oday, Sen. Tom Carper (D-Del.), gave remarks at a "Keeping America Competitive" event hosted by Third Way and the RATE Coalition in Washington, DC. He discussed the need to reform America's tax code in a way that encourages growth, provides certainty and predictability, is fiscally responsible, simplifies the tax code, and is fair.
A copy of Sen. Carper's remarks, as prepared for delivery, follows:
"I want to thank Third Way and the RATE Coalition for inviting me to speak at this Idea Forum. I'm honored to be here and to see so many familiar faces.
"Many economists and business leaders have argued that 21st-century jobs will go to nations that invest in world-class workforces and infrastructures, as well as the research and development needed to create new technologies and products.
"Reforming our nation's tax system is a crucial part of this effort. We need a Tax Code that will help the United States out-educate, out-innovate, and out-compete every nation on Earth.
"But, speaking frankly, that is not the tax system we have right now.
"Both the Corporate and Individual Tax Codes are in dire need of major overhaul. Both are riddled with inefficient loopholes and tax expenditures. Both are far too complicated and provide too much opportunity for some taxpayers to 'game the system' to avoid paying taxes. And both impose tax rates that are too high compared to our international competitors.
"For that reason, no matter what comes out of the 'Fiscal Cliff' negotiations happening this month, it is critically important that Congress work with the Administration to enact comprehensive tax reform in 2013. Waiting is not an option.
"That brings us to the crucial question of what tax reform should look like. It is no small question, and there are no easy answers.
"The Senate Finance Committee, which I'm proud to sit on, has spent the past two years hearing from experts on almost every conceivable aspect of tax policy. During these hearings, I've had an opportunity to consider a range of proposals and options for reform.
"Whenever I'm considering a tax provision, I try to look at the issue through a 'prism' of four questions:
1.Will the proposal encourage economic growth and provide the certainty and predictability that families and businesses need in order to plan?
2.Will it be fiscally responsible?
3.Does it make the tax code simpler or more complicated? And,
4.Is the proposal fair?
"I believe we should apply these common sense guiding principles to any corporate tax reform effort. But first, we need a starting point.
"Over the past few years, the headlines have been dominated by any number of proposals calling for a 'grand bargain' to tackle our revenue and spending challenges. One of the most important proposals was put forth by the President's Fiscal Commission.
"Co-chaired by former President Clinton's Chief of Staff, Erskine Bowles, and former Republican U.S. Senator, Alan Simpson, this Fiscal Commission provided us with a roadmap, reducing deficits by $4 trillion over the next decade.
"The Commission put almost everything on the table and offered a balanced approach to fixing our long-run fiscal problems. More to the point, the Commission proposed reforming the tax system in a comprehensive way.
"In exchange for scaling-back or reforming tax expenditures, tax rates would be cut dramatically. For example, the plan would cut the corporate rate from 35% down to anywhere from 23% to 29%.
"I'm very supportive of this framework. With that being said, however, Bowles-Simpson represents the beginning of tax reform -- not the end. It is up to us -- we in Congress, working with the President -- to fill in the details.
"On both sides of the aisle, I believe there is basic agreement that a reformed tax code should encourage long-run economic growth for the United States, and that tax reform should enable American companies to compete successfully in a global economy.
"When we drill-down into that framework, however, important unresolved differences remain. Just to highlight the scale of the challenge we face, allow me to mention just two issues that must be addressed for reform to succeed.
"First, we face 'trade-offs' between tax rates and tax breaks. If we want to lower the corporate statutory tax rate to help make American companies more competitive, doing so will impose a significant loss of revenue. In order to ensure tax reform is fiscally responsible, these lower rates must be offset by 'base broadening.'
"In other words, what tax expenditures are businesses willing to 'give up' or scale-back in order to achieve lower rates?
"Second, there is growing support for moving our nation's international tax rules toward a 'territorial' system that is used by our trading partners. However, any territorial tax system must be carefully designed.
"It's important to prevent the erosion of the U.S. tax base that might result if multinational companies shift certain kinds of income and assets overseas.
"My time is limited today, but for each of those questions, there are hundreds more. Instead of going through them all, let me conclude by asking something of the business representatives in the audience today.
"I often say a major role of government is to create a nurturing environment where businesses can grow and create jobs, while also playing by the rules and being good corporate citizens.
"With your help, there is a great opportunity to accomplish the bipartisan goal of improving American competitiveness, all in one stroke, during this tax debate.
"My suggestion is this: the more agreement there is among the business community -- between not only companies in the same industry, but between different industries -- the better the chances that tax reform will be successful.
"I fully recognize that different businesses have differing priorities and make use of different tax expenditures. Herding cats is never easy, and neither is 'base broadening.'
"But, if we are to achieve a more competitive tax rate, and make the system more efficient, more fair, and more fiscally responsible, then we in Congress would benefit from broader agreement among the business community.
"Thank you for inviting me here today."