian company doing 
$1,000 worth of business in Canada pays their taxes, ends up with $735 
at the end of the day. That is why companies are moving overseas. They 
do exactly the same business in exactly the same place as all of their 
international competitors, but simply because their headquarters is 
based in America, they pay more.
  The power to tax is the power to destroy. And because of the way we 
have chosen to tax our companies, a methodology that has been rejected 
by most of the rest of the world, we punish every single company that 
chooses to stay in America employing Americans.
  We have been talking about it in terms of Burger King and Tim 
Hortons. I don't know if you are a Burger King fan, Madam Speaker. I 
don't know if you are a Tim Hortons fan. I love them both. I love them 
both. And the suggestion has been made that when Burger King and Tim 
Hortons are going to get together and the headquarters is going to be 
located in Canada instead of America, that that is somehow an 
unpatriotic decision being made by Burger King.
  I want you to see the revenue by category that this new Burger King-
Tim Hortons merger is going to have. This acquisition by Burger King is 
going to have about 20 percent of the revenue coming from America, 
about 67 percent of the revenue coming from Canada, about 13 percent 
coming internationally.
  I go back to this chart, Madam Speaker, where I said, What if you are 
doing business in Canada? If you are an American company, you take home 
less, not a little less, but more than 10 percent less. If you are a 
Canadian company, you take home more. Same amount of business, same 
country of business location, but because your headquarters is 
somewhere different, you take home less money.
  Well, if you are Burger King and you are in this Tim Hortons 
acquisition, you are making most of your money in Canada, so what are 
you supposed to do?
  If I ask the White House, they would tell me I am supposed to stay in 
America and put up with the absolute worst Tax Code the country has 
ever seen, this country has ever seen, but also the worst tax code 
anywhere on the planet.
  This is America for Pete's sakes. We can do better.
  It is not that Burger King is choosing to leave America; it is that 
America is running Burger King out. And that, that responsibility lies 
with us here in this Chamber.
  It is an arcane issue called a worldwide tax system versus a 
territorial tax system. When you are in a worldwide tax system--and 
there are only seven countries left in the world that do this--you 
double-tax your companies. You charge them a tax based on the country 
in which they earned the money, and then if they bring that money back 
to America, you charge them another tax on top of that.
  Most nations on this planet, most nations with First World economies, 
they use what is called a territorial tax system. That means whatever 
country you raise the money in, you pay the tax in; and when you bring 
that money back to your home country, you are not double-taxed one more 
time.
  This is the issue we ought to be talking about. We shouldn't be 
talking about patriotism. We should be talking about common sense as it 
relates to having America compete in a global economy.
  I ask you, Madam Speaker, if we have the absolute worst tax code in 
the world, if we have the absolute highest corporate tax rate in the 
would, if we have the least competitive international tax system in the 
world, what do you think is going to happen to international businesses 
when they make their decision about whether or not to locate in 
America? They decide no. They decide no.
  Madam Speaker, I want to talk just a little bit about what President 
Obama has said. It is called corporate inversion. When you move your 
headquarters from America, you acquire a different company overseas, 
you make that your international headquarters, it is called a corporate 
inversion. You may have seen that in the news. Here is what President 
Obama had to say about it:

       Even as corporate profits are higher than ever, there is a 
     small but growing rube of big corporations that are fleeing 
     the country to get out of paying taxes.

  Fleeing the country to get out of paying taxes.

  President Obama goes on. He says,

       I say ``fleeing the country,'' but they are not actually 
     doing that. They are not going anywhere. They are keeping 
     their business here, but they are moving their headquarters. 
     They don't want to give up the best universities, the best 
     military, the advantages. They just don't want to pay for it, 
     so they are technically renouncing their U.S. citizenship.

  Well, that sounds very similar to what I read from Jack Lew a little 
bit earlier. That is the party line coming out of the White House.
  I go on. President Obama says:

       These businesses are playing by the rules, but these 
     companies are cherry-picking the rules and it damages our 
     Nation's finances. It makes it harder to invest in things 
     like job training.

  He says:

       I am not interested in punishing these companies, but I am 
     interested in economic patriotism.


