[Congressional Record (Bound Edition), Volume 163 (2017), Part 11]
[House]
[Pages 15221-15224]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               TAX REFORM

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2017, the Chair recognizes the gentleman from Maryland (Mr. 
Harris) for 30 minutes.
  Mr. HARRIS. Mr. Speaker, the gentleman from Texas is absolutely 
right. An important thing happened this week. We announced that the 
American public is going to get a tax cut.
  As I go around my district, as I am sure Members when they go around 
their districts, one thing they rarely hear is: You know, Washington 
spends their money very efficiently. They do everything just right. So 
why don't you tax me a little bit more?
  We don't hear that.
  What we hear is that hardworking Americans want to keep more of their 
paycheck. They look at what the Federal Government takes out of their 
paycheck. They don't think they are getting their money's worth. 
Honestly, Mr. Speaker, once you are around here a while, you realize 
they are probably not getting their money's worth.
  So what we are going to do is we are going to follow the President's 
lead. The President has said that what he wants is a tax reform bill 
that cuts taxes in America so that businesses come back to America, 
that our job creators get tax relief, and that hardworking middle class 
American families can keep more of their paychecks.

[[Page 15222]]

And that is exactly what the tax reform outline has laid out for the 
American public this week.
  Now, from the naysayers, you will hear the same old lines: tax cuts 
for the rich, blah, blah, blah.
  The bottom line is that we are going to relieve the tax burden on 
American businesses that will bring jobs back to this country.
  Mr. Speaker, if you look over the past 35 years of what has happened, 
from 1980 to 2015, the corporate tax rates, back in 1980, the top line 
of this graph is the U.S. tax rate, marginal corporate tax rate, which 
was around 50 percent at the time. It was just about the same as what 
the worldwide average was.
  In the 1980s, the last time we had major tax reform under the 
leadership of President Reagan, we dropped the corporate tax rate to 
under 40 percent, and at that time, it was right in the middle of where 
the corporate taxes were worldwide. So the companies had no advantage 
to take their businesses and move it overseas in order to save taxes.
  But something very interested happened. If you look at the top line 
here, since then, our corporate tax rate has stayed at right about 40 
percent. It is now 39.6 when you add in both the Federal taxes and the 
State corporate taxes, but the worldwide averages have fallen.
  Mr. Speaker, other countries around the world have figured out that 
businesses will go to countries and they will create jobs in those 
areas where the taxes are lower.
  So what has happened?
  So if you look at what the corporate taxes look like now and what the 
corporate tax rates are around the world, these are the 35 leading 
nations, our competitors in the world. The United States now has the 
highest corporate tax rate at 38.9 percent combined. Again, the Federal 
plus the State tax rate. France and Belgium, 34 percent. Germany, 30 
percent.
  But if you look at where we are losing our business to, it turns out 
that very small countries like Ireland, way down at the bottom, years 
ago lowered their corporate tax rate to 12\1/2\ percent.
  And what happened?
  We moved businesses to Ireland.
  When I worked in the operating room--and still do a few days a year--
I would pick up what is called an endotracheal tube. It is a tube we 
use when we breathe for a patient. It goes into their windpipe and they 
breathe through it. I would pick it up--and this happened 15 years 
ago--look at it and say: ``Wait a minute. This is made in Ireland. How 
in the world are medical items like this made in Ireland?'' And I would 
look at other items in the operating room, and they were made in 
Ireland.
  I didn't know at the time that the reason was that Ireland lowered 
its corporate tax rate, and literally many things that used to be made 
in the United States, like those endotracheal tubes, like other medical 
devices, were now made in Ireland; not by Americans, but by people in 
Ireland. We lost those jobs over there, and it was as a result of our 
corporate tax rate.
  So our other competitors, you know, we look at car manufacturers, 
Korea, 24 percent corporate tax rate. Again, ours is at 38.9 percent. 
We look at other places around the world. The United Kingdom, Britain, 
one of our largest trading partners and one that certainly competes 
with us for businesses, whether it is the pharmaceutical industry or 
whether it is other businesses, they are at 19 percent. We are at 38.9 
percent.
  So what does this tax plan do?
  This tax plan says that for those corporations that are moving 
