Good morning and welcome to today’s hearing on the disappearing corporate income tax.
It has been two years since the Minority passed their tax bill without a single Democratic vote. The Republican law was a massive giveaway to the wealthy and big corporations and provided only modest and temporary relief to hard-working Americans and their families.
It was irresponsible - costing $2.3 trillion and resulting in deficits as far as the eye can see. It was unfair - further concentrating wealth in the hands of those who need it least. And, its passage was marked by a string of broken promises. It has failed to unleash economic growth, raise families’ annual incomes by $4,000, or pay for itself.
Just yesterday, the Trump Administration released its proposed budget. The President might promise to deliver economic protection to hardworking Americans, but his budget reflects his true priorities. Make no mistake - the Trump Administration wants to double down on cuts to Social Security and Medicare, and on tax cuts for corporations and the wealthiest Americans, without fixing any of the poor choices that were made in 2017.
We are here today to examine what’s left of the corporate income tax. As our witnesses will explain, the corporate income tax falls short of what our country needs. The corporate tax rate in the Republicans’ law ultimately landed at 21%, giving corporations a windfall compared to the 25% rate initially proposed by Committee Republicans and the 28% rate proposed by the Obama Administration.
Twenty years ago, we had a budget surplus. Corporate tax revenues were twice as high as they are today. Now, corporations are paying less than ever, and corporate tax revenues are at their lowest level in history outside of a major recession. Some large corporations pay zero year after year. It is therefore not surprising that we collect less corporate tax revenue than all but one of the other OECD nations.
Predictably, the tax benefits reaped by large corporations are not trickling down to workers. The White House promised American workers would receive $4,000 more in their paychecks. This has not happened. Instead, what we have seen is over one trillion dollars in corporate stock buybacks, enriching the wealthiest. Workers continue to wait for what they were promised.
The law was jammed through Congress, leaving much to be done by regulation. And, unfortunately, Treasury gave away the store by issuing regulations that give even more tax breaks to corporations, and that are likely to further increase the deficit.
To make matters worse, because of extensive budget cuts, the IRS cannot even ensure that corporations are paying the little they do owe. Audit rates for some of the largest corporations are lower than audit rates for low-income taxpayers, including those receiving refundable tax credits like the Earned Income Tax Credit. This is unacceptable and harms the integrity of our tax system.
Corporations should pay their fair share of tax, just like every day Americans do. Soon, more than 150 million Americans will file and pay the taxes they owe. They will wonder why big corporations are not doing the same. I hope Committee members can work together on real tax reform that will give a fair shake to all Americans.
And with that I will recognize the Ranking Member, Mr. Brady for an opening statement.
