Finance Committee Turkey race of discussed the prospects are changes to Corporate Tax policy at a forum hosted by the urbanbrookings Tax Policy Center. This is about 30 minutes. Good morning, everybody. Welcome to todays event sponsored by the Tax Policy Center. My name is mark mazur, and the director of the Tax Policy Center which is cosponsored by the urban institute and the brookings institution. Ive been at a Tax Policy Center for just over a month and im excited to be part of this fantastic organization. We had a Wonderful Program today covering prospects for corporate or Business Tax Reform and featuring a number of perspectives. We have senator wyden to provide alleges that perspective. Where professor and touched t professor albert are back, a major step toward reform followed by a panel of experts to discuss the pros and cons of this approach. We will finish up today with doug holtzeakin providing his views on the need and prospects for Corporate Tax reform. As we go to the program today encouraged the audience to use the hashtag life at urban when commenting on todays event. In addition for those viewing webcasts the want asked ask ques complacent those questions the email to events at urban dot or g. We will have some modern to the mailbox so these questions can be folded into discussion. For people and audience here today there are comments cards under chairs the question to senator wyden. All the other q a we will pass route a microphone. I think thats it for the housekeeping announcement i have so let me turn to a formal part of the program today and it is our keynote speaker senator ron wyden. Senator wyden is a Senior Center from oregon having served over two decades in the exit soon after distinguished house career. Senator wyden is currently the Ranking Member of the Senate Finance committee which oversees federal policy, trade policy social security, medicare and medicaid in many other programs. Senator wyden is well known for his work ethic and his commitment to developing Bipartisan Solutions to our nations problems including broadbased tax reform. Several years ago senator wyden teamed up with then centigrade for a bipartisan tax reform to determine approximate reveling neutral as advertised. It was updated with senator coats. Senator wyden and i have more in common that a longstanding interest in tax. We both have degrees from Stanford University and an interest in basketball. The senator as by far a more Skilled Labor im pleased we get to concoc concocted a fit with s of senator ron wyden. Thank you. [applause] keeping this basketball analogy in perspective, i think weve got the nba allstars here of the tax reform debate here at urban with eric and mark and mr. Poster. Mark, thank you for the inflation or introduction to each time you come here, your introduction gets more inflationary. And we are now at the point where i can say my parents would have loved it, and probably even believed it. So thank you for that, and this program could not be more timely. We obviously have the administration saying that theyre going to do tax reform by august, and so want to give you a little bit of a sense of how i think the debate is going to play out, and then come around full circle to what i think is the prerequisite for doing it right, and that is a bipartisan approach. Now, everyone remembers the Trump Campaign slogan, make America Great. Its supposed to be on coffee mugs at the west wing, and when ever you bring up a policy issue with the administration they always say, hey, this is part of we are going to make America Great. So i want to start by way of saying when it comes to taxes, as of now the Trump Administration is not going to make America Great again. Theyre going to make tax shelters great again. And im going to outline some specifics so that we can really frame the discussion. Nothing could be clearer than carried interest. This of course is a favorite of wall street, used by Investment Fund managers to redefine the income Capital Gains and shrink their tax bills. So on the campaign trail, candidate trumps singled out carried interest as a loophole that he was going after, and it really liked mikey and jeb bush were going to race each other to see which one of them could pound the thing into populist turf. In fact, candidate trumps that and ill quote, the Hedge Fund Guys are getting away with murder. They pay nothing. Its ridiculous. That pledge pretty blunt earned him a lot of plaudits from across the spectrum. It added to the populist groundswell that helped him get elected. The problem, however, is the trump pledge on carried interest turned out pretty much to be another head fake. Since the election we havent been able to find a tweet about it. Apparently Hedge Fund Guys getting away with murder wasnt quite enough, because when you do the math, instead of those Hedge Fund People paying their fair share, the trump plan actually gives them a 37 tax cut. So juxtapose what was said in th when you do the math, and its not exactly what its cracked up to be. Then of course when you couple that with the Capital Gains change, 23 a, to 60 , if you can find another gimmick which apparently the white house and the Majority Party are looking hard for, you can get on another path to drive your tax rate down by just redefine it as a capital gain. And, of course, all of this is juxtaposed by the fact that ronald reagan, that wellknown socialist, that wellknown lefty, was happy to do tax reform that said income from a wage and income from investment to be treated equally. A second example of how we are looking at making tax shelters great again, at least from the trump side, is there infrastructure proposal. This is an 82 tax credit on the Equity Private investors put up for a project. Now, i want it understood, i dont take a backseat to anybody in terms of investing in infrastructure. Im very proud of the fact that in 200 2009 i wrote the build america bonds program. No would turn out. More thann 180 billion when the build america bonds sold, and a year and half. Others away to get private money off the sidelines, but not by doing some kind of giveaway to developers. And the reality here is, i mean, talk about tax shelters. From he uber fortunate investor. 