[[Page 15231]]


  As a government, we have crafted the most punishing tax code on the 
face of this Earth. We have created the longest list of disincentives 
to locate your business in our country that is available anywhere on 
the planet today. And the question the President is asking is: I don't 
want to punish these companies, but where is their economic patriotism?
  Madam Speaker, where is our economic patriotism? The Tax Code is 
something we created. Do you believe for a moment if the 435 of us in 
this Chamber got together to write the Tax Code today we would write 
the absolute worst tax code available anywhere on planet Earth? I don't 
think so. If we designed this Tax Code from scratch, we would have done 
something very different, but this is where we would have ended up.
  I will close with this from the President:

       Now, the problem is this loophole. They are using it in our 
     tax laws, but it is actually legal. My attitude is I don't 
     care if it is legal; it is wrong.

  I don't care if it's the law of the land, I don't care if it's the 
law, they shouldn't do it anyway.

                              {time}  2115

  When I think about the law, Madam Speaker, I don't know where you go, 
but I go to the courts for answers. And it is interesting that this 
idea of economic patriotism--this isn't the first time we have heard 
it--it has been argued in court time and time again.
  I quote from the Second Circuit, affirmed by the Supreme Court:

       Anyone may so arrange his affairs that his taxes shall be 
     as low as possible; he is not bound to choose that pattern 
     which best pays the Treasury. There is not even a patriotic 
     duty to increase one's taxes.

  We have had the suggestion: economic patriotism, you should pay more, 
you should pay more. It is not our fault, it is the Congress; it is not 
our fault, it is the government; it is your fault as the job creator 
out in America, you should be doing something different.
  We saw this again, another Second Circuit case:

       Over and over again the courts have said that there is 
     nothing sinister in so arranging one's affairs as to keep 
     taxes as low as possible. Everybody does so, rich or poor 
     alike, and all do right. For nobody owes any public duty to 
     pay more than the law demands. Taxes are enforced 
     extractions, not voluntary contributions. To demand more in 
     the name of morals is mere cant. Taxes are extractions, not 
     voluntary contributions.

  Madam Speaker, I want to say to all of my colleagues, everybody in 
the administration: If you don't believe you are paying enough in 
taxes, we can give you an address to the Treasury Department where you 
can mail your check. Taxes are extractions. If you are interested in a 
voluntary contribution, I can tell you where to mail your check.
  Tax law exists to provide certainty, not just certainty to employers, 
but also to investors, also to entrepreneurs, also to families, also to 
employees, to those folks who show up to work day in and day out. The 
law provides us with certainty.
  We, as a government, have created the worst tax environment on the 
planet in which to do business, and the leader of our government wants 
to blame the companies that have stuck with us day in and day out for 
the last 50 years. The wonder isn't that companies are leaving us 
today, Madam Speaker; the wonder is that companies didn't leave us long 
ago. It is a punishing environment to do business in America.
  So what is the solution? Because, Madam Speaker, you know I am not 
going to come down here and identify a problem and not talk to you 
about how to solve it. But before I get to my solutions, I want to talk 
to you about President Obama, whom I have quoted tonight; what 
Secretary of Treasury Jack Lew, whom I quoted tonight, what they have 
to say about the solution, and it is this: the best way to level the 
playing field is through tax reform that lowers the corporate tax rate, 
closes wasteful loopholes, and simplifies the Tax Code for everybody. I 
am with him 100 percent--with him 100 percent. What the President has 
said here, I support 100 percent.
  That is not what he is saying on the campaign trail. On the campaign 
trail he is saying: any business that tries to do what is best for its 
employees, what is best for its shareholders, and what is best for its 
customers is unpatriotic. If they choose to try to improve the lot of 
their customers, their shareholders, and their employees that somehow 
there is an obligation to subject yourself to what this Congress and 
this White House, this country, has created, a monstrosity of a tax 
code.
  Maybe Jack Lew had a different idea as Treasury Secretary. He says:

       Only tax reform can solve the problems in our Tax Code that 
     lead to inversions.

