(202) 224-4515 Katie Niederee, Julia Lawless
Hatch: America is Open for Business
In Speech at U.S. Chamber of Commerce, Utah Senator Says, “We want companies to stay in America, grow in America, and come to America.”
WASHINGTON – In a speech at the U.S. Chamber of Commerce today, Senate Finance Committee Chairman Orrin Hatch (R-Utah) highlighted how the new tax law is increasing America’s global competitiveness and creating a better environment for American job creators to grow, hire, and invest in the United States. Hatch delivered the remarks at the U.S. Chamber of Commerce’s “Invest in America” Summit.
“We’re getting reports of American multi-nationals…that are reinvesting their overseas profits back here at home,” Hatch said during his remarks. “We’re already seeing tens of billions of announced re-investment in the American economy, which will mean more work for American suppliers, builders, contractors, researchers, technicians, manufacturers, and many, many others.”
Hatch continued, “America is open for business. We want more investment in our country, and we are working to put in place policies that will facilitate that. We want companies to stay in America, grow in America, and come to America.”
Hatch’s full remarks can be found below:
Thank you very much. That was a very kind introduction.
I am grateful for the opportunity to be here today. I always relish an opportunity to come speak at the Chamber. The people here – from Tom Donohue all the way down – do great work advocating on behalf of America’s business community.
You all provide helpful information to Congress and, when we need you, you do a great deal to educate the public on policies that will help our economy grow.
I have to thank the folks at the Chamber and all those here who worked with them in our recent push for tax reform. I think the support of the business community was key to our success in that effort, which has already started to pay off.
In recent years, we’ve also worked with the Chamber on issues like enacting Trade Promotion Authority and long-term highway funding. And, in each case, the people here at the Chamber came through to deliver much needed information, advocacy, and support.
I am very excited to be part of today’s Invest in America Summit. There is a lot to talk about and more than enough reasons for all of us to be excited about the near future.
This really is a fantastic time to be doing business in our country. America has always been driven by an innate entrepreneurialism that seems to be encoded in our DNA. And, generally speaking, over the course of our history, our government has usually tried to foster that spirit, encouraging our people to think and dream big and to put in the work to make those dreams come true.
You’ll notice I said usually, not always.
Indeed, in recent decades, the government had been saddling our economy with a proverbial ball and chain that dragged down wages, discouraged growth, and stifled our nation’s entrepreneurial spirit. I don’t think many of you will be surprised to hear me say that the ball and chain was our burdensome and arcane tax code.
We finally fixed that. Yet, in developing the tax reform bill last year, we faced, quite frankly, a media onslaught. We dealt with the normal accusations – that we were taking from the middle class and giving to the rich and to greedy corporations. These were expected, but, to be honest, this time around, they were a little disheartening and very disingenuous.
We made the case that our bill was focused on helping the middle class, and even the corporate tax reforms were intended to serve that purpose.
We made the case that our business tax system was outdated and needed to be modernized to keep up with foreign competitors.
And, we made the case that moving to a territorial tax system would prevent business and investment from moving offshore and bring more of it back to the United States.
With the help of a number of people in this room, I think we made all of those cases effectively. Still, we never really got a fair shake from many of our friends in the pundit class.
But now that people like Erin Parker, a high school teacher, whose husband owns a family business in San Antonio, Texas, are looking at what the reformed tax code means for their family, more independents are starting to realize the benefits of our work on tax reform.
Heck, even a New York Times poll found that while only eight percent of self-identified Democrats supported the bill in December, that number has jumped to 19 percent in just two months.
I mention these latest reports to demonstrate that once Americans actually started to see what the tax law does, they’ve started to support it.
I think people are recognizing that our work was actually the culmination of bipartisan efforts that took place over many years. We didn’t just write our bill in some backroom. We weren’t drafting new policies on the fly. All told, this process, over the years, benefited from more hearings and more stakeholder input than just about any other effort that I’ve been a part of.
