Mr. President, I rise today to speak about the important legislation we are now considering.
Earlier this week I explained some of the reasons the Senate needs to consider tax reform legislation and gave a general overview of the bill. Today I want to talk about some of the specific provisions of the bill.
First, I want to talk about the relief this bill provides to hardworking Americans. The Tax Cuts and Jobs Act reduces tax rates for individuals, almost doubles the standard deduction, and doubles the child tax credit. This will allow families to keep more of the money they earn in their pockets. The independent Tax Foundation estimates that this will amount to about $2,500 more in after-tax income for a middle income family in Wyoming.
This bill also will provide relief to small, family-owned businesses that currently employ the majority of the private sector in Wyoming. The bill cuts taxes for these businesses while enhancing deductions that are important to them, like the section 179 deduction that promotes business investment. The Tax Foundation believes changes like this will add more than 1,700 full time jobs in my home state.
While these individual tax code provisions are important to so many Wyomingites and small businesses in my home state, I am also especially proud of the international tax provisions in this bill, which I worked on with Senator Portman and Chairman Hatch.
Right now our tax rules are written so that many businesses could be better off if they are headquartered outside of the United States! Those rules, which were written in the 1960s, are completely outdated. Many of the United States’ major trading partners, including Canada, Japan, and the UK, have moved to what are called “territorial” tax systems. Those systems tax the income generated within their borders and exempt foreign earnings from tax.
The United States, on the other hand, taxes the worldwide income of U.S. companies and provides deferral of U.S. tax until the foreign earnings are brought home. Deferring the tax incentivizes companies to leave their money abroad and invest it there. That’s certainly not a recipe for U.S. growth and U.S. job creation.
The dominance of U.S.-headquartered companies in the global marketplace is waning. In 2000, 36 percent of the Fortune Global 500 companies were headquartered in the United States. In 2009, that number dropped to 28 percent. In 2017, we are down to 26 percent. Clearly, America is losing ground, and our international tax rules are part of the problem.
I’ve been working to change that since the 112th Congress, when I introduced the United States Job Creation and International Tax Reform Act. My goal then was to incentivize American companies to create jobs in the United States while leveling the playing field for U.S. companies in the global marketplace. I believe the Tax Cuts and Jobs Act achieves that goal.
This bill would reform and modernize the rules for taxing the global operations of American companies. These reforms, along with reducing our corporate tax rate, would help make America a more attractive location to base a business that serves customers around the world.
With these provisions in law, families would hear fewer stories about how U.S. companies are moving their profits to tax haven countries and avoiding U.S. tax on those earnings. Families would hear fewer stories about how U.S. multinational companies set up post office boxes in the Cayman Islands and Switzerland without an employee or officer of the company anywhere in sight and attribute a significant portion of their foreign earnings to these jurisdictions. Instead, families would hear more stories about how U.S. companies are generating the ideas and inventions of tomorrow right here in America.
The international tax rules are not easy or simple, and a lot of work went into these provisions. I want to again thank Senator Portman and Chairman Hatch for their work with me in this area. I look forward to continuing to work with them and the rest of my colleagues to pass this bill that our country desperately needs.
Thank you, Mr. President, I yield the floor.