82 tax credit on equity they put in, no guidelines or restrictions on the kinds of projects you are financing. In effect this is the american taxpayer just heating money straight in to the pockets of the most fortunate. And my sense is that without anything resembling ground rules, youre going to get billions of dollars if you pass it in this way going towards duplicative duplicitous projects that have wouldve gone ahead even without much taxpayer heaven. And by the way, in case anybody is curious how this might be paid for, that there is it would be paid for by tolls on workingclass families. So talk about to tax systems, breaks for people at the top, paying for it with tolls on workingclass people who, by the way, my guess is some of them voted for donald trump because they didnt think he would do things like putting toon so my third example about tax shelters would be great again is the dynasty trust. Now, get beyond the Marie Antoinette type name and look at how the shelter works. This is a gimmick that allows the most fortunate to avoid paying estate taxes, not just for a generation or two, but forever, underline forever. Now the Obama Administration once again came forward with a really radical idea. They said lets limit the loophole to 90 years, 90 years. Not long enough apparently for the trump fol, and maybe some of that has to do with the fact that the appointment on tax reform, treasury secretary Steven Mnuchin, has a personal interest in the type of tax shelter since he had one of them among his nine trusts. Now, heres with a tax shelter gets even bigger. In addition to protecting dynastic wealth, theres evidence that members working with the white house want to repeal the estate tax altogether. Im talking about their helping the really, really thin margin of taxpayers at the very peak of the income. We are not talking about family farmers. Were not talking about Small Business owners or middle income people. Were talking about people at a very, very very top. A fourth example of how tax shelters are best in business is coming from the most obscure corner of debates, but can really show how a tax cut can be commandeered to make tax shelters great again. This one is not as the codification of the economic substance doctrine. Now, i know that people this weekend are not going to be going to the coffee shops of america and saying lets really dive deep into the economic substance doctrine. Not dinnertable conversation. But judges develop the doctrine of economic substance over the years as a way to shut down tax shelters. The Affordable Care act included a provision strengthening this plication aimingo shut down more sheer it has made a difference. Now we see that republicans want to repeal it. So that really brings me to the issues that in going to wrap up on, and my sense of where things are, and then why i continue to be that there are opportunities if people want to set aside these kinds of policies i just described and do bipartisan tax reform right which, of course, as a model that actually we can look to. My own view is the heart of the tax challenge is dealing what i describe as the tale of the two tax codes. If you are a wage earner, youre a welder in portland, oregon, or a nurse, your taxes come right out of your paycheck, come right out. They are compulsory. No special deals in the cayman islands. You can see the numbers right on your pay stub. So thats one tax system. Then we have another tax system for the wellconnected, and theyve got is huge array of talent, all these lawyers and accountants, and they make it their specialty to do tax gains. So in the second world you can, to great extent, pay what you want when you want to, and if youre really clever, virtually nothing at all. And when i look at what is now on offer by the Trump Administration and republicans in the congress, i dont see anything that roots out the unfairness that i just described here in fact, it would get a lot worse. The president said the team is working on a phenomenal tax plan, phenomenal tax plan. Its going to be really soon. With massive tax relief for the middle class. Now, Steven Mnuchin came to the finance committee. I visited with him early and i said, man, i think that sounds pretty good. And he had been talking about how there would be no absolute taxcut for the upper class. And i said, that centrally good. And he talked about in the office. So when he sat down with the committee and we got to the questions, i said, you know, im just really pleased about this. I think were going to call this the mnuchin rule. Said i to the nominee. Heres a statement region responded toeed, andm going to quote, senator wyden, by the way, i want to thank you for a nap and great esteemed of having the mnuchin rule with both a buffett rule and the boca rule. I think that as a great complement, said mr. Mnuchin, aa nominee to the Treasury Department to me. Sounded pretty thrilled by it. He reiterated the mnuchin rule multiple times since the hearing. But heres the problem. The numbers do not add up. And im sure weve got press folks in the audience, you can see articles are written to go through table after table after table that show how the mnuchin rule is broken, giving tax relief to the fortunate by hundreds of billions of dollars, paid for by taking Insurance Coverage and tax cuts for healthcare away for working families. Now, im still waiting to see on the Affordable Care act today what happens to those tax changes, but in the earlier bill in 2015, the republicans in the house took away the medicare