Chairman Arrington Delivers Opening Statement at Hearing on Growth and Taxes

Hearing

"Economic growth and prosperity, I believe, is the tide that lifts all boats with more and better jobs, higher wages and income, lower unemployment, lower poverty rates, and an overall improved standard of living for all Americans. But as we've discussed, and I think most of us believe, a vibrant and flourishing economy would also strengthen our balance sheet and improve our nation's fiscal health by generating revenue to the Treasury, as we've witnessed since the tax cuts and Jobs Act of 2017. Also, that revenue will help us pay our bills and fund our priorities. It will also reduce our financial risk, lower interest payments by bringing down our debt to GDP ratio, and then ultimately, helping us stave off a debt crisis.

"Last hearing, we examined the effects of excessive and overreaching regulations and how they compromise our freedom, quench the entrepreneurial spirit, and suppress economic growth. We noted that President Biden's regulatory track record at this point is two times previous President Obama, and the overall cost is at $360 billion. That is a major drag on the economy.

"We're going to focus today on the relationship between tax policy and economic growth, and again, its fiscal impact on our country and our country's future.

"Unfortunately, we are far from a rigorous and thriving economy today, as our nation and our working families continue to suffer from sustained 40-year high inflation. And inflation is coming down, I want it to come down. But core inflation is sticking. And it's about the same as it was over the first year of this administration.

"We've seen the fastest pace of interest rate hikes in history, we've experienced three consecutive quarters of economic decline with the most recent quarterly output at just around 1%. This is a direct result, in my opinion, of too much spending and wrongheaded policies. And I'll spare you all the litany of failed economic policies, and the $11 trillion in spending that I believe put us in this tough spot. And then for me, and I think most of our members, it's added $6 trillion to the national debt, which is already on an unsustainable course. We have to examine the relationship between good tax policy and our budget process.

"Congress has the power to tax. In 1913, the 16th Amendment gave us the power to tax directly to income. But what we pay for, the scope and mission of our republic, who we tax and how we tax is of the utmost importance, as we seek to responsibly pay our bills, and encourage growth and ensure the financial health of the United States. History is replete with the evidence that when you reduce the tax burden on job creators and consumers, the economy grows. Kennedy did it. Clinton did it. Bush did it. Reagan did it. And whether it was significant or modest, the result was the economy grew.

"In fact, President Kennedy said that economic growth in the post war era was "the most urgent task facing our nation,' which is why he proposed a tax reform package that, by the way, included a significant reduction in the corporate rates. He said it was to "step up the growth and vigor of our nation's economy,' "increase job and investment opportunities' and "improve our productivity.' As President Kennedy said, completing this task was about protecting the security of our people. Let me jump to the most recent example, the Tax Cuts and Jobs Act, very proud of what we did, would it have paid for itself? It's a good question, I think that will probably be raised by some of my colleagues. I don't know.

"I know that the economic feedback is positive. I know that we brought in more revenue than was projected and had to be upwardly revised several times by CBO. I think Republicans made a mistake not to include spending cuts. I'll say it, and I'll continue to say it. For a party that so obsessed with out-of-control spending, for us to have the House and Senate and the presidency and to pass tax cuts and tax reforms and not reduce spending, which I think is the preponderance of the problem. Certainly, one of the two pieces of the equation here, growth and reduction and spending, I think is more than disappointing. I think it's shameful actually. And we can't repeat that if we are given the opportunity. But what tax cuts and tax reform did was to generate more capital investment than we've ever seen, more R&D investment than we've ever experienced. We had the lowest unemployment rate, we had the lowest poverty rate in recorded history, 6 million people lifted out of poverty.

"A lot of benefits accrue to this country, namely, people were having better opportunities, higher paying jobs, and they kept more of their money. And we experienced an economic renaissance. Rather than go through all of my notes here, because I know I've filibustered before, I would just say, we have to have the most simple and efficient tax code. We have to find a way to make it more simple and more efficient. We have to have a fair and equitable tax code. And there's going to be debate about what that means to have 40% of the American people not having any stake in their country, it's a problem to have the top 10% paying 75% of the taxes. I think that's a problem. I think that's inequitable. But we can debate that, and we should.

"And then finally, we need a productive, the most productive and most competitive tax rate. We can't have China, Communist China have a lower tax rate on their businesses, their job creators than we do in the United States. And even today, after lowering the corporate rates, you combine the state taxes on businesses and federal taxes, we're paying more than in businesses in communist China, our competitor, and our adversary; that's a problem. So, let's work together and try to figure out how to get this right. We know that we know the formula for success after World War II, cut spending right size the government and the bureaucracy. Take on entitlement reform. That'll be a fun discussion. We haven't gotten there yet. But let's figure out how to grow this economy and leave our children a better country and a better spot with a brighter future."

Source