Good morning, ladies and gentlemen, im ed fullner, president of the Heritage Foundation. Im my pleasure to welcome you to our allison auditorium today where we have the great pleasure of welcoming a dear friend back to heritage. We at the Heritage Foundation have known paul ryan since he was a very young staffer working for heritages distinguished fellow, jack kemp. Jack kemp, as in tax cut kemp. We had the opportunity to work with paul when he was at empower america. When he was a back bench republican member. When he was chairman of the house budget committee, and then chairman of the ways and Means Committee. Now we are honored to continue working closely with him as he serves as speaker of the house of representatives. We value his commitment to the principles that hold the conservative movement together. And we look forward to continuing our close engagement with him, particularly as we work to transform americas tax system in a true kempian american. Its my great honor and privilege to welcome back to the Heritage Foundation our good friend, speaker paul ryan. [ applause ] look, first of all to dr. Fullner and the people here thanks for having me. The first thing i want to say is i want to say how much we, each of us, myself included, owe to this man, ed fullner. [ applause ] the conservative movement has never had a happier warrior or a more flunks one. I get a kick out of the story like he said i have known ed since i was in my early 20s. He tells this story from 1971 about a meeting that he had on capitol hill. Im sure you probable pinot where im going about this. He heard some things about a freshman congressman who had some big ideas about economics. And that of course shocked him. Thats how i came to know jack kemp. It was the very first of many meetings and many exchanges between the two of these great eyan cons of the conservative movement, these great friends. Back then thats basically what you had to do, you had to go door to door to find like minded conservatives. Ed fullner, he changed all of that and he gave us all of this. He helped give us a conservative movement that moves. He inspired a generation to take on Public Service as a vocation, to reclaim our founldsing principles and apply them to the problems of the day. One thing that we know is that ideas alone, they are not enough. That doesnt quite just cut it. If they were, we would have already fixed our broken tax code by you no. I wouldnt be here take up your morning. Bold reform means taking on not just the status quo itself but the people who defend it, who stop at nothing to keep the system rigged. In that spirit im here to talk about a big choice that we have to make. A choice that is just so central to the future of our country. As you know, under president trumps leadership we have released a framework for overhauling our tax code. The tax writers on the ways and means and the Senate Finance committees are currently filling in all the details but the central tenets of our plan are very clear. Our plan will lower tax rates at every income level for families. It will deliver the lowest tax rates in modern history for job traders of all sizes we will end the death tax, repeal the minimum tax and eliminate the marriage penalty. And we will clear out the special interests carve outs and loopholes. We will go from having worst tax code among the industrialized nations to one of the most competitive. And for families, all of this will mean more jobs, fairer taxes, and bigger paychecks. For our economy, it will mean the real growth that has eluded us for too long will restore. So tax reform is clearly in our economic interests. Its also in our Greater National interests. And the reason is this. Embedded in our dna is this beautiful notion that condition of your birth does not determine the outcome of your life. And what affects it, what drives it, its your own striving, its your own sense of purpose 678 if you work hard, you play by the rules, you can rise. If you fall short, you can bounce back. You can make something of yourself and of your dreams. It is this idea that has helped make america so exceptional. Americans so resilient. I have got to say, though, in our time, this promise has dimmed. And for many people, we have barely, barely moved the needle. Look at our tax system today, and you will see a picture of why so many hard working people feel that they are being left out. As our tax code has grown so, too, has its bias against the middle class and the people who are striving to get there. The way things work today, the wealthy and the well connected they have got their prime choice of carve outs. They pay accountants good money to use all of those loopholes. Who can blame them. If washington is going to be in the business of picking winners and losers of course people are going to line up to win the system. Both parties over the years, both parties have enabled this, tucking in this or that pet provision with their own narrow set of beneficiaries. So the working mom out there, right now, with some great idea for a business but no connections, or the Family Living paycheck to paycheck, you know, trying to pay for college, trying to patch up the roof on the house or just build up a Rainy Day Fund for the unexpected the tax code offers you no meaningful relief. It makes you shoulder more and more of the burden. It hurts your ability to save and invest. It drowns you in the tax code so hopelessly complex