tax change. Now, the medicare tax change is particularly important because everybody in america pays and medicare tax with every paycheck. You see it. In 2015 the republican said the medicare tax is going to be cut for only one group of people, one group, the most fortunate americans. So the one group that least needs relief when actually get the relief under the medicare tax change. And, of course, we all understand the demographics of medicare, which is why they change was made in the first place. So the mnuchin rule is really on the ropes, okay . Theres more to talk about with the border adjustment and what that could mean for working families and i assume will talk alittle bit about that. Im getting the high side and the back and what i want to do is close with why i continue to get up every day and say i want to be of a hopeful effort to do bipartisan tax reform right. Now, mister min nguyen says the administration was going to do their bill by august 1 and if they want to do it, they can do this on a strictly barred partisan basis and bulldoze their way but a, its not sustainable and its not going to be good for america because first of all, youve got to give everybody in america the chance to get ahead the consumer driving 70 percent of the american economy, youve got to give a fair shake to the working families and those people who are going to drive much of the economic activity. We can do it bipartisan vote. Mitch mcconnells economics lieutenant, when he sat in my Office Almost every week for two years and we produced what is still the first and only bipartisan federal income tax reform bill since 1986. And the reality is, mark mentioned the score. Both sides have valid points if you want to do a bipartisan bill. My side believes the tax code has been captured by powerful special interests. Put medown for subscribing to that point of view. Republicans say the tax code is a mess. It doesnt bring the certainty and predictabity you tdrive decisionmaking in the ivate sector. Put me down for saying i can support that too. Those are sort of the principles that were part of 1986. So i have been a part of writing bipartisan tax reform bill. I would like nothing more than to be part of writing a third one that becomes law. The reason i wanted to come today, and our bills by the way have republicans linking arms to make the tax code more progressive. You can do by bipartisanship but it is not about taking each others bad ideas. Its about taking each others good ideas and in the tax code, its about giving everybody in america, not just the fortunate few, the opportunity to get ahead. So i very much appreciate what you all are going to be doing today. It couldnt, at a better time. I understand we will have questions, softball questions especially welcome but thank you for having me this morning. [applause] sure. Cspan. Org. [inaudible] [laughter] okay, lets get started with the q a portion today. I want to start with softball questions that you asked for. Talk is about successful innovation and drove a lot of investment. You see some areas out there we construct help with infrastructure investment. Guest here we are with infrastructure. First and foremost, weve got to lockdown Public Investment in infrastructure. In otherwords, im a big supporter of a thoughtful , bipartisan effort to get additional money from the private sector in the infrastructure. 1 trillion infrastructure plan in effect and i am very much for that. It speaks to the public side which is what weve always said would be the traditional approach to making sure that we adequately funded the bridges, roads and infrastructure and we work to even broaden the definition out. I do believe if we can lock down the public side of the infrastructure debate, i think we will have a chance to go on and talk about the private side. Senator john hoban and i, governor of north dakota, have worked on a proposal that in effect uses the space to drive a lot of the decisionmaking as it relates to infrastructure and we call these move america bonds and the goal again is to try to have a liquid kind of vehicle on the private sector side, but apropos of marks question, the first thing that has to be done in order to make real, bipartisan headway on infrastructure is weve got to lock down that there will be robust public funding and i am a cosponsor of senator schumers bill. Host thaou. A question that came in from the audience deals with chairman hedgeplans fo corporate integration. Do you see any receptiveness through the committee on corporate immigration proposal . Guest first of all, senator hatch and i have tried to find ways to cooperate on taxes and by the way, the 2015 tax bill, and you can debate what the longterm ramifications are because again, its an indication that parties can find common ground. There are matters republicans were interested in. My caucus said that we wanted to make sure the earned income tax credit, the child benefit and the American Opportunity act for students to go to college was going to make, be made permanent so each five had priorities they thought they were interested in. My view was that they were also good for the long term approach to taxes and we did things like make permanent the research and Development Tax credit so there is an addition to the bills i mentioned with senator greg when he left, senator coates and senator coates joked at one point he said ron, a sure way to get people to leave is to get involved with you on taxes. And 2015 bill is a pretty good model. Because each time had priorities they were interested in that made sense for the longterm kind of reform that we ought to pursue. Mark, i have gotten the latest updates on german hatches corporate integration , but the last i heard, they were still working on the story. But i made it clear we had working groups in the last congress that i will do everything i can to try to find