businesses around the world based on a tax rate, we can't have the 
highest tax rate in the world, because what we have seen is the 
emptying of American manufacturing to places around the world where the 
tax rate is lower.
  Mr. Speaker, I would offer that if you or I invented something today 
and we looked to manufacture it somewhere, where would we go? Would we 
stay in the United States with a 38.9 percent combined corporate tax 
rate? Or would we go to Ireland, where it is 12\1/2\ percent, where, 
for every item we make, our company can make more money, invest that 
back in the company and take profits from it?
  Of course we would go to Ireland.
  So what do we have to do?
  We have to address that. The President has said this is one of his 
top priorities, because this will bring back the jobs that have bled 
from the United States.
  When we looked at what is called a corporate inversion, where a 
company looks to buy an American company, move its headquarters 
overseas, it is doing it for tax purposes.
  Why should that happen? Why shouldn't we be attracting these 
companies to the United States? How do we do it?
  We do it by lowering the corporate tax rate. The plan, the outline 
that we have put forward to the American people this week lowers the 
corporate tax rate to 20 percent. Again, from 35 percent, which is the 
Federal rate, to 20 percent. It lowers it to the lowest among our 
competitive countries. Now, not as low as I would like to see it go, 
not as low as the President would like to see it go. The President 
thinks we need to be way down at the bottom of that chart. That is how 
we need to attract businesses back.
  Mr. Speaker, to be honest, if we lower the tax rate just to be 
competitive, we are not competitive anymore. Companies will bring their 
business back to the United States for the reasons that a lot of 
businesses originally were in the United States: we have a highly 
trained workforce, we have the rule of law, we have a lot of benefits 
for businesses to do business here.
  Now, if Congress agrees, if we can come up with this reform plan, we 
are going to be seeing businesses fighting each other to come back into 
the United States because they realize this is the place they can do 
business best.
  Mr. Speaker, only a minority of jobs are actually produced by those 
large corporations, what we call C corporations, the ones that paid the 
``corporate income tax.''
  So the President said he also wanted to emphasize that what we need 
to do is lower the tax rate on our small businesses because, as you 
know, almost two-thirds of the jobs created in this country are created 
by small businesses.
  So the Unified Tax Reform Framework, our tax plan, limits the maximum 
tax rate for small and family-owned businesses to 25 percent. Mr. 
Speaker, today that tax rate is 39.6 percent. Again, this will allow 
these small businesses and our family-owned businesses to take the 
money, invest it; and then when their businesses make money, when they 
hire workers and they make money, they are allowed to keep more to put 
back in those businesses, to hire more workers. This is how we get our 
economy going again.
  If you talk to, again, these small businesses and these family-owned 
businesses, or the larger businesses, there are two things that these 
businesses say they need in order to succeed. One is they need a 
regulatory environment that is reasonable.
  Mr. Speaker, the last administration was strangling American 
businesses through overregulation. So the first thing the President did 
when he came into office, to his credit, is say: We have to have only 
reasonable regulations. We can't overregulate our businesses. We are 
stifling them.
  Mr. Speaker, it is amazing that over the past 100 years, the average 
growth in what we call the GDP--the gross domestic product--in the 
United States, the average growth in GDP is 3.3 percent over 100 years.
  Now, over the last administration, of course, you know it has the 
dubious honor of being the first administration where there was never a 
year of 3 percent growth. In fact, the average growth was under 2 
percent. The mood was so bad in American business and the American 
business climate that the economists who would predict how the economy 
was going to operate have actually lowered their expectations of GDP 
growth to under 2 percent per year for the near future. That is not the 
America we know.
  The America we know leads the world. When we see 6, 7, and 8 percent 
growth in China, why would we be satisfied with under 2 percent growth?

[[Page 15223]]

  There is no need to be satisfied with that.
  So we have to go to, again, our small businesses and our other 
businesses and ask them: What do you need to grow and produce jobs, to 
bring jobs back to this country, to put Americans back to work?
  And the answer is: One, relieve us of the regulatory burden.
  And from day one, that is what the President has done.

