U.S. Sen. John Thune (R-S.D.) today discussed several of the GOP’s tax reform objectives, including reforming our outdated international tax code. By transitioning from a worldwide tax system to a territorial tax system where businesses are taxed within the territory they operate, wages will increase and there will be more jobs and opportunities for American workers who are employed by global companies. Small and medium-sized businesses throughout our country that make up the supply chain for America’s global companies would also benefit from a territorial tax system.
Thune’s remarks (as prepared for delivery):
“Mr. President, the House and Senate are moving forward on a final draft of our tax reform bill, and I’m excited about the progress we’re making.
“We've got one goal in mind with tax reform, Mr. President – providing real relief to ordinary Americans.
“To the parents questioning whether they can afford the car they need to fit their growing family.
“To the single mom wondering how she’s going to pay the bills this month.
“To the middle-aged couple worrying about a secure retirement.
“Everything in our tax reform framework is centered on providing relief to these Americans.
“To start with, we’re going to provide them with a substantial amount of direct relief by lowering their tax rates and doubling the standard deduction, so that they’re keeping more of their paycheck every month.
“We’re also going to significantly expand the child tax credit.
“And we’re going to simplify and streamline the tax code so that it’s easier for Americans to figure out what benefits they qualify for, and so they don’t have to spend a lot of time and money filing their taxes.
“All of these reforms mean more money in Americans’ pockets.
“But we’re not stopping there.
“We’re also going to focus on reforming the business side of the tax code, so that we can give Americans access to the kind of jobs, wages, and opportunities that will set them up for a secure future.
“In order for individual Americans to thrive economically, we need American businesses to thrive.
“Thriving businesses create jobs.
“They provide opportunities.
“They increase wages and invest in their workers.
“And they invest in new equipment, facilities, and product lines to innovate and expand their businesses.
“Right now, though, our tax code is not helping businesses thrive.
“Instead it’s strangling both large and small businesses with high tax rates.
“Our nation has the highest corporate tax rate in the industrialized world – at least 10 percentage points higher than the majority of our international competitors.
“And that’s a problem for American workers, because high tax rates leave businesses with less money to invest in their workers, increase wages, or create new jobs.
“And this situation is compounded when you’re an American business with international competitors that are paying a lot less in taxes than you are.
“It’s no surprise that U.S. businesses struggling to stay competitive in the global economy don’t have a lot of resources to devote to creating new jobs and increasing wages.
“A study from the White House Council of Economic Advisers estimates that reducing the corporate tax rate from 35 percent to 20 percent would increase average household income by $4,000 annually.
“A second study shows a similar pay increase.
“Boston University professor and public finance expert Larry Kotlikoff found that lowering the corporate tax rate to 20 percent would increase household income by $3,500 per year on average.
“That’s a significant pay raise for hardworking Americans.
“In addition to lowering the corporate tax rate, there’s another important thing we can do to increase the availability of jobs here at home.
“And that’s reforming our outdated worldwide tax system.
“Under our worldwide tax system, American companies pay U.S. taxes on the profit they make here at home, as well as on part of the profit they make abroad, once they bring that money home to the United States.
“The problem with this is that most other major world economies have shifted from a worldwide tax system to a territorial tax system.
“In a territorial tax system, you pay taxes on the money you earn where you make it, and only there.
“You aren’t taxed again when you bring money back to your home country.
“Most of American companies’ foreign competitors have been operating under a territorial tax system for years, so they’re paying a lot less in taxes on the money they make abroad than American companies are.
“And that leaves American companies at a disadvantage.
“These foreign companies can underbid American companies for new business simply because they don’t have to add as much in taxes into the price of their products or services.
“And when foreign companies beat out American companies for new business, it’s not just American companies who suffer: It’s American workers.
“It’s the American workers employed by these companies who live and work in every state in the union.
“And it’s the American workers who work for the small and medium-sized companies that form the supply chain here in the United States.
“For every American company that operates in countries around the world, there are countless companies here at home that supply the raw material for the products sold abroad.
“Businesses that handle the packaging and shipping of those products.
“And enterprises that supply support services like accounting, legal, and payroll services.
“America’s global companies rely on a web of supporting businesses that spans the country.