that you have got to pay somebody to navigate it for you. You never really know how much you are going the pay. And thats kind of the point. Or, or, you just may not be able to afford that. So you are just going to try to figure it out on your own. Maybe you overpay. Or maybe you make an honest mistake. And then you end up getting a call from the irs. Meanwhile, the well connected they have got the resources and the wherewithall to find just the right loophole or benefit. As we stay locked in this cycle other countries just keep passing us by. We are losing jobs to countries like china who are traction taxes their businesses at much, much lower tax rates. Our foreign competitors are more than happy to take the growth in their businesses. This tax code is sapping our aspirational spirit. And it enables our decline. Its just that simple. So this is no time to shy away from taking on the defenders of the status quo. You know, the special interests who prop up this tax code they seek to extract the most value for themselves, even if it means keeping the country on the path to decline. The last year brought us a lot of new hope. If we choose to do nothing we allow struggling to get by to become the permanent normal. We allow stag nation to become our way of life. And you know as well as i do that if we fail to restore real growth and opportunity that plays directly into the hands of the left. Stag nation is the breeding ground for a classbased society where elites in washington seek to micro manage and predetermine the path of our lives. They would rather equalize the outcomes and lull us into place of dependency. We know how this movie en, we have seen it many times before. We cannot let this happen, not here in this country. So right now weve got a chance to get off the downward pocket. To remove these barriers of upward mobility. To restore the value of work and i think knew ingenuity. The question is this, are we going to be a country that renews its promise or leave things in a state of decline. Are we going to leave things better off or just going toly . Else a not about the tax code, what our rates are, its about something much more profound. This is about what kinds of livelihood people can expect in this country. Its about whether moms or dads can afford to send their kids to college or save for retirement. Its about the dignity that comes with being able to take care of your own. All of us have talked about tax reform for years, for decades, in eds case. [ laughter ] the moment, the moment is here. And the moment is now. And like any opportunity of a lifetime, it has to be seized. We have to choose to turn this page. We have to choose to do this. You all know this. An army of lobbyists will come to protect the special interest provisions and to derail tax reform. And when that army comes, we must be able to count on the foot soldiers of the conservative movement to see this thing through. Hard working families gain nothing if we slip into complacency. They gain nothing if we allow ourselves to be distracted. Our workers do not see their paychecks rise one penny if we shrink from this moment. We know who we are for. And we know what needs to be done. And now we have to have the resolve to achieve what we have fought for for so long. Now rest assured you are going to hear and we are already hearing the same recycled stale criticisms from the nay sayers and the defenders of the status quo. These are the folks who believe that we can just tax and spend our way to prosperity. These are the folks who helped rig our tax system to benefit entrenched interests in the first place and are intent on keeping it that way. I say lets have the debate. Tack telebaseless arguments head on, brilliant it on. Where better to start than the same tired old line of attack that this tax cut is at the expense of the middle class. How original. They have been saying this stuff for years, as long as i can remember. Do you know what the ironry of all this is, a tax system that disproportionately benefits the wealthy instead of the middle class, thats what weve got right now. It works best for those who know best how to take advantage of all the breaks and deductions. Under our plan people get real relief. We are lower rates so we can keep more of what we earn. There would be three brackets instead of seven. More family will get a break. So in reality, this plan is really the single most important thing we can do to help the middle class. Lower tax rates, a larger standard deduction, a bigger child tax credit, and a code that is simpler and fairer for everyone. They will tell you that eliminating carveouts will actually hurt middle class families rather than the special interests. This one takes the cake. Give me a break. Most hard working americans never see a dime from these loopholes, instead these pet provisions reward the few and keep rates artificially high for everybody else. They yes, we are going to throw out the special interest loopholes that riddle our tax code. While doing that, we are going to preserve the incentives that people rely on for Home Ownership and charitable giving, we are going to simplify benefits for work, retirement, and higher education. This is so important. Because our tax code does not only complicate your life every spring. It complicates the most important decisions families actually make. It just adds to the stress. Heres an example. Families trying to send their kids to college