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GOP Freshman Class on Comprehensive Tax Reform

Floor Speech

By:
Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

Mr. DUFFY. I appreciate the gentleman from New York for yielding.

As we talk about these issues--and I've been listening today as my colleagues have been discussing the tax policy--if you take a step back, if you look at all of the different rules and regulations and bills that have taken place over the course of the last 3 1/2 years, it's a torrential rain. We have to take it almost raindrop by raindrop, looking at each policy, each rule, each law that has gone into effect. I want to take a moment to step back from the tax debate and first start with the conversation in regard to the budget because I think most Americans that I talk to, they are very nervous about what's happening with this ever-expanding government and ever-expanding debt. Many Americans know we owe now $15.6 trillion. They know we've borrowed $1 trillion every year for the last 3 years.

So they will step back and go, Well, what's the plan? How do we address this really difficult problem?

I know a lot of the moms in my district are concerned about who's lending us that money. Ask the Chinese. They're concerned about their kids that they're raising so well, are educating so well. What kind of an America are they going to grow up in?

So they say, Listen, what kind of budget are you going to have? How are you going to fix it?

If they were to look to the Senate, they would look and see that for the past 3 years the Senate wasn't willing to pass a budget, that they weren't willing to put out a plan on how they would deal with this daunting issue that this country faces. If they were to look over to the President and ask the President, How do you deal with this cancer that is growing in America, which is our debt? How do you deal with it? I think they'd say, Well, Mr. President, you've given us a budget, but it's a budget that never balances. It's a budget that includes all the tax increases you've ever discussed, but it doesn't balance. It's a budget that we've brought to this House floor, and it was such a political document that doesn't accomplish the goals that the moms and dads of America want accomplished that not one Republican or one Democrat voted for that budget.

We need real ideas to be put on the table, and we need bold leadership to address the large issues that we face in this country. For the last 2 years, the House Republicans have given that bold leadership. We've been willing to put ideas on the table on how we fix the great problems of our generation. I'm proud of our freshman class, and I'm proud of our House Republicans for willing to step out and lead. Part of that leadership has been the reform of our tax system, of our Tax Code, making it more competitive and more fair, and I want to talk about that a little bit, which is the conversation tonight.

I think many Americans may not know this, but as of

April 1, April Fool's Day, we had the highest corporate tax rate in the industrialized world, and that's because the Japanese on April 1 were the last ones to lower their taxes, making us the highest tax country. That's a problem. We find ourselves in a situation in America where one party is asking for a more competitive Tax Code that will encourage investment and growth in America. We have the other side, which is the President's side, that encourages, under the auspices of fairness, that we increase taxes.

As I talk to people back at home, these conversations oftentimes come up, and I'll ask my friends at home. I'll say, Listen, if you look at businesses in America, can you name a few of them that don't pay taxes? Are there a few businesses here that you can identify that don't pay taxes?

Virtually everyone in the town hall will shake their heads and go, Yeah, yeah. I can name that business that doesn't pay taxes.

So I'll ask them, Well, if you want that business to pay taxes, if you were just willing to raise the tax rate from 35 percent up to 40 percent, which is what the President wants to do, will that business that's in your head that doesn't pay taxes now pay taxes if you just increase the rate by 5 percentage points?

No. The Tax Code is broken--for generations, long before I got here. I was riding my trike when people were carving out special interests in the Tax Code. There are 70,000 pages in the Tax Code that are for special interests, special loopholes. The people of my district don't take advantage of those 70,000 pages. It's for the special interests that come to this town day after day and ask to carve themselves out. What have we done? We in this House have said that's not fair; that's not right.

Let's carve them all back in. Let's reduce the complexity of the Tax Code, bring all these people back in and make them, yes, pay their fair share. What we've said that we can do is take the top rate from 35 percent and bring it down to 25 percent, and then the other rates down to 10 percent. If you do that by eliminating all the loopholes in the code, you'll bring in more revenue, and it will be fair. Doesn't that make sense? Raise and raise doesn't accomplish it. Reforming the Tax Code is where we have to go. Let's get a bipartisan group together, carve out those special interests, reduce the rates, and make us more competitive.

We hear a lot about the Buffett tax, right? It's a tax on investment income. Listen, there are two different kinds of income. You have the income that you get from your salary. Your salaried income, that's taxed at a certain rate. You're guaranteed to get that every week or every 2 weeks because you put your 40 or 80 hours in, and that paycheck comes to you and you're guaranteed to get it. But there is also investment income. In America and around the world, investment income is taxed at a little bit of a lower rate.

You say, Well, why? Why would that be taxed at a lower rate? The reason is--let's say you invest $100,000. You're not guaranteed to make anything on that $100,000. Actually, you might lose the whole investment--you might lose that $100,000--but if you're lucky enough or smart enough or savvy enough to make some money on that $100,000 investment, we've said you should have a tax rate that's a little bit less than that which is guaranteed in the salary. So we have a little less of a tax rate on investment income.

But there is something else. We want to encourage investment in America because we know, if you're investing in our infrastructure, in our manufacturing facilities, in our businesses, if we have investment, what happens? We create jobs. There is job growth in America when you have investment in America, and we want to make sure this is a great home for investment. If you raise the taxes on investment, you will get less of it. Let's make sure we have a great investment tax rate so money around the world wants to pour into this country and wants to take advantage of one of the best workforces in the world, which is right here in America.

One other point I want to make before I yield back to the gentleman is that there are a lot of people who talk about raising taxes to bring in more revenue. I think it's important that we're very clear: that when people are talking about raising taxes to bring in more revenue in order to pay down the debt, that's not what's happening. People are asking to raise taxes to spend more money. There is no effort to reduce spending in this town. Those who want to increase taxes want to spend more--they don't want to spend less--but if you want to actually bring in more money to the Federal coffers, you should look at the tax history, because every time we're raising tax rates, there is not a correlation in bringing more money into the Federal coffers.

Raising tax rates doesn't mean more money. What does mean more money into the Federal coffers is a growing economy. If you can grow your economy, if you can put your people back to work, more people pay taxes.

If more people pay taxes, more money comes into the Federal coffers, and we have more dollars to pay down our debt. Not only that, there's less people on food stamps and energy assistance because they have a job.

This is some commonsense reform that this group in the House is talking about. If we could just implement it, take the weight of a burdensome Tax Code off the shoulders of our entrepreneurs, our job creators, and our investors, we can see expansive growth, explosive growth.

I look forward to being part of a team who is willing to engage in a great debate to make sure we are again the most competitive and best placed in the country to invest.

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