WASHINGTON, D.C. – House Ways and Means Chairman Kevin Brady (R-TX) today spoke at the American Enterprise Institute (AEI) in support of the Tax Cuts and Jobs Act.
Remarks as prepared for delivery:
“Thank you, Michael, for the kind introduction. And thank you all for having me this morning.
“It’s always a pleasure to be here at AEI surrounded by some of the brightest and most insightful conservative thinkers in the country.
“So, before I get started today, I want to say how grateful I am for all the work that you have done – and continue to do – in support of fundamental tax reform.
“This week is a particularly exciting week to be discussing the challenges and opportunities of tax reform here at AEI.
“Just before Thanksgiving, the House passed transformational tax reform for the first time in more than three decades. Now, this week, the Senate is moving full steam ahead to do the same.
“We’re looking forward to finding common ground in conference, finalizing the details, and sending this historic legislation to the President by the end of the year.
“If anyone understands the magnitude of this moment and what it means for our country, it’s all of you in this room who have worked for years to help us develop and deliver a new American tax system that is simple, fair, efficient, and effective.
“And through tax reform, we have an incredible opportunity to promote the kind of lasting economic growth that can only come from enhancing free enterprise, increasing individual liberty, and expanding economic freedom.
“But without tax reform, there are real consequences. And we’ll only continue to see erosion of these essential pillars of our economy.
“Think about it.
“Free enterprise cannot blossom and increase opportunity with a tax code that props up special interests at the expense of hardworking families, entrepreneurs, and Main Street innovators.
“Individual liberty cannot grow with a tax code that forces Americans to spend billions of hours and dollars on filing their taxes every year. That’s time and money they could otherwise devote to pursuing their own personal and professional aspirations – but our tax code says ‘no.’
“And when it comes to promoting and protecting economic freedom – that freedom to take an innovative idea and turn it into a breakthrough product or service that changes lives – today’s tax code fails miserably.
“To have real economic freedom, we need a tax code that supports free enterprise and strengthens individual liberty.
“But we also need a tax code that rewards hard work and directs investment to where it can create the most opportunity for the most people.
“And with today’s tax code, companies are too often encouraged to invest where they can get a new and better tax break instead of where they can create a new and better job.
“All of today’s wasteful exclusions, exemptions, carve-outs, and deductions have a powerful way of distorting decision-making and diverting investment away from where it can do the most good for the American people.
“It’s almost like the game ‘Plinko’ on The Price is Right.
“Today, when you run investment through today’s tax code, it bounces from one tax incentive to the other – zig-zagging through a maze of distortionary provisions until it lands in a completely different place.
“With tax reform, we’re focused on removing those counter-productive provisions – the distortionary pegs and prongs of today’s ‘Plinko’ tax code.
“This means simplifying and streamlining the code. It means providing certainty and predictability. And it means leveling the playing field to provide greater fairness to all taxpayers – as well as lower tax rates.
“In the end, that kind of true, pro-growth tax reform will allow capital and investment to flow more freely and efficiently throughout our economy.
“And, with the House-passed Tax Cuts and Jobs Act, I think we’ve delivered a system that will encourage and reward capital investment very well.
“This bill rewards investment in three kinds of capital that I believe are essential to the growth of jobs, paychecks, and our economy as a whole.
“The first is physical capital. The second is human capital. And the third is social capital – or ‘community capital.’
“When it comes to physical capital – which provides both the literal and figurative building blocks for our economy – we’re delivering the lowest rates in modern history for American businesses of all sizes.
“We’re also moving the United States to a modern international tax system that does not trap business investment overseas.
“This means businesses will be able to keep more of what they earn – no matter where they earn it – and use that money to invest in growing operations and jobs here at home.
“In fact, the CEO of AT&T – Randall Stephenson – said last month that if the House’s Tax Cuts and Jobs Act is signed into law, AT&T would increase investment significantly in America.
“Mr. Stephenson said, ‘we’d commit to increase our domestic investment by $1 billion in the first year in which the new rates are in place.’
“And along with a historic 20 percent corporate rate for our larger businesses, we’re also providing historic tax relief for America’s pass-through businesses – no matter if they’re just starting up or if they’re an established and growing firm.
“This includes providing – for the very first time – a rate of just 9 percent for pass-through businesses earning less than $75,000 in annual income. That’s a brand-new source of support to help new businesses keep and reinvest more of their earnings in those crucial ‘make or break’ early years.
“To have an economy that is healthy and growing in the 21st century, we need our 21st century startups and small businesses to succeed, grow, and create well-paying jobs.
“This brings me to the second type of capital – human capital.
“Here, we’re taking action with policies that are specifically designed to increase investment, productivity, and paychecks for American workers.
“One provision I’m particularly excited about is full expensing.
“For the first time, businesses of all sizes will be able to immediately deduct purchases of equipment that improves operations and enhances the skills of their workers.
“These are new tools Americans can use to help them do their jobs more efficiently and effectively. And not only does higher productivity lead to higher wages, it also increases our standard of living here in America.
“And it allows our workforce to learn and incorporate new techniques and technologies that make our entire economy more dynamic, versatile, and prosperous.
“That’s why, just yesterday, a group of nine prominent economists were featured in the Wall Street Journal saying that this provision – full expensing – will contribute to 3 percent or higher GDP over the next decade.
“Finally, our historic tax reform legislation will encourage and reward investment in social capital – or ‘community capital,’ as I mentioned before.
“I call it that because strong American communities and strong American families have long been some of the most important secret weapons of our economy.
“Our communities are the glue that hold our local economies together. And it’s much more than just Main Street storefronts and local manufacturing plants.
“It’s all the churches and houses of worship, the community organizations, the rotary clubs, the youth sports leagues – you name it.
“However you define it for yourself, our sense of community in America gives us belonging, pride, and purpose in our lives. And, as history has shown, when America’s communities are strong – our economy is strong.
“So, with the Tax Cuts and Jobs Act, we’re going to drive more investment in that social and community capital.
“We do this by doubling the standard deduction so Americans can keep more of every paycheck to save or spend on their family’s needs – without having to rely on a maze of confusing deductions.
“We lower tax rates for Americans of all walks of life and eliminate the marriage penalty in nearly every tax bracket.
“We preserve the Earned Income Tax Credit so we can continue to encourage and reward work.
“Finally, with this bill, we protect and improve tax benefits that help Americans with some of the most important investments in their lives.
“This includes increasing the child tax credit significantly so families can better afford the cost of raising children and caring for loved ones.
“We’re also preserving the mortgage interest deduction, streamlining higher education tax benefits, and protecting the charitable deduction. Hard working families will have support as they buy a home, send their kids to college, and give back to the local cause they believe in.
“With a 21st century tax code that drives investment in physical capital, human capital, and this important social capital, Americans nationwide will see more jobs, fairer taxes, and bigger paychecks.
“More than that – they’ll have a better chance to realize their own American dream, whatever that may be.
“Now, by passing the Tax Cuts and Jobs Act in the House, we took a major step toward making this kind of pro-growth, pro-family tax code a reality for the American people. But, this is not our last step by any means.
“We’re excited for the Senate’s work this week and we’re eager to come together with them at conference – and with President Trump in the weeks ahead – to deliver fundamental tax reform for the first time in more than 30 years.
“We’re also committed to improving this legislation at every step along the way.
“There’s no such thing as a perfect tax code, but there are proven ways to strengthen our communities and grow our economy.
“And I believe this approach – and this legislation – will go a long way in making our communities and our economy stronger than ever before.
“Thank you again for having me.”