had to sift through about a dozen different tax breaks and about 100 pages of irs instructions just to figure out if there are benefits that could help them. We are going to simplify all of this. To the point that most americans, most americans, will be able to file their tax on the form the size of a postcard. One just like this. You know what . For defenders of the current system, this thing, this right here, this is their worst nightmare. Because this empowers people to see how much they are paying, and why. This increases transparency. And we know how terrifying a proposition that is for the irs and the defenders of the status quo. Finally, and this is this may be one of the most off base charges you are going to hear. They will tell you cutting the corporate rate only helps the fat cats. Here is what a candidate for president in 2012 said. Quote, our current Corporate Tax system is outdated, unfair and inefficient. It provides tax breaks for moving jobs and profits overseas and it hits companies that choose to stay in america with one of the highest tax rates in the world. End quote. Do you want to guess which candidate that was in 2012 . It wasnt mitt romney. That was barack obama. Now, it is true that because of all these loopholes and deductions, many corporations dont actually pay the 35 statutory rate. That actually proves my point. If we get rid of these special interest carveouts and cut the statutory rate, corporation also pay what they are pay what they to pay. That is what we mean when we say the system will be fairer for everyone. Fixing the business side of our tax code is really about helping families. Cutting the Corporate Tax rate means more jobs right here in the United States. It will foster increased competition. You know what higher wages means . Higher wages means bigger paychecks. Bigger paychecks and lower tax rates means more money in your pocket. And more money in your pocket means a better higher standard of living. Over the past several months ive been traveling the country visiting with companies both large and small. I tour factory floors. Ive talked about incredible people making things right here in the United States. The people who are developing Cutting Edge Technology and who are reviving american manufacturing. Its really impressive to see. Its in spite of ferocious international competition. Wherever ive gone, i hear the same exact thing. Our tax code is crushing growth. We have less to invest in equipment and research and development. We have less to invest in jobs and less to invest . Wages. Well, the defenders of the status quo are content with having a tax system that drives good paying jobs overseas into perhaps trillions of jobs abroad. We want to give them a clearer advantage over foreign competition n. Territorial system like the one we propose will allow us to bring profits back home. In fact, in the National Association of manufacturers, they just did a survey last week. They found if enacted, according to their survey and their members, a majority of manufacturers in america will raise their wages and hire more workers. Thats what you get when you get tax reform. Higher wages. More jobs. Higher standard of living. And if we were really truly serious about creating more jobs, we need to help out our Small Businesses in a big way. Thats where most of the jobs come from. That is why we are proposing a new lower tax rate strauucture r all Small Businesses. That is the kind of bol reform that will revive main streets all across the country. Look, working together, house, senate, president trump, we will see this thing through. Because this is a choice at hand. More decline instagnation or the renewal of the american idea. Protect powerful interests or empower the people who work hard and play by the rules. In the end, it will not be me who decides what to do. By now i think you get a sense of what i skpbelieve and where stand on tax reform. It will be this movement which decides which direction we take. It will be all of us in the deserve movement who decides who direction to go. We will do something so historic that it really improves peoples lives and put this is country on the right track. And if we do not, if we let up and lose our nerve, its not going to come back. I am under no illusions about how difficult this is going to be. It hasnt been done since 1986. But we cannot rest. I will not rest until this work is done. Thank you very, very much. [ applause ] boy, that was terrific, paul. I was on stewart var knvarney. I committed a blooper. Cut the business rate down to 20. But you talk about reform. Its both. I talk about you have to reform the code itself so that the game sent rigged so that weem get people get to keep more of what they earned. Its cutting taxes, cutting tax rates, letting families keep more of what they earn but reform the system. As you travel around and meet with Small Businesses, et cetera, do they does the mom and hop pop bakery understand the appropriation, expensing instead of deducting . For sure. Small businesses completely understand expensing quite a bit. If they can expense a truck or a piece of equipment. If its a Small Manufacturer with 25 employees, which is really common where i come from, theyve got cnc machines, they know what expensing is, because they know what piece of equipment and how long it takes to write them off. You walk through a factory in wisconsin with ten thousand square feet, they will say that takes 10 years, my tax rate is 38 . They know their tax rates. Overseas which where i come from means lake superior. We compete directly with canadians in wisconsin. Thats the way the world goes. They tax all their businesses the 15 . 