Welcome all, to this important hearing.
The purpose of today’s hearing is to highlight the need for pro-growth tax reform.
Our economy is currently suffering from the reluctance of job creators to invest, expand, and hire workers in the United States.
For several years, Washington has followed a now-discredited playbook: If businesses won’t invest, then the government should expand its reach.
But letting the government pick winners and losers in the market only adds to the debt, wastes taxpayer dollars, promotes crony capitalism, and ultimately fails at sustainable job creation.
For evidence, look no further than Solyndra, a solar-panel company that received $500 million in stimulus-funded loan guarantees. Last month, Solyndra filed for bankruptcy and laid off its employees.
Another idea we’ve been trying for the last three years, under Presidents Bush and Obama, is short-term tax rebates, on the theory that these temporary windfalls will encourage people to go out and spend more money.
I don’t object to letting people keep more of the money they’ve earned. But one-time rebates and short-term tax policies do not give businesses the confidence they need to make the kinds of long-term investments that create jobs.
That is why, of all the proposals the President put forward in his latest speech, the most encouraging was his support for making the corporate tax code fairer, simpler, and more competitive.
We should extend these reforms to the entire U.S. tax code. A world-class tax system should be fair, simple, and competitive – and right now, the U.S. tax code fails miserably on all three counts.
The World Economic Forum recently downgraded the United States from fourth to fifth in its annual competitiveness rankings. The reason? Under the section titled, “Most problematic factors for doing business,” our unfair, complex, and uncompetitive tax code was right at the very top.
We need to close loopholes that distort economic activity – and that reward the politically well-connected at the expense of the hard-working small businessman.
We need to simplify the code by reducing the number of brackets, so that people spend less time and money figuring out how to comply with the code.
And we need to lower tax rates, to encourage economic activity – and to allow our businesses to compete on a level playing field against those in countries where corporate tax rates are much lower. Unfortunately, that list includes every developed country except for Japan.
There is a growing bipartisan consensus for this kind of common-sense tax reform. The President’s bipartisan Fiscal Commission made clear that a revamped tax code with a broader base and lower rates was critical to economic growth.
That’s one reason House Republicans included similar reforms in our budget, The Path to Prosperity – lower rates and a broader base to help get our economy growing again.
Unlike the high-cost government spending proposals now circulating in Washington, fundamental tax reform could be done with no budgetary cost, but would provide many immediate and long-lasting economic benefits.
At today’s hearing on the need for such reform, we will hear from three terrific witnesses.
In addition to tax experts Scott Hodge of the Tax Foundation and Diane Lim Rogers of the Concord Coalition, we have a witness today from the world of business, Michael Wall of Case New Holland, headquartered in Southern Wisconsin.
Mr. Wall can speak first-hand about the effects of tax policy on business decisions and job creation in the United States.
I am looking forward to hearing from all of you on a topic that is critical to laying the foundation for sustained economic growth and job creation.
With that, I yield to the Ranking Member, Mr. Van Hollen.