Good morning, and thank you for joining us this morning. According to the Congressional Research Service, the last time both the House Ways and Means and the Senate Finance Committees met together for a joint hearing on tax issues was 1940 – more than 70 years ago – to discuss a war profits tax.
And while I have said that I have been looking forward to our two committees working closely together on tax reform – I hope that you all know that I did not necessarily mean in such tight quarters.
I want to thank the staff for working out the details, and my colleagues on both the House and Senate side for being here today. It is a clear illustration of how serious the issue of tax reform is to both of these committees and, of course, to the American economy.
As former Treasury Secretary James Baker said at the April 6th Joint Tax Committee hearing, tax reform has “something in it for everybody.” For an American family it means greater simplicity, fairness and predictability so that families can plan and prosper. And for employers and their employees, transforming our tax code is critical to making America a more vibrant competitor abroad and a more attractive place to invest and create the jobs we need here at home.
However, before we can begin to tackle and craft a plan for comprehensive tax reform, we must take time to better understand how the current code influences our economy and the decisions made by families and businesses. The issue of debt and equity – the topics of our hearing today – is among the most complex issues we must grapple with and among the most important to get right in moving forward.
Earlier this week, the staff of the Joint Tax Committee issued two reports responding to a request Chairman Baucus and I made – one on household debt and one on business debt. The report on household debt examines provisions in current law related to the deduction of interest expenses – including personal interest deductions for mortgage interest, interest on student loans and investment interest. The business debt report focuses more on the tax treatment of debt relative to equity and its implications for corporate capital structures.
These are all crucial issues, and I think it’s fitting to have both of Congress’s tax-writing committees here today to receive these reports and hear from our distinguished panel of experts.
Before I yield to my friend from Montana – I would like to take a moment to congratulate him on his recent marriage. I now recognize Chairman Baucus for an opening statement.