                              {time}  1430

  But there is another thing they say. We need relief from our tax 
rate. Again, the tax rate was the highest in the industrialized world. 
Our tax rate, the highest in the industrialized world. Our tax rate on 
small businesses was even higher. 39.6 percent was the highest marginal 
rate. That is not an environment where businesses thrive.
  The President is taking care, to a large extent, of relieving the 
regulatory burden, the over-regulatory burden, that exists for American 
businesses.
  Now Congress needs to turn its attention to the second leg on that 
stool, which is the tax problems. So the reform framework does that, 
and it does it exactly the right way. It says we agree with the 
President.
  Americans are waiting for these jobs to come back. They don't want to 
see the back end of the moving van leaving American companies and 
bringing them overseas anymore. They don't like that. I can't blame 
them. There is no reason why more things can't be made here, more 
businesses can't thrive here.
  So we need to take those steps, but that is only one part of this 
plan. The President said the other thing we need to do is return more 
dollars into the pockets of hardworking middle class taxpayers. That is 
exactly what this plan does. It does it by simplifying the Tax Code, by 
doubling the standard deduction and lowering all the rates.
  The naysayers will say: Well, you know, if you lower the rates, you 
are going to increase our debt and our deficit. In fact, if you turn on 
the TV right now, that is what all the talking heads are complaining 
about. How could those Republicans suggest a plan that will increase 
our deficit?
  Well, Mr. Speaker, if you ask some people over at the Congressional 
Budget Office what happens to revenues if you increase the tax rate to 
200 percent of income, they will say: Oh, it goes up 200 percent.
  Well, that is ridiculous. At some point, overtaxation suppresses 
economic activity, and revenues go down.
  Conversely, both with the tax cuts under President Kennedy in the 
1960s and the tax cuts with President Reagan in the 1980s, what we saw 
when we lowered rates was, in fact, the rejuvenation of the American 
economy, a stimulation of our GDP, a stimulation of our economy, 
leading to, in fact, increased revenue in both of those instances.
  But in both of those instances, the naysayers said: You can't do 
this. If you are going to cut your taxes, your deficits will go up. 
That just plain doesn't happen.
  So, yes, if you assume, all else being equal, that if we lower tax 
rates that revenue will go down, that would be true. But we know what 
happens when the American people feel the economy is going well, when 
they are fully employed, when we bring good-paying jobs back to this 
country and we lower the tax burden directly on hardworking middle 
class Americans. We know what happens. The economy grows.
  With more money in their pockets, people make the decision to buy a 
car, to buy a house, to buy the new washing machine, to spend money on 
things that they have been afraid to spend money on because of the 
stagnant economy over the past 8 years.
  We will unleash growth like we haven't seen since the 1980s, when, in 
response to the Reagan tax cuts, we had GDP growth not of 3 percent, 
not of 4 percent, but of 5 and 6 percent after that tax cut. So, in 
fact, tax cuts stimulate the economy, which lifts all boats, and it 
increases revenues.
  So, Mr. Speaker, we have to tackle this challenge.
  Now, we know there are a lot of special interests there because, when 
you simplify the Tax Code, what happens? All the lobbyists come 
knocking on our doors, and they want to maintain their little piece of 
this Tax Code.
  And the Tax Code runs to thousands and thousands of pages. Very 
knowledgeable people can't even fill out their tax returns anymore, 
they are so complicated. Or they are worried they filled it out wrong.
  Or, Mr. Speaker, the best thing--or the worst thing--the funniest 
thing that I hear is that, if you have a tax question and you can't 
figure out exactly how to do it and you call the IRS, if you call two 
or three times, you are likely to get two or three different answers 
about how to fill out that form and how much tax you have to pay.
  Well, when you get to that situation, you have gone way too far, and, 
Mr. Speaker, that is where we are. We are at that situation that a 
reasonable American can't even fill out their own taxes it has become 
so complicated.
  So, as part of this framework, if we can simplify it the way this 
framework says, 90 percent of Americans will literally be able to fill 
out their taxes on something the size of a postcard. That is what we 
need to get back to, that kind of simplification.
  But again, the road won't be easy because we will have all the 
special interests here in this town, and we know there are a lot of 
them. We will have all of those special interests knocking on our 
doors, saying: Please preserve our little carve-out.
  But every little carve-out makes the Tax Code more complicated. Every 
complication means that hardworking Americans don't get to keep as much 
in their pockets, and that is what we have to solve. We have to solve 
this problem. It has been getting worse now.
  Again, the last time we dealt with the Tax Code in a comprehensive 
way was 30 years ago. To its credit, at the time, we reduced rates, we 
stimulated the economy, but we really didn't simplify the Tax Code as 
much as we would like to at this point.
  So it is going to be hard, it is going to take months, and it is 
going to take a lot of people looking past the naysayers, past the 
people who say this can't be done, past the people who say the sky is 
falling, because we have heard this all before.
  I am old enough to have heard it in the 1980s. That is when I started 
working. That is when I started bringing home a paycheck. That is the 
time when I started realizing what Federal taxation was.
  I always tell the story of my oldest daughter, who trained to become 
a nurse, and she went and got hired. The first time she brought her 
paycheck--a real paycheck, a full-time job paycheck from the hospital--
home, she said: Dad, what is going on here? I thought I was making this 
amount of money, and this is the amount I bring home.
  We all know what happened. You saw all those lines: The Federal tax 
taken out; the State tax taken out; the local tax taken out; the Social 
Security tax taken out; the Medicare. You saw all the taxes that were 
taken out.
  So what we have to do is we have to simplify the Code, bring those 
tax rates down, put more of that money in the pockets of hardworking 
middle class Americans. We owe them that. Part of that is simplifying 
that Tax Code. Now, once we do this and we stimulate the economy, we 
get the economy going again, our deficits will come down.
  Look, we have to control spending. There is no question about it. 
Spending in this town is out of control. There is no question about it. 
Our deficit will exceed $700 billion a year.
  To put that in perspective, that is 20 times the size of my State's 
entire budget, and that is the amount that we are going to borrow this 
year.
  When people say that we need money for this and we need money for 
that, every time we ask that question, you know, can we afford it, we 
have to ask: Can we afford passing this debt on to future generations?
  I have five children, now, six grandchildren. My children will never 
pay off this debt. Those listening at home, if they don't believe me, 
go and look at the Federal Budget website and look at