80 f oof our businesses are no corporations. Theyre l. Llcs. Their tax rate is north of 40 in many cases. The average tax rate on businesses in the industrialized world is 22 1 2 . So businesses know this. Businesses know that in tough competition where our economy has been pretty flat and steal, 1 to 2 growth, its really hard. More importantly, theyre getting crushed in international competition. If theyre in any kind of International Competitive industry, which is most industries these days. Businesses big and small know this very, very much. I hear two things. The regular la totore states kg me and taxes are putting me out of business. We know we get this tax system fixed, we get these tax rates down, were going to be in really, really good shape. As i look around at the conservative movement and the leaders of the conservative movement, i cant think of anybody around who isnt enthusiastic about what youre talking about, but then i look at some of your own colleagues in the house. Whar you goi what are you going to do about deductib deductibleability of state and local . This is why it hasnt been done since 1986. I really see the conservative movement is as unified about this as it has about anything else ive ever seen. I feel very, individual good about where we are. Thats not always the case. For sure. But thats the thing we have to get over. Its really the general interest is going to have to trump over the special interest. Things like state and local deduction which i would argue were propping up Big Government states and were having states that got their act together pay for things that didnt. Wisconsin versus illinois rushes to my mind. So these are the issues that we have to help members see the big picture. And by the way, if people by doubling the standard deduction, low are peoples tax rates and getting rid of the mayors penalty, people are going to be better off. Thats the point we have to make and we have to appeal to the general interest which is you want to grow jobs, you want american businesses to stop leaving this country, where i come from, the Biggest Company we used to have headquartered in wisconsin was Johnson Controls. I bet you the thermostat on the wall is probably a Johnson Control thermostat. They are an irish company. Their worldwide tax rate and 12 1 2 , not 35 . Thats happening all around the country where businesses are up and moving because of tax policy. And theyre being bought by Foreign Companies and the headquarters are leaving and were losing our seed capital. So i think for lots of reasons, members are beginning to appreciate there may be some narrow thing they dont particularly like in this, but the broader picture so clearly prevails over the narrow view and that this is good for the constituents and very good for the country. Thaet w thats why i feel very good about where we are in the house. And the senate. Little more challenging maybe, right, dave . Where we are right now, middle of october, weve got i dont know how main legislative days and youre not always in when the senates in. Thats this week. How many times do you pass something that just goes over and it sits on the Senate Calendar . More than 100 items sitting over there. Its 273, but whos counting. Maybe 274. Yeah. Were going to keep it until christmas if we have to. I dont care. Weve got to get this done. Its just that important. And so we are actually on track timeline wise. The house passed its budget resolution. The senate got it out of their committee. Next week theyll move their budget resolution. Then well go to a conference committee. Pass that conference report. The ways and Means Committee will put their bill out. They have to get a revenue line. Then theyll put their bill out. Then well go to markup and well go to the floor. Well get it over to the senate in november. And then the senate will process it. That gives us time to get this thing done in law. So our point is get it done this year. We want to wake up on new years day with a new tax system. We get a new tax system in the begin of 2018, that means all of 2018 is a good year. I really believe we can hit at least 3 economy in 2018, the difference between a 2 economy and a 3 economy is trillions. Its higher wages, bigger paychecks, more take home pay and growth and opportunity abound t. Real abound. It really is that big of a difference. You go back to the reagan years and it wasnt just three. When you get three, its easy tore get to four. Thats exactly right. Its so much better for everybody as you look ahead and move ahead. As you know, i had the opportunity to talk with the president not long ago and i urged him to get his cabinet out there talking about this same thing. Are you doing this with all your members . Oh, yeah. Absolutely. Theyre all on the same message . Absolutely. Right, dave . They really are. Were crisscrossing the country. Were doing events. I do quite a few events around the country. I was just in pennsylvania at a forging business. I was just over with andy harris on the other side at a manufacturing firm. So were doing events all over the country. Great. And you talked about the other body. Obviously youve got great members like your own ron