  I know what you are thinking, Madam Speaker. You are wondering if I 
brought the wrong slides to the floor tonight. You are wondering if I 
made some sort of terrible mistake. Because I have been talking about 
how President Obama said it was unpatriotic, how he said it was their 
fault, how he said they ought to fix it, they ought to stay. And Jack 
Lew said it is their fault, they have a duty, they ought to fix it, and 
they ought to stay.
  No. These are the very same men saying something entirely different. 
Because they know, not on the campaign trail, but in the serious rooms 
where they are talking about serious policy, that the only way to take 
America into this next century, the only way to make us the most 
competitive Nation on the planet, the only way to get those jobs back 
in America, back from overseas, is fundamental Tax Code reform.
  Burger King can't do fundamental Tax Code reform, only the Congress 
can. Tim Hortons can't do fundamental Tax Code reform, only the 
Congress can. Warren Buffett can't do fundamental tax reform, only this 
Congress can. We can and we should. In fact, our Ways and Means 
chairman, Dave Camp, Madam Speaker, has tried.
  Let me go on and just get the other side of the issue from folks here 
on Capitol Hill. I quoted folks in the White House and the 
administration. House Speaker John Boehner says this, talking about all 
these statements about unpatriotic behavior:

       Instead of dividing people for political advantage, the 
     President can endorse our push for comprehensive tax reform 
     or convince Senate Democrats to act. Let's solve the real 
     problem here.

  Because it is the real problem here: the worst tax code on the 
planet. We have done this to ourselves.
  House Ways and Means chairman, Dave Camp:

       Everyone agrees that tax reform is the only solution that 
     will both keep companies from moving their headquarters out 
     of the United States and, more importantly, encourage more 
     businesses to grow, hire, and increase wages for American 
     workers.

  Folks, that is what it is about: grow, hire, increase wages for 
American workers. It is not about passing a mandatory minimum wage. 
That is going to kill jobs. It is going to increase some people's 
salaries at the expense of others. It is not about doing away with 
environmental protections. We support environmental protections.
  Obviously, there are some regulations that make no sense, but those 
regulations that protect us, we need those. It is not going back to the 
time when rivers were on fire and our environment was at risk. The 
answer is in fundamental Tax Code reform so that we can grow, so that 
we can hire, so that we can increase American wages.
  And over on the Senate side, Chairman Ron Wyden, Democratic Senate 
Finance Committee Chairman Ron Wyden, says this:

       America should not be part of a race to the bottom. It is 
     clear that America must establish a more efficient and 
     competitive corporate tax rate.

  People wonder why it is we can't get things done here, Madam Speaker. 
You and I wonder why it is we can't get more done. It is because when 
folks are on the campaign trail, they tell one story. They tell a story 
that divides us. They tell a story that tells us who to blame. They 
tell a story about the big corporations who happen to provide a lot of 
jobs to a lot of American families. But that is not the story they 
tell. They tell the story of greed and perversion in the Tax Code.
  But when they get down to serious policy conversations, when they get 
off

[[Page 15232]]

the campaign trail and start talking about what really makes a 
difference, they all agree fundamental tax reform makes the difference.
  Now, how are we going to get there? We have seen the shenanigans that 
go on that prevent us from going there, we have seen the desperate need 
that requires that we get there. How are we going to get there?
  Well, Madam Speaker, the President's Council on Jobs and 
Competitiveness has been clear on this topic. This is President Obama's 
Council on Jobs and Competitiveness:

       We have to view our corporate tax rates as part of our 
     national package for attracting job-creating investment.

  I will give you a hint, Madam Speaker. If you want your corporate tax 
rates to be part of a package for attracting jobs in national 
investment, you don't want them to be the worst in the world, you want 
them to be the best in the world. The President's Council knows this.
  Our system of corporate taxation hurts business competitiveness and 
American workers and it cries out for reforms. The President's Council 
says our corporate Tax Code hurts American workers and business 
competitiveness. They don't conclude that businesses are evil and 
greedy and out to stick it to American taxpayers. They conclude that 
businesses are struggling and trying, but it is our Tax Code that is 
the albatross around their neck:

       A growing body of research also shows that in a world of 
     mobile capital, workers bear a rising share of the burden of 
     the corporate income tax in the form of reduced employment 
     opportunities and lower wages.

