Mr. Secretary, welcome back to the Committee and congratulations on your one-year anniversary as Treasury Secretary, I am sure this has been quite a year for you.
As you know, over the past three years, this Committee has been working on comprehensive tax reform so we can make the code simpler and fairer for all taxpayers. And, last week we released a draft that achieved that goal – lowering rates across the board. As a result, the non-partisan Joint Committee on Taxation found our plan would increase economic growth by $3.4 trillion and create nearly two million jobs.
I want to make one thing clear, we can longer accept the status quo. Too many Americans are unable to find full-time work and too many families are struggling with stagnant wages – our tax code is only making matters worse. When I am back home in Michigan, one thing rings true – businesses and hardworking taxpayers are frustrated with the tax code and they feel that Washington just isn’t listening. We must strengthen the economy so there are more jobs and bigger paychecks for American families – tax reform will do that.
We have an opportunity to listen to the American people, to provide some solutions and create real growth and job creation. I believe hardworking taxpayers deserve a tax code that respects all the hard work that they do. We recognized that in our draft when we made the code simpler so that 95 percent of taxpayers will no longer have to itemize. That means no more tracking all those receipts, or spending, on average, 13 hours to compile their taxes. With provisions like an expanded standard deduction and increased child tax credit, the plan I released puts $1,300 more in middle-class families’ pockets per year.
I recognize there is some area of agreement between us. Clearly, we can all agree that the tax code is a wet blanket on the economy and makes it harder for employers to create new jobs and invest in the United States. By lowering the corporate rate, we put U.S. companies on a level playing field – making them and their workers more competitive. I am encouraged that the President has joined the conversation on the need to overhaul our corporate tax code. By closing loopholes, my plan lowers rates for businesses of all size, and I look forward to hearing from the Administration on how we can work together on that front.
While I commend the Administration for proposing ideas to reform parts of the code and close loopholes, I am disappointed that the Administration turns its back on small businesses, which make up over half of all business activity in the country.
Furthermore, increasing taxes to pay for new spending and a larger government, which this budget does, is not real tax reform, and it certainly isn’t a plan that will create a stronger economy. The differences are clear: while your plan raises taxes by $1.8 trillion, my tax reform plan would create 1.8 million new jobs. And, maybe that is what this really boils down to. Despite the worst economic recovery since the Great Depression, this Administration is still focused on how many dollars it can bring into Washington instead of how many jobs it can create for American workers.
Given the need for more jobs, I want to discuss the opportunities to open new markets for American-made goods and services. Trade agreements are a proven way to inject growth into the economy and create jobs. We should start with the passage of the Bipartisan Congressional Trade Priorities Act, a bipartisan and bicameral bill that I introduced earlier this year. This bill would modernize TPA so we can achieve the economic growth and job benefits that trade agreements can bring to the U.S. This TPA legislation would secure enforceable rules related to 21st century issues such as intellectual property protection, disciplines on state-owned enterprises, restraints on localization barriers, investor-state dispute settlement, cross-border data flows, and disciplines on sanitary and phytosanitary barriers. Importantly, it would also hold our trading partners accountable. One of the most important additions is the inclusion of a strong currency negotiating objective – an issue that this Administration has failed to address and appropriately discuss with Congress. The currency provision gives the U.S. the necessary tools to address the unfairness and distortion caused when countries manipulate their currencies.
We have several important agreements that we are negotiating currently. These agreements will open new markets for the goods and services produced by our U.S. manufacturers, service-providers and farmers, and ensure that our trading partners play by the rules. TPA is the only way we can successfully bring these job-creating trade agreements to a close. To be frank, I need to see more engagement from the Administration on this top trade legislative priority. The Administration needs to work with Democrats to ensure that we can move TPA legislation forward in a bipartisan manner.
With that, Mr. Secretary, I appreciate you coming to the Committee today, and I look forward to hearing your testimony and discussing these issues, as well as others.