a bipartisan tax reform, i call it principal bipartisanship. Where each side gets principal that helps them promote a possible one. Host heres a piece that came in via email. Is it true that the president can stop any reform, tax reform or healthcare reform to that point of order . Guest the question is going to be do we want to do this right . Which means that you get more than 60 votes and its not an issue. Yes, you want to bulldoze your way, you can use arguably the most partisan team in government. Its called reconciliation. So i could imagine if common sense doesnt prevail, we dont recognize the value of getting bipartisan tax reform, i could see for example the house taking its tax reform proposal and by the way, theres a real question in my mind whether republicans particularly Senate Republicans are going to accept this border adjustment idea, because im watching them on tv. When your colleagues are on tv hammering a republican idea, the publan colleagues are on tv hammering republican idea, that usually doesnt promise encouraging. It usually promises the movie is not going to end well. So yeah, if you want to bulldoze this thing, you can and you can do it with a simple majority using the vehicle known as reconciliation but my view is you want to set that aside until healthcare and taxes. Our adjusted for example to republicans on healthcare. If you all will just adjust reconciliation on healthcare, i think we got a chance to Work Together to make the Affordable Care act stronger. Of the first things we do on the Affordable Care act if youcould get republicans to drop reconciliation , we say weve got to fix the individual Insurance Market. Its only six, seven percent of the market where were having a problem. You can do is make the insurance pool bigger. So you can expect spread the cost and risk right down premiums and the individual Insurance Market and get Healthy People bacin the game. This is probably a longer answer than the question you wanted but there would be an opportunity if republicans drop the partisan schemes on both taxes and health, there would be opportunity to good do good work. I think that the extent of what the policy started. You mentioned, your republican polys being on how unhappy with the border adjustment, is there any interest in going to a broader base lower rate proposal chairman can head . I think that my two bills greg and dan coats and chairman camps proposal, they had some common features. I think mark, correct me if im not getting all the details right, i think the camp proposal picked up on what we had done with senator greg and senator coates standard deduction for workingclass people. That puts money in their pockets so the question will be, if border adjustments text. And as i said, ive been watching republicans, what would they do next in the house. And im hearing speculation well, they go with some kind of corporate cut and wouldnt pay for it. Now, i dont know how they reconcile that. About not increasing the deficit. But i come back again to the question about the relationship with dave cam dave camp did have a variety of problems as senator greg and i and senator coates avoided. They overpromised on cutting individual taxes. And i said when theyre trying to cut individual taxes that great, that dramatically, theyre going to have problems. They did and then they came back and out of the surcharge, where they ended up, where sensor greg and senator coates and i ended up. Lets step up your but thank you. Thanks everybody. 38 years ago on march 19, 1979 the house of representatives broke its debate to the tv cameras for the first time and the Cable Television industry lost cspan to bringcongress into americas homes. Gentlemen,. Mister speaker, on this historic day, the house of representatives opens its proceedings for the first time to televised coverage. I would congratulate you your courage taking this possible. And the committee has worked so hard under the leadership of congressman Charles Rolls to make this a reality. The decision will change this institution mister speaker, just as it changed the executive branch but the good work for a while outweigh the bad. Every member of this body must ask himself first how Many Americans are listening to the debates which are made. When the house becomes comfortable with thaill be allowed to bring their own cameras into this chamber and in the meantime, there is no censorship area every word is available for broadcast coverage and journalists will be able to use and edit as they see fit. The solution for the lack of confidence in government mister speaker, is more open government at all levels. I hope for example that the leadership of the United States senate will see this as a friendly challenge to begin to open theres. The gentlemens time has expired. This medium and are open debate has the potential mister speaker to revitalize representative democracy. And in 1986 the Cable Television industry lost cspan two to carry the supply. All our coverage is webcast archived and searchable for free at cspan. Org. Radio and online are provided as a service of our cable and satellite affiliates across the nation. Day two of the confirmation hearing for Supreme Court nominee neil gore such is underway. Live coverage of the hearing on cspan three. Also want to watch online at cspan. Org or listen on the cspan radio and on thursday, the house will vote on the Healthcare Plan to replace the Affordable Care act. Watch live coverage and vote on cspan starting at 9 am eastern. On washington journal we talked to members of congress about the budget. Our first guest of the morning is representative jody arrington, republic of texas users in the 19th district and is a member of the Budget Committee as well as the agriculture and Veterans Affairs committees, good morning. This morning healthcare will be particularly on the agenda for the republicans whn