A moment with the Congressman
A hearing on tax reform
As a business owner for over 30 years, two of the most important things I’ve learned are that you have to plan for success and be receptive to feedback. Now that Congress is talking in earnest about tax reform, I’ve repeatedly asked over the last several months for hearings so Congress can get feedback from stakeholders and tax experts on what meaningful reform looks like. We need to implement a tax system that doesn’t pick winners and losers and gets America’s economy moving again, and to do that, we must ask for input and feedback on the numerous proposals that have been raised in the last year. I was pleased to see that last Wednesday, the House Ways and Means Committee held the first in a series of hearings on tax reform. While each of our witnesses spoke to different problems of our tax code, there were several unifying themes present in their testimony and in statements by committee members, regardless of their party.
First, tax reform is desperately needed. The last time Washington overhauled the tax code was in 1986. As one witness excellently put it, we have a 20th century tax code for a 21st century economy. There is a cost to doing nothing. If we don’t act, jobs will continue to leave and economic opportunity will remain elusive for many.
Second, rates need to come down. In the context of the corporate rate, we were once competitive when compared to other developed countries, but in the last 30 years, corporate tax rates in these countries have, on average, fallen from 35 percent to 20 percent. The U.S., on the other hand, still has a 35 percent rate that is higher than almost every country in the world. We can’t compete if we’re running in last place.
Third, we have to look out for the little guy too. One criticism levied at lowering the corporate tax rate is that it’s a giveaway to big business, but as I’ve always said, businesses don’t pay taxes. People do. When we raise rates on businesses, they pass that price on to their customers and workers through higher prices and lower wages. One of our witnesses testified to this and reminded committee members that workers can bear up to 75 percent of corporate tax burdens through lower wages.
One of my colleagues mentioned that we need to look out for middle- and working-class Americans as we consider tax reform. I couldn’t agree more. I brought up the story of a 24-year-old who came from a working class family and started his own business. He couldn’t take a paycheck at the start. As soon as he started to make a profit, he needed to set aside enough to cover taxes before he could pay the other hard-working Americans he hired to help him run his business. It started to grow, but he soon found himself unable to maintain that growth because of the tax burden placed on his business. When growth slowed, hiring came to a halt, which meant no new jobs were being created. These are the people we need to keep in mind as we move forward. Cutting the corporate tax rate isn’t just a giveaway to big business. It’s a ticket to opportunity to Americans looking to grow their business, live the American Dream and give jobs to their neighbors. I would know because 33 years ago, that 24-year-old was me.
In the coming months, we’ll continue to have hearings on tax reform and have discussions with our colleagues, businesses and our constituents. We can’t rush headlong into tax reform if we don’t lay the groundwork for successful reform. We have to get input, draft a plan and then get feedback on that plan. I’m looking forward to seeing this process continue because I believe your success should be up to you, not the tax code.
First, tax reform is desperately needed. The last time Washington overhauled the tax code was in 1986. As one witness excellently put it, we have a 20th century tax code for a 21st century economy. There is a cost to doing nothing. If we don’t act, jobs will continue to leave and economic opportunity will remain elusive for many.
Second, rates need to come down. In the context of the corporate rate, we were once competitive when compared to other developed countries, but in the last 30 years, corporate tax rates in these countries have, on average, fallen from 35 percent to 20 percent. The U.S., on the other hand, still has a 35 percent rate that is higher than almost every country in the world. We can’t compete if we’re running in last place.
Third, we have to look out for the little guy too. One criticism levied at lowering the corporate tax rate is that it’s a giveaway to big business, but as I’ve always said, businesses don’t pay taxes. People do. When we raise rates on businesses, they pass that price on to their customers and workers through higher prices and lower wages. One of our witnesses testified to this and reminded committee members that workers can bear up to 75 percent of corporate tax burdens through lower wages.
One of my colleagues mentioned that we need to look out for middle- and working-class Americans as we consider tax reform. I couldn’t agree more. I brought up the story of a 24-year-old who came from a working class family and started his own business. He couldn’t take a paycheck at the start. As soon as he started to make a profit, he needed to set aside enough to cover taxes before he could pay the other hard-working Americans he hired to help him run his business. It started to grow, but he soon found himself unable to maintain that growth because of the tax burden placed on his business. When growth slowed, hiring came to a halt, which meant no new jobs were being created. These are the people we need to keep in mind as we move forward. Cutting the corporate tax rate isn’t just a giveaway to big business. It’s a ticket to opportunity to Americans looking to grow their business, live the American Dream and give jobs to their neighbors. I would know because 33 years ago, that 24-year-old was me.
In the coming months, we’ll continue to have hearings on tax reform and have discussions with our colleagues, businesses and our constituents. We can’t rush headlong into tax reform if we don’t lay the groundwork for successful reform. We have to get input, draft a plan and then get feedback on that plan. I’m looking forward to seeing this process continue because I believe your success should be up to you, not the tax code.