In a speech on the Senate floor, Finance Committee Chairman Orrin Hatch (R-Utah) discussed President Trump’s tax plan and highlighted a variety of provisions that will help lay the groundwork for a comprehensive overhaul that will make the tax code fairer and more effective for the American people.
“The plan is designed to grow the economy. It would reduce rates for both large and small businesses and job creators, which is also something both Republicans and Democrats have sought to accomplish in tax reform,” Hatch said. “Overall, the President’s tax plan would make our country more competitive in the international marketplace and reduce the tax burden on millions of middle-class families.”
Hatch went on to note the importance of finding success in reforming the tax system and urged his colleagues in Congress, both Republican and Democrat, to work with the Administration toward real reform.
“The last major tax overhaul in the U.S. was more than 30 years ago. We have a once-in-a-generation opportunity in front of us, and I intend to do all I can to ensure that we make the most of it,” Hatch continued. “I’m not simply referring to Republicans in Congress and the White House. I’m referring to anyone who recognizes the problems in our current tax system and is willing to do the necessary work to fix those problems. Bridging that gap and finding the path forward is going to take some serious negotiation and compromise.”
The full speech, as prepared for delivery, is below:
Mr. President, last Wednesday, the Trump Administration unveiled the outlines of a tax reform plan. And, predictably, the plan has met with both praise and scorn from the usual sectors.
Regardless of where people might come down on the specifics of the President’s plan, those who have been proponents of tax reform – hopefully those from both parties – should be pleased to see the President of the United States fully engaged in this effort.
For six years now, I have been beating the drum on tax reform.
I’ve sought to make the case for reform here on the floor, in public forums and events, and in private conversations. And, I haven’t been alone.
Indeed, members from both parties have acknowledged the need to fix our broken tax system and have sought to move the ball forward on reform.
One thing I’ve said throughout this endeavor is that tax reform, if it’s going to be successful, will require presidential leadership. And, that wasn’t a political statement on my part. With those statements, I wasn’t simply calling for the election of a Republican president. On the contrary, I repeatedly implored President Obama to engage with Congress on tax reform, but to no avail.
As of now, we finally have a President who is willing to lead in this effort. And, once again, regardless of where anyone stands with regard to this President or the specifics of his tax plan, the fact that he is willing to meaningfully engage with Congress and the public on these issues should be viewed as a welcome sign for all tax reform advocates, regardless of their party affiliation.
With regard to the specifics of the outline, I believe the President has laid out a set of critical core principles that should hopefully serve as guideposts as the effort moves forward.
Most importantly, the plan is designed, first and foremost, to grow the economy, and it would certainly do that.
In addition, the plan would greatly simplify the tax code and make it fairer, particularly for individuals and families, which has been a shared goal of tax reformers from both parties. For instance, over two-thirds of taxpayers take the standard deduction. Those taxpayers tend to be concentrated in the middle and lower income brackets. Under the President’s plan, married couples would see the standard deduction doubled so that they would not pay tax on the first $24,000 of income.
It would reduce rates for both large and small businesses and job creators, which is also something both Republicans and Democrats have sought to accomplish in tax reform.
Overall, the President’s tax plan would make our country more competitive in the international marketplace and reduce the tax burden on millions of middle-class families.
Clearly, as the effort moves forward, Congress and the administration will have to fill in the specifics. We’ll need to see how the numbers work out and where the votes are for any particular reform proposal.
This is going to take some time. But, as the Chairman of the Senate’s tax-writing committee, I believe we can be ready to move in relatively short order, and I intend to work closely with my colleagues on the Finance Committee, our leadership here in the Senate, leaders in the House, and, of course, the administration to finalize a reform package and get it across the finish line.
The last major tax overhaul in the U.S. was more than 30 years ago. So, we have a once-in-a-generation opportunity in front of us, and I intend to do all I can to ensure that we make the most of us.
Now, when I say WE, I’m not simply referring to Republicans in Congress and the White House. I’m referring to anyone who recognizes the problems in our current tax system and is willing to do the necessary work to fix those problems.
My hope is that this will be a bipartisan exercise.
By and large, Republicans appear ready and willing to work with the President to get tax reform done and I am working to find some willing partners among my friends on the other side of aisle.
I’ve said many times that tax reform should not have to be a partisan exercise. Our current tax system imposes undue hardships on Republican and Democratic voters alike. Therefore, both Republicans and Democrats in Congress should be willing to relieve those hardships, and, as I’ve stated here on the floor on numerous occasions, I am willing to work with anyone, Republican or Democrat, to make this effort successful.
That said, I haven’t been all that encouraged by the rhetoric we’re hearing from our friends on the other side of the aisle on these issues.