And, in the end, the results are already starting to speak for themselves, as more and more companies announce wage hikes, bonuses, increases in retirement benefits for workers, and increased investment. And nearly all of the credit for those investments in workers and our economy has gone to the new tax law.
We’ve seen companies like Cigna Corporation, which has raised its base wage to $16 an hour and improved its employer 401(k) matches.
And let me give you a long list of utility companies that are lowering rates on energy and electric bills for customers across the board because of tax reform: Dominion Energy Utah, DTE Energy, Duke Energy Carolinas and Duke Energy Progress, Eversource Energy, Green Mountain Power, Gulf Power Company, Consumers Energy, and many others – because that’s actually only part of the list.
This is a plain, straightforward benefit for middle-class families, one that they will benefit from every month. It also means reduced costs for businesses. Thanks to the new tax law, companies can manufacture, store, transfer, build, research, innovate, create, paint, draw, exercise, plant, till, mow, lathe, carve, and keep the lights on for less.
In the end, this means more investment in jobs and growth and lower costs for American consumers.
We’re also getting reports of American multi-nationals – the bad guys, according to some misguided politicians and pundits – who are reinvesting their overseas profits back here at home.
I’m going to give you another partial list of companies who are re-investing in the American economy:
- The Kraft Heinz Company, $800 million
- AT&T, $1 billion
- FedEx, $1.5 billion
- Apple, $30 billion
Ladies and gentlemen, we’re not even through the first quarter of 2018. Yet, we’re already seeing tens of billions of announced re-investment in the American economy, which will mean more work for suppliers, builders, contractors, researchers, technicians, manufacturers, and many, many others who want to do business here in the United States.
It has, perhaps, never been truer to say that a rising tide will lift all boats.
Of course, I’m still not done.
Tax reform is also helping to create better conditions and opportunities for workers here at home. Take, for instance, Starbucks, a company directly benefitting from the new tax law, which is now providing $120 million in wage increases, improving sick and parental leave benefits, and creating 8,500 new jobs.
There is the Bank of Hawaii, which had been “thinking about” increasing their minimum wage for quite a while now, but finally pulled the trigger after we passed tax reform.
According to some recent estimates, if you combine all the publicly announced bonuses, wage hikes, and benefit expansions, at least four million American workers are already set to gain as a result of tax reform. And, like I said, we’re not even to March yet.
We could, I suppose, bask in the vindication most of us are probably feeling at this moment. But, that’s not why I was invited here today, and it’s certainly not the purpose of this conference. So, to get back on topic, let’s talk about what all of this means for foreign investment in America.
The new tax law has reduced the corporate tax rate from the highest in the industrialized world to slightly below the average for OECD countries.
This, of course, means that, for anyone investing in the United States, the federal government will be taking a significantly smaller portion when profits start to be realized. And, frankly, there are only a few places in the world with the protections and assurances provided by functional governments that are going to take less in taxes.
Long story short: America is competitive again.
I certainly cannot take credit for this idea. Reducing the corporate tax rate to put us on par with our most significant international competitors has been a cause supported by Republicans and Democrats alike for years.
In fact, prior to last year, there were very few people outside of a Bernie Sanders rally who would honestly argue that our corporate tax rate did not need to come down. Of course, when it came time to produce and pass a tax reform bill, some of my colleagues found religion, so to speak, just in time to decry the reduced rates in our legislation and argue that American businesses and job creators do not pay their fair share of taxes. Others argued that reducing the corporate rate would only benefit corporations themselves, their rich CEOs, and their wealthy shareholders.
They’re still making those arguments, even with all the announced benefits for workers that we’ve seen. The latest salvo is a claim that the gains being enjoyed by workers are mere “crumbs,” while the real money is going to stock buybacks, which, once again, they claim only benefits wealthy shareholders.
