We will discuss ways to improve the business provisions of the u. S. Tax code with an eye toward creating jobs and boosting wages for American Workers and improving our countries overall business climate. This hearing is part of our ongoing effort following years of tax hearings and last weeks hearing on individual reform. To report comprehensive tax reform legislation later this year. Members of both parties recognize the need to reform the way we tax businesses in the United States. As a former president as former president obama noted when discussing his own framework for Business Tax Reform, the Current System, quote, does too little to encourage job creation and investment in the United States while allowing firms to benefit from incentives to locate production and shift profits ov overseas. Ent kwoed. As we know, many elements of a particular businesss tax burden depend on the companys organizational form. For example, C Corporations are taxed at the Corporate Tax rate. According to a recent report by the congressional Budget Office, the top federal statutory tax income rate has been 35 since 1993. And with state taxes added, the United States added statutory rate is the highest in the industrialized world at more than 39. 1 . While some have noted not all corporations pay the full statutory rate, the average effective tax rate of u. S. Corporations is the fourth highest among g20 countries. According to a recent analysis by ernst and young, when you integrate taxes such as those on dividends and capital gains, u. S. Tax rates are the second highest among developed countries. That last one is important given that the United States taxes most corporate earnings that are distributed to shareholders twice. Both at the corporate and the shareholder levels. For the past few years i have been working on a corporate integration proposal that among other things will allow businessed to deduct their dividends paid to help aleleviae the double taxation problem. I view this as a complement to a statutory Corporate Tax rate reduction, not a substitute. We held a few hearings on this topic last year so i wont delve too deeply into the details at this time. For now, ill just say i continue to believe this idea, whether it applies fully or in some limited way, can help address a number of the problems were trying to solve with comprehensive tax reform. I look forward to continuing this conversation as the process moves forward. It is also important to note that while the u. S. Corporate tax rate has remained unchanged for decades, the trend among our foreign competitors has been to lower corporate rates, making american businesses increasingly less competitive. This is not just a republican talking point. This problem is widely acknowledged on both sides of the aisle. Even former president bill clinton has signed into law the rate increase to 35 , recently argued the rate should now be lowered. I agree. The Current Business tax system and the disparity between the u. S. Corporate rate and our foreign competitors corporate rates has created a number of problems and distortions. For example, the Current System slows Economic Growth by impeded capital formation, hindering wage, growth, and job creation. Reducing capacity, and lowering the standard of living in the United States, all of which directly harm families and individuals. The Current System lowers returns on investment, creating a bias against savings and investment. This hinders the creation of wealth for americans across the economic spectrum. Including the middle class. The Current System encourages corporations to finance operations using debt rather than equity. Which increases risks, particularly during times of economic weakness. The Current System gives corporations incentives to shift income production and intangible assets like intellectual property from the u. S. To lower tax foreign jurisdictions. Thereby eroding our tax base. Tax reform, we need to address all of these problems and distortions, and many others as well. In particular, we need to lower the Corporate Tax rate to relieve the burdens the tax imposes on American Workers who according to many economists bear a significant part of the Corporate Tax. They also need to reduce the burden on businesses whose earnings are reported and taxed on individual tax returns. These types of businesses include sole proprietorships, limited liability companies, partnerships and scorporations. We need to fix our International Tax system so american businesses can compete in the global marketplace without facing significant disadvantages simply because theyre headquartered in the United States. Each of these propositions is supported by people in both parties. Of course, when politics enter the equation, the story sounds much different. According to some, all republicans want to do in tax reform is give tax breaks to the super rich. Cushy portfolios for wall street bankers and more handouts for corporations all at the expense of middle class workers and families. Those claims may play well to political bases but they dont align with reality. I noted in our hearing last week, virtually all of our current tax reform ideas are aimed squarely at helping the middle class as well as lowincome families. Our chief goals, particularly in Business Tax Reform, are to increase Economic Growth, create new jobs, wages for employees for both large and Small Businesses, expand opportunities for all americans, and improve standards of living for everyone in the United States. The proof, i suppose, will be in the pudding. As the Committee Works through this process with those goals in mind, i believe we will be able to demonstrate why those in the middle class should feel as though they have a stake in this discussion and how these ideas to reform our Current System will help. Lets keep in mind that the status quo, sluggish Economic Growth, stagnant wages and decreased workforce participation, hasnt exactly been doing the middle class any favors. The case for tax reform should therefore be easy to make. I want to reiterate what i said last week, niamely that this committee will be the starting point for any tax reform legislation that is considered in the senate. We will continue to hear more arguments about secret tax plans written behind closed doors, this committee is going to consider tax reform through regular order. That applies to both the drafting and the reporting of any tax reform bills. As i also said last week, i hope this process is bipartisan. As with individual tax reform, there are many areas of Business Tax Reform where thoughts and interests of both republicans and democrats are valued. There is Fertile Ground for bipartisan agreement on this, and i hope we can take advantage of this historic opportunity together. I know that my Ranking Member widen shares these broad objectives and appreciate that. He has put forward his own tax reform proposals in the past, likely with these same goals in mind. At the end of the day, we should at the very least agree that the current tax system is broken and the current state of our economy should not be accepted as the new normal. I look forward to a robust discussion of these issues here today. As well as some acknowledgments of a bipartisan agreement that exists on these matters. So with that, ill turn to senator widen for his opening remarks. Thank you very much. Im going to have to do a Little Committee hopping in the next hour, so im going to be brief and before i get to the substance of todays hearing, i just need to talk briefly about whats coming down the pipe for this committee, both