Setting aside statements we’ve heard about the policies in the President’s plan or elsewhere, the Senate Democratic leadership, at times, seems bound and determined to ensure that no member of their party engages on these issues.
Most recently, the Senate Minority Leader has insisted on two conditions before he will agree to work with Republicans on tax reform.
The first condition is that Republicans commit to NOT moving tax reform through the budget reconciliation process.
This is an odd demand, one that is, quite frankly, unprecedented in the modern history of tax policy.
Certainly, the reconciliation process makes it easier to move reform through Congress on a partisan basis. But, historically speaking, most major tax bills that have moved through reconciliation have had bipartisan support. There is no reason why, if agreements are reached on policy, Democrats couldn’t agree to support a tax reform package moved through reconciliation, so taking it categorically off the table before discussions even begin seems, at best, counter-intuitive.
History tells us that reconciliation need not be partisan. In fact, when Republicans have had control of both bodies of Congress and the White House, we have enacted tax reconciliation bills have enjoyed some Senate Democratic support.
It’s also worth noting that at various points in the recent past, Republicans have stayed at the negotiating table, participating in formal and informal discussions on major policy matters with reconciliation instructions in place and without any assurances that reconciliation would not be used.
Are Democrats going to be more amenable to compromising on policy if reconciliation is not on the table? It’s hard to see why that would be the case.
Taking reconciliation off the table would really only make it easier for the Democrats to prevent tax reform from passing. So, essentially, what some of my Democratic colleagues are saying is that, before they’ll even enter talks on tax reform, they want us to ensure upfront that they’ll have the ability to block the bill once its brought up.
Like I said, that’s an odd demand, and not one you’d expect to hear from someone who is willing to negotiate in good faith.
My colleagues’ second precondition for working with us on tax reform is that President Trump release his tax returns.
Like their first demand, this one makes me doubt whether the Senate Democratic leadership really wants to be constructive on tax reform.
This is a political demand, pure and simple, likely poll-tested and focus-grouped to please the Democrats’ base.
I don’t imagine this demand is really about uncovering conflicts of interest in tax reform. If it is, it’s a horribly misguided strategy. After all, if tax reform were to succeed, the President is only one small part of the equation.
There are 435 members of the House of Representatives and 100 Senators, all of whom would be called upon to vote either for or against a tax reform bill. And, whether a member of Congress supports or opposes a particular bill, a conflict of interest could potentially influence that decision, just as one could theoretically influence a president’s decision to sign or veto a bill.
Yet, I don’t hear anyone from the other side demanding the release of every member of Congress’s tax returns before we can even start working on a bill. That’s never been a prerequisite for working on tax legislation in the past, and it certainly shouldn’t be in the future.
In any event, despite these unreasonable demands, I will once again state that I am more than willing than to work with my Democratic colleagues on tax reform and I sincerely hope that at least some of them will be willing to do so.
I’ve been in the Senate for a while now. I think I’ve more than sufficiently demonstrated my willingness to put partisan differences aside and to reach across aisle.
Make no mistake, I believe Republicans can move a tax reform package on a purely partisan basis. We have the procedural mechanisms in place that would allow us to do that. But, my strong preference would be to find a bipartisan pathway forward, and I hope that can be achieved.
Speaking more broadly, whether we move forward on a partisan or bipartisan basis, being successful on tax reform is going to require that we practice the art of the doable.
There are a lot of ideas out there on tax reform, and no shortage of competing interests.
I have my own ideas and proposals that I’ve been working on for a number of years that I’d like to see included in the final package.
However, no idea should be considered more important than the broader goals of tax reform. That goes for my ideas, and those of anyone else in Congress OR in the administration.
There is a great deal of consensus among Republicans on the most important tax reform policies and principles. In fact, I’d say that we agree on roughly 80 percent of the key issues, which is a good starting point.
Now, I won’t go into specifics today, but there are some high-profile items in the remaining 20 percent. And, there are some differences of opinion regarding most of those items.
Bridging that gap and finding the path forward is going to take some serious negotiation and compromise. My hope is that people will be willing to adjust their expectations and bend on their preferences in order to achieve success in this important endeavor.
Speaking for myself, I can say that I will be willing to do so, and I have confidence my colleagues who will also be playing leadership roles in this effort are similarly willing. And, perhaps most importantly, I believe the President and his advisors in the administration are willing to make the necessary compromises to finally make tax reform a success.
Mr. President, this is the closest we’ve been to success in tax reform in the past three decades. I hope that all of us – both parties, both chambers, and both sides of Pennsylvania Avenue – are up to challenge.