  Madam Speaker, I am going to read that again, because we don't have 
that conversation enough. These are not my words, these are the words 
of the President's Council on Jobs and Competitiveness:

       A growing body of research also shows that in a world of 
     mobile capital, workers bear a rising share of the burden of 
     the corporate income tax in the form of reduced employment 
     opportunities and lower wages.

  The United States of America, worst international competitiveness 
anywhere on the planet, worst international tax code anywhere on the 
planet. The United States of America, highest corporate tax rate 
anywhere on the planet, largest disincentive to do business anywhere on 
the planet.
  The President's Council on Jobs and Competitiveness:

       These giant corporate tax rates don't punish corporations, 
     they punish American workers.

  My friends, Madam Speaker, we don't have corporations that pay taxes, 
we have corporations that raise prices. We don't have corporations that 
pay taxes, we have corporations that lower wages. We don't have 
corporations that pay taxes, we have corporations that lower return on 
capital. Corporations don't pay taxes, they collect taxes. They collect 
them from the people who buy their products, they collect them from 
their employees in those lower wages, they collect them in lower 
returns to capital--their shareholders, our seniors on those fixed 
incomes. High corporate tax rates don't punish corporations, they don't 
punish employers, they punish employees, they punish middle class 
American families.

  Madam Speaker, the President's Council recommended a move to that 
territorial tax system I talk about. They recommended eliminating this 
vestige of an older time where capital was not so mobile, a vestige 
only seven countries in the world still use. We are the largest economy 
to still use it. It disadvantages us more than it does anybody else. 
The President's Council recommends eliminating that territorial tax 
system, not double-taxing. It says:

       The current worldwide system makes investing . . . in the 
     United States more expensive from a tax point of view than 
     reinvesting them abroad, where they are not subject to 
     additional corporate income tax.

  Think about the lunacy of that, Madam Speaker. In the name of so-
called ``helping the American economy'' by bringing in more revenue 
through higher tax rates, what we do to American companies is 
discourage them from bringing money home and investing it here, and 
instead encourage them to keep the money overseas and invest there.
  I don't know what you are thinking of when you are thinking of 
investment. I am thinking of building a new factory, I am thinking of 
expanding productivity of your workers, I am thinking of those things 
that grow economies.
  The President's Council says our Tax Code encourages those things to 
happen for other people's citizens. I want to encourage those things to 
happen for our citizens. Corporate tax reform is the answer.
  Madam Speaker, I am going to close in a place that makes me happy. I 
told you I had bad news when I got down here to start. I did have bad 
news. The bad news is we have tied one arm of the American economy 
behind America's back. We have burdened ourselves with the worst Tax 
Code the world has ever seen, and we are demanding that American 
companies follow our disastrous model or else face the accusation that 
they are somehow unpatriotic. That has been the White House's solution 
to a slow economy and rapid job deterioration.
  Madam Speaker, what you can't see on this poster is Ronald Reagan's 
solution to some of those very same challenges. Because when he was 
elected in 1980, he faced some of those very same economic challenges 
that we are facing here today. And Ronald Reagan came together with the 
U.S. House of Representatives, led by Democrats, and passed fundamental 
tax reform for the last time it was passed in this country--1986--last 
large tax reform that we had in this country. They said he couldn't do 
it. They said he couldn't do it, Madam Speaker. They said it was too 
big.
  He did two things that this White House, this administration, has not 
done, and that I implore them to do, Madam Speaker--two things.
  Number one, he didn't just talk about it, he released a proposal of 
his own. He didn't just release one proposal, his Treasury Department 
released two proposals. Our Treasury Department giving speeches on why 
it is a corporation's fault, Ronald Reagan's Treasury Department 
offering solutions; two entire fundamental tax reform proposals for the 
Congress to examine, improve, and pass.
  Ronald Reagan said this, Madam Speaker. He said:

       Just as sure as Ruth could hit home runs and Rose can break 
     records, during this session of the Congress, America's tax 
     plan will become law. But it's going to take all of us and 
     all of you letting the folks in Washington know that you want 
     this change made.

  He led, Madam Speaker. I thank you for your leadership, I ask my 
colleagues for their leadership, and, together, we can make sure that 
American jobs come first and the American economy is first in the 
world.
  With that, Madam Speaker, I yield back the balance of my time.

                          ____________________