[[Page 15224]]

the projection of Federal debt. It never goes to zero. It never, ever 
goes to zero--ever--not in my children's lives, not in my 
grandchildren's lives, not in my great-grandchildren's lives. That is 
just not the way we ought to run a government.
  So once we tackle this tax reform, once we get our economy booming 
again with businesses vying to come into this country--not to go to 
some other country, but to come into America to do business--then we 
have to turn our attention to securing the future for future 
generations, to making certain that our Social Security system, which 
our seniors depend on, will not only be here for the seniors now, but 
for when my children and grandchildren reach their old age; that the 
Medicare system, which is scheduled now to be bankrupt in 10 years, 
that the Medicare system that our seniors depend on will not be there 
just for my generation, not just for my children's generation, but for 
my grandchildren.
  We have to make sure that this country remains the strongest, most 
powerful country on Earth, a force for good and freedom throughout the 
world. We have to restore our defense budget. This President, to his 
credit, has called for that.
  But as we restore our defense budget, we do have to redefine our 
spending priorities, because we don't--or, I guess, maybe we do, print 
money here, but it is not the right thing to do. We shouldn't be 
borrowing from future generations to take care of these priorities.
  We have to get our economy going, make sure our revenues increase, 
and then turn our attention to making sure those revenues are spent 
wisely and that we define the future for our children and 
grandchildren, a future that they can be proud of in a country that 
remains, as Majority Whip Scalise said on this floor today, standing at 
this podium, a country that the world can look toward for leadership, 
the country that, for now over a century, the world has looked toward 
for leadership to be the beacon of freedom, to be what President Reagan 
called the ``shining city on the hill.'' Mr. Speaker, we do that by 
restoring the health of our economy.
  We took a big step toward that this week with our tax reform 
framework. We are setting the country up for an economic rejuvenation, 
for a restoration, for those companies that have gone overseas to come 
back home. Let our great American workers make their products. Come 
back home to the greatest country this world has ever known.
  Mr. Speaker, that was a big step, but it is only the first step. We 
have weeks and months of work to get that done, a big job, an important 
job, but the first step was taken this week.
  Mr. Speaker, I yield back the balance of my time.

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