U.S. Sen. John Thune (R-S.D.) today discussed the Senate’s tax reform plan, which is currently being considered in the Senate Finance Committee, of which he’s a member. Thune touted a recent Politico article stating that middle-income people would see the largest decline in their tax bills, according to an analysis released by the nonpartisan Joint Committee on Taxation.
Thune also expressed his support for modifications that were made to the original bill by Orrin Hatch (R-Utah), chairman of the Senate Finance Committee, which include Republican and Democrat amendments and will provide even more relief to middle-income American families.
Thune’s remarks (as prepared for delivery):
“Mr. President, on Sunday, Politico offered this headline: ‘Middle Class Biggest Winners in Senate Tax Plan, Study Says.’
“The article goes on to say, and I quote, “Moderate-income people would consistently see the largest percentage declines in their tax bills, according to an analysis released late Saturday by the official, nonpartisan Joint Committee on Taxation.
“‘In 2019, people in the middle of the income spectrum, earning between $50,000 and $70,000, would see their taxes fall by 7.1 percent. Those earning between $20,000 and $30,000 would see a 10.4 percent decline …’
“Mr. President, this is what we set out to achieve with the Senate tax bill we released last week: real relief for American families.
“And that’s what our bill delivers.
“I don’t need to tell anyone that the American people have had a rough few years.
“Stagnant wages and a lack of opportunities have left many American families stretched thin.
“A recent survey found that 50 percent – 50 percent – of voters consider themselves to be living paycheck to paycheck.
“And about one-third of voters say they are just $400 away from a financial crisis.
“But real help is on the way.
“Last night Chairman Hatch released a revised bill that provides even more relief for middle-class families.
“I applaud Chairman Hatch for his work on this revised bill that includes Republican and Democrat amendments and reflects feedback we have received from the whole Republican Conference.
“Our bill provides immediate, direct relief to hardworking Americans.
“Our bill doubles the standard deduction.
“That means beginning in January a family making $24,000 or less per year won’t be paying any taxes.
“And families making more than $24,000 will be paying significantly less than they’re paying today.
“Our bill also doubles the child care tax credit from $1,000 to $2,000 per child.
“We all know raising children is expensive.
“And this provision will provide a significant tax cut to families across the country.
“I want to thank Senators Scott, Heller, Rubio, and Lee for their leadership on this issue.
“Their advocacy for expanding the child tax credit will result in substantial tax relief for working families.
“But, Mr. President, that’s just the beginning of what this tax bill is going to do for American families.
“We’re not just going to ensure that Americans can keep more of their hard-earned money.
“We’re also going to ensure that they can make more of it.
“Our bill is not just going to cut Americans’ taxes:
“It’s also going to give Americans access to the kind of jobs, wages, and opportunities that will set them up for a secure future.
“So how does that work?
“Well, in order for individual Americans to thrive economically, we need American businesses to thrive.
“Thriving businesses create jobs.
“They provide opportunities.
“And they increase wages and invest in their workers.
“But our current tax code is not helping businesses thrive.
“It’s doing the opposite.
“It’s strangling both small and large businesses with high tax rates.
“Small businesses are incredibly important for new job creation.
“But right now the high tax rates small businesses face can make it difficult for these businesses to even survive, much less thrive and expand their operations.
“Our bill will fix this.
“To start with, our bill implements a new deduction for businesses that will allow them to keep more of their money, which will allow them to reinvest in their operations, increase wages, and hire new workers.
“Our bill also reforms a number of current provisions in the tax code that frequently leave small businesses with very little cash on hand.
“Under our legislation, small businesses will be able to recover the capital they’ve invested in things like inventory and machinery much more quickly – in certain cases, immediately – which will free up capital that they can use to expand and create jobs.
“Our legislation also includes provisions I helped develop that will simplify accounting rules for small businesses, which will also help reduce their tax burden, leaving more of their earnings to reinvest in their businesses and their workers.
“Mr. President, in addition to cutting rates for small businesses, our bill also reduces our corporate tax rate.
“Our nation’s corporate tax rate is currently the highest in the industrialized world, which puts U.S. businesses at a major disadvantage next to their international competitors.
“By reducing the corporate tax rate, our bill will enable U.S. businesses to compete on a more level playing field with their competitors, which will in turn free up money that U.S. businesses can use to create jobs and increase wages.
“The White House Council of Economic Advisers estimates that reducing the corporate tax rate to 20 percent will increase average household income by $4,000 annually.
“Our bill also ends the outdated tax framework that is driving American companies to keep jobs and profits overseas.
“Our nation currently operates under a so-called worldwide tax system, which means that 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 back to the United States.
“The problem with this is that American companies are already paying taxes to foreign governments on the money they make abroad.
“Then when they bring that money home, they can end up having to pay taxes again on part of those profits, and at the highest tax rate in the industrialized world.
“It’s no surprise that this discourages businesses from bringing their profits back to the United States to invest in their domestic operations, new jobs, and increased wages.
“Between 1983 and 2003 – when the U.S. tax rate was much more competitive with those of other countries – there were 29 corporate inversions where U.S. companies moved abroad.
“Between 2003 and 2014 – when other countries were dropping their corporate tax rates and shifting to territorial tax systems – there were 47 such inversions.
“Our bill addresses this drag on our economy by moving from our outdated worldwide tax system to a territorial tax system.
“By shifting to a territorial tax system – a move, I should note, that has been supported by members of both parties – we eliminate the double taxation that encourages companies to send their investments and their operations overseas.
“Combine that with the reduction in our high corporate tax rate, and our bill provides a strong incentive for U.S. companies to invest their profits at home in American jobs and American workers instead of abroad.
“All in all, the Tax Foundation estimates that in addition to increasing wages, our bill will create nearly 1 million new jobs for American workers.
“Mr. President, the legislation we unveiled last week is the product of years of work here in the Senate – work by members of both parties.
“I hope my Democrat colleagues will join us to advance this bill, which is partly the result of their labors.
“This is the kind of chance we all dreamed of when we came to Washington – a once-in-a-generation chance to make a real difference in the lives of ordinary Americans.
“To substantially improve their lives today and give them access to a brighter, more secure, and more prosperous future.
“Mr. President, I look forward to debating this bill over the next few weeks and getting a final version to the president’s desk.
“It’s time to give the American people a tax code that works for them.”