“And when these global companies struggle, so do these supporting businesses and their workers.
“By transitioning from a worldwide tax system to a territorial tax system, we will not just be boosting wages, jobs, and opportunities for American workers employed by these global companies.
“We will also be increasing wages, jobs, and opportunities for workers at the countless small and medium-sized businesses throughout our country that make up the supply chain for America’s global companies.
“Finally, Mr. President, our tax plan will tackle the other key part of improving the playing field for American workers:
“And that is lowering the tax rates on small businesses.
“Small businesses are incredibly important for new job creation.
“But like bigger companies, right now small businesses are being strangled by high tax rates.
“That can make it difficult for small businesses to even survive, much less thrive and expand their operations.
“Lowering small business tax rates – and making it easier for small businesses to recover their invested capital more quickly – will free up the money small business owners need to expand their businesses, add workers, or give employees a raise.
“Together, these aspect of tax reform are essential to reversing the lackluster economy of the last eight years.
“Americans deserve better, and tax reform can be the key to putting this country back on the path to solid, sustainable economic growth.
“Mr. President, before I close today, I’d like to switch gears for a minute and talk about judicial nominations.
“We’ve had the chance to confirm some excellent nominees so far this year – many of whom Democrats have ultimately supported.
“But despite this fact, Democrats have insisted on delaying the process of almost every single nomination to a district or circuit court.
“That’s pretty much the definition of partisanship – when you obstruct nominees based not on any disagreement you have with them, but simply because you don’t like the person who’s doing the nominating.
“Now, Mr. President, Democrats’ delays are ultimately pretty pointless.
“We’re not going to stop confirming nominees just because Democrats are dragging out the process.
“But these delays are a disservice to the American people.
“There are a lot of important issues the Senate needs to be debating – from spending bills to tax reform – and the time we waste on pointless partisan exercises is time taken from those important issues.
“But Mr. President, while Democrats’ partisanship is frustrating, there’s a much more serious issue that has come up during these judicial confirmations.
“And that’s the anti-religious sentiment displayed by some of my colleagues on the other side of the aisle during the hearing on judicial nominee Amy Barrett’s nomination, which we’ll be voting on this week.
“Ms. Barrett’s qualifications are well known.
“The American Bar Association, which rates judicial nominees, has given her its highest rating of well-qualified.
“As my colleague the minority leader has said, the bar association’s evaluation is the “gold standard by which judicial candidates are judged.”
“But, Mr. President, despite her judicial qualifications, it became clear in the hearing on her nomination that some of my colleagues think she should be disqualified because she is a practicing Catholic.
“That’s right, Mr. President.
“Apparently practicing your religion is now grounds for declaring you unfit to be a judge.
“Here’s what the Constitution has to say about that:
“From Article Six, ‘no religious test shall ever be required as a qualification to any office or public trust under the United States.’
“Let me repeat that, Mr. President.
“‘No religious test shall ever be required as a qualification to any office or public trust under the United States.’
“In other words, Mr. President, in the United States, you can’t be disqualified from serving as a judge because you’re a believing Catholic – or a believing member of any faith.
“The only qualification the Constitution imposes is a commitment to uphold the Constitution.
“And yet the second-ranking Democrat in the United States Senate apparently thought it was appropriate to ask Ms. Barrett if she was a practicing member of her religion – with the implication that if she was, it might jeopardize her fitness for being a judge.
“Mr. President, Democrats’ questioning is not going to stop Ms. Barrett’s nomination.
“But it is deeply disturbing nonetheless.
“It’s a scary thing when leaders of a major political party imply that there is no role for religious people in public life.
“And I don’t need to tell anybody that that’s contrary to everything our founders stood for.
“The right to be able to practice religion freely – yes, in public too – was so fundamental to the founders’ understanding of liberty that they made it the very first freedom mentioned in the Bill of Rights.
“People of faith have made incalculable contributions to our country, and faith has driven some of the greatest movements in American history, from the abolitionist movement to the civil rights movement.
“I hope the Democrat Party doesn’t move further down the path of excluding religious people from public life.
“If they ever succeed in excluding people of faith from government, they will have destroyed one of the freedoms on which our country rests.”