johnson. Are we are we making inroads with dems . I think the answer is yes. The reason we wanted to do it this way is a lesson we learned from health care. The house passed its Obamacare Repeal and replace bill back in may. And then the goal then was well get this done in may and you guys in the senate get yours done in june and well wrap this up by the fourth of july. That was the plan. The senate took months. Tried to get this thing called the skinny budget. That didnt work. They tried to get graham cassidy. That didnt work. What we decided to do was lets put more time and energy at the front end of the process to get everybody on the same page to agree on this framework, which was this framework was written by the Senate Finance committee and the house ways and Means Committee with the trump white house, with treasury. So that we have a framework that we agreed to ahead of time. Put that out and now those tax writers filling the details inside this framework. By doing four months of spade work ahead of time by getting us on the same page, that makes the actual process of staying together and hitting our timelines that much easier. Thats. 1. 2, i think as republicans were wired much more similarly. Our dna is on tax reform. Especially this kind of tax reform, broaden base, lower rates. We dont have border adjustment. We just wanted to get the consensus and thats what this reflects. With republican tspect to democ cant imagine a democrat from a state like main, a manufacturing state like indiana or north dakota missouri would just decide to vote with the ideological left against their own constituents, who are farmers and ranchers and Small Business people who are struggling as much under an oppressive tax system. I understand theyre going to vote ideology on the party line on judges and things like this, but on something on rudementary, something to clearly in the interest of the constituents, i cant imagine we wont get votes from some of these democrats. Theyre saying the same thing were saying. I just quoted barack obama on the need to lower Corporate Tax rates. I really do believe theres going to be a bipartisan support for this. Given that were wired the same way on tax reform, i feel like were on the same page. The last point ill say unlike health care where we could only put half of what we wanted to, a lot of that regulatory stuff, the whole bill goes into this. This is a one and done effort. Meaning the entire tax reform package, the entire tax cut bill is in one bill that is through reconciliation which cannot be filibustered. That makes it easier to pass. Thats when the president signs and thats it. Thats right. This may be a little off point. I dont know if youve traveled much overseas. A couple times in europe in the past couple months im always asked are you guys really serious about tax reform. They say it almost a little bit concerned. Because boy, if the United States really coming back worldwide, theyre worried. Theyre worried for their own businesses. I just talked i just mentioned Johnson Controls, their headquarter is cork ireland. You go to these other tax jurisdictions, theyre been pulling our Companies Left and right. Switzerland, a ton have gone to switzerland. Were miller people where i come from. But budweiser is a pretty popular brand. Their headquarters arent in st. Louis anymore. Its in belgium. Thats happening all across the world where Foreign Companies are buying u. S. Companies because of tax reasons or u. S. Companies are just inverting. So yeah, i think a lot of foreign countries, they see a huge advantage over us because were doing it to ourselves. When we lower our tax rates below the international average, we are going to lead again. We basically have the worst code in the industrialized world. The worst code. And were going to be in the front of the pack. That will be thats what we did in 86 and look what happened as a result. It was a Phenomenal Growth in jobs and investment and opportunity. The anxiety we have in america today, theres a lot of reasons for it. Economic stagnation is one of the reasons for it. That is the stuff of anxiety. That is the stuff of the polarization we see in america. We get growth and opportunity restored and confidence restored in this country which is what tax reform gets you, its going to help a lot of our problems. Y its not going to solve every problem, but it will make them a whole lot better. They sure will. Our mentor would be very, very proud of you. Appreciate it. Thafrp thanks for coming back. Appreciate it. [ applause ] were waiting to hear from general joseph otell as he speaks at the annual policymaker conference. It will focus on countries also that were not given their due in the one in paris. And they have to do with arabia and the gulf. As i said, the one area of the planet to which america is mobilized more than any other and the one that americans understand the least. So stay tuned and if any of you are so inclined to be interested and supportive, please let any of us know. Well need your help. So ive been asked to introduce the introducer which is both an honor and sort of a humbling experience because if you know anything about the keynote speaker and his introducer, youll realize that its like being the opening band before the doubleheader of Bruce Springsteen and frank sinatra. But ill shoulder on. So it is a delight for parsons and on behalf of parsons to sponsor this event and also to be able to