The only problem with that argument is that nearly four out of every ten dollars invested in stock ownership is currently held in retirement plan accounts. That is the largest owner category of overall stock ownership in the United States. Those stock buybacks decried so loudly by some of my friends on the other side have increased the value of those holdings, meaning the biggest group of beneficiaries are people with pensions, IRAs, and 401(k)s. Those are middle-class Americans directly benefitting from a practice widely condemned by the opponents of tax reform.
Now, I don’t mean to get overly partisan. And, I’ve digressed a little. My point is that these lower tax rates and increased investments will, in both the long run and the short term, benefit Americans across the board.
In addition to lower tax rates, the new law finally did away with the overly complex and draconian worldwide tax system and replaced it with a much more competitive territorial system. And it did so in ways that are in accord with our international commitments and obligations. Simply stated, movement to a territorial system means that investors will pay taxes—for the most part—only on what they earn here in the United States. Gone are the days where complex transfer pricing, foreign tax credits, and competing patent-box regimes drove companies, investment, and business activity out of the United States.
The pressure for companies to invert or be taken over or to otherwise move investments offshore has, to a large extent, been relieved. And, the disincentives for companies to invest and grow businesses here in the United States have, to a similar extent, been eliminated.
As a result, America is now the place companies will want to set up their headquarters, instead of moving their legal headquarters to lower-tax jurisdictions overseas.
These two elements – lower tax rates on businesses and conversion to a territorial tax system – have been key to our efforts, and once again, have received broad, bipartisan support for years. In putting together our legislation, we recognized there was significant merit to this approach.
But these moves to put American businesses on par with the rest of the developed world are just the tip of the iceberg. We made countless other reforms that will stimulate the economy and buoy businesses that have long been struggling.
And we did all of this while keeping parity in mind.
For example, thanks to the work of many of our members, we were able to craft a pass-through deduction regime that provides virtual equivalence to the corporate rate. Now companies can choose whether they want to have a partnership, corporation, LLC, or sole-proprietorship based on the merits and structural benefits of those organizations instead of thinking purely about reducing tax liability.
But, let me shift gears for just a moment, because, if we’re talking about investing in America, we need to talk about our trade policy as well.
As I hope you all know, I have long supported free trade and the reduction of trade and investment barriers for American businesses and consumers. That is the thrust of the original NAFTA, it is the purpose of KORUS, and it is the reason for the many other free trade agreements we have in place.
I want you all to know that my resolve to continue that work remains.
I feel, perhaps more passionately than ever before, that we should be tying the world together with our ideas and exporting American innovation and values throughout the world.
That is why I have urged the President to seek new FTA partners, to update NAFTA to protect U.S. intellectual property rights, to increase trade and investment in North America, and to address the concerns of U.S. businesses exporting to Korea while continuing a close economic relationship with this important ally.
It is equally important for us to combat trade practices by foreign nations that harm American businesses and undermine the world trade system. But the tactics we choose must be targeted directly at specific countries and specific practices. For example, as the Administration considers remedies under Sections 232 and 301, we must keep in mind that tariffs aren’t paid by foreigners. Tariffs are taxes paid by American businesses and American families, and new tariffs would jeopardize some of the opportunities we successfully created through tax reform.
I am confident that, despite the many naysayers, this vision of American-led free trade will not only endure, but will continue to grow and expand. That is the path forward to a better world. And, in my view, any other path would move our country backward.
Now, there’s more that I could talk about, but I can sense that many of you are ready to leap out of your chairs to start building that factory in South Provo, Utah you’ve been eying for years. But before you leave, I want to make something abundantly clear to everyone in this room: America is open for business.
We want more investment in our country, and we are working to put in place policies that will facilitate that. We want companies to stay in America, grow in America, and come to America.
Ok, now, if you can’t wait any longer, please step out into the hall and make that call to your CFO.
For everyone else, let me just say thank you for having me here today and for listening. And, of course, thank you for all the work you do to make our country a better place to start a business, to watch it grow, and to see it thrive.
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