here and on the floor. And as i told you, mr. Chairman, the remarks im going to make now do not in any way reflect my admiration for you, our friendship, the fact that we just moved ahead on a very important c. H. I. P. Bill, the Childrens Health insurance bill. I want to set out my comments about what happened last night. Last night, the majority announced without consulting the minority that the finance committee is going to hold a hearing on the Cassidy Graham heller Health Care Bill. I want to make clear i believe this is an abomination. Its an abomination of the process. Its an abomination of the substance, and an abomination of the history of this storied committee. First of all, this bill is a prescription for suffering and disastrous consequences for millions of our people. Second, the Budget Office has informed the congress that it will be several weeks at the very least before it can provide real estimates for the bill. So this means the majority is going to charge ahead with a radical, destructive transformation of American Health care with the American People in the dark. This bill is going to be a few roll call votes away from the president s desk, and yet republicans here in the senate do not have answers to the key gut questions, whats going to happen to the premiums paid by the American People . What is going to happen to their coverage . The idea, the proposition that a bill this destructive, this far reaching, can swing through the Senate Finance committee for a single hearing on a monday morning, hit the senate floor a day or two later, makes a mockery of the legislative process that senator mccain so eloquently urged us to return to. Furthermore, this abomination of a process stands in sharp contrast to what we have been able to achieve with respect to Childrens HealthInsurance Program and what a sad commentary on the times that when the committee ought to be celebrating a big victory for Something Like 9 million kids, for millions of families, the Cassidy Graham heller Health Care Bill threatened the health care of millions of families. Second point, reconciliation relies on secrecy, root power, and speed to ram purely partisan bills through the senate, and it is a train wreck to do it on health care. I think we have to note as we start this hearing that leader mcconnell is committed to reconciliation round two on tax reform. When we want on this side of the aisle to have colleagues working together in a bipartisan way and as the chairman noted graciously, i have written two full bipartisan bills, leader mcconnell says were going to have another partisan bill. Another completely partisan bill, with respect to tax reform. And i think that, too, is a prescription for trouble. So the details that leak out of these big six meetings in my view suggest that whats under way is an unprecedented tax give away for the most fortunate and the biggest corporations in the country. The centerpiece could be a 2 trillion loophole dealing with something called pass through status. Pass through status is supposed to be all about Small Businesses. You know, the person whos running a cleaner or running a restaurant. Theres no question those Small Businesses, they fuel local economies, hire the most workers. They sure need a boost in tax reform. But any tax change that allows cheats, tax cheats, to abuse passthrough status by selfdeclaring to avoid paying their fair share and dodge Social Security taxes would be worse than whats on the tax books today. The day the passthrough loophole bill becomes law would be Christmas Morning in america for the tax cheats. It would make a mockery of the trump pledge to, quote, the rich arent going to gain at all with this plan, and thats just one element of what is on offer. Bottom line for me as we move to this crucial discussion, it is time for the congress to take the lies out of the Corporate Tax rate in america. Many of the biggest corporations in the country employ armies of lawyers and accountants who know every single one of the tax tricks. And they use them all to winnow down their tax rates to the low teens, to single digits, even zero. So that congress cannot pair a big corporate rate cut with a plan to enshrine a vast array of loopholes that lets corporations off the hook for paying their fair share. That is, in my view, a sure fire way to heap an even heavier burden on the middle class. So i look forward to discussing these issues. Mr. Chairman, im going to have to be out for a few minutes but i look forward to the discussion and i thank you for the chance to make this statement. Thank you, senator widen. Some of our Committee Members have requested a Committee Hearing for the health care proposal. A hearing will allow members on both sides to delve deeper into the policy and gain a better understanding of what the proposal in. So were going to have a hearing next week on this matter. I believe that members will benefit from a public discussion and examination of these issues. Yet, even though their request has been heard, and a hearing is on schedule, some members are still unsatisfied. Im not sure what else we can do on this matter to address every complaint. For today, our hearing is on the Business Tax Reform, and i hope we can focus these proceedings on that issue. Having said that, i would like to welcome each of our witnesses to our hearing today. We all appreciate your willingness to testify and answer questions today. Hearing each of your perspectives on tax reform will be critical to our process. First, well hear from ms. Scott hodge, the president of the Tax Foundation in washington, d. C. Where he has worked for the past 25 years. Before joining the Tax Foundation, mr. Hodge was director of tax and budget policy and citizens for a sound economy. He also spent ten years at the Heritage Foundation as a fellow analyzing budget and tax policy. Before that, he started his career in chicago where he helped fund the Heartman Institute in 1984. He holds a degree in Political Science from the university of illinois at chicago. Second, we will hear from donald b. Marin, an Institute Fellow and director of Economic Policy initiatives at the urban institute. In 2010 to 2013, the doctor led the urban brookings Tax Policy Center. Prior to joining urban, dr dr. Marron served as a member of the president s council of economic advisers and acting director of a congressional Budget Office. Hes also taught at the Georgetown Public Policy Institute and the university of chicagos graduate school of business. Dr. Marron studied mathematics at Harvard College and received his ph. D. In economics from the Massachusetts Institute of technology. Next, we will hear from troy k. Lewis, the immediate past chair of the Tax Executive Committee of the American Institute of certified accountants in washington, d. C. Mr. Lewis currently teaches at Brigham Young university in provo, utah. Hes in practice as a manager member of lewis and associates cpas, llc, in utah. He obtained his masters and bachelors of science from Brigham Young university. Hes also a certified accountants and a chartered Global Management accountant. Last but not least, well hear from mr. Jeff deboer, the president and ceo of the real estate roundtable where hes served since 1997. He also serves as the chairman of the Real Estate Industry information sharing and Analysis Center as well as chairman of the National Real estate organizations. Mr. Deboer has also served as cochairman of the rand center for terrorism Risk Management policy and was a Founding Member of the Steering Committee for the coalition to insure against terrorism.