Press Releases

On driving economic growth through tax policy reform:

“It's great to be able to talk about things that are going on in the world, and particularly things that are going on as we relate to tax policy and good economic policy, which drives good economic growth. A lot of you probably heard several of these conversations from me a lot over the last several months, as we've gone through this whole process to talk through what we should do, from a tax code policy within the United States and what we want to do moving forward. 

“It's great as we are at this point now where we're wanting to focus on, how do we make sure that we have good policy that makes good economic growth for companies to do business in America and benefit American workers and an American economy. And ultimately raises money for tax revenue to have to fund the government and activities that we do here as well. And that's kind of been my focus since I've been on Ways and Means now six years . . . I came on shortly after the Tax Cuts and Jobs Act (TCJA) in 2017 was passed into law. That was my first term in Congress and so the guiding principles, even back then, we're looking at, how do we make [the] U.S. more competitive in the activities that we do? 

On the history of crafting the Tax Cuts & Jobs Act:

“And I go back and talk a little bit about 2017 and then translate to some degree, how our efforts with TCJA in 2017 tied in with the efforts in the One Big, Beautiful Bill this year, and then how that's also connected to the OECD discussions on Pillar One and Pillar Two. I like to go back and do a little bit of review of history when we talk about TCJA. Because we think back to 2017, the state of the economy at that point in time was, everybody was talking about this new normal, that we should just expect low 1-1.5% economic growth, and that should be the standard that we should expect in the United States.

“The United States had the fourth-highest corporate tax rate in the world, and highest of any developed country. And so it was always putting our industry at a competitive disadvantage as we sort through activities. We had stagnant wage growth for two or three decades in terms of the average taxpayers was in the mid to high 30s was what the income level was for the individuals across the country. We also had inversions. It was the topic of the day. Whether you were a Republican president or a Democrat president, it was a problem that you were trying to address, where, because of our high tax rate, it was profitable for foreign-based businesses to come buy a valuable U.S. entity and convert it into headquarters being overseas and actually partially pay for that through the lower tax savings just by getting out of the U.S. tax burden. 

“And then the other component that doesn't get talked about a lot is the amount of money that was tracked overseas. I mean, literally, it was in the four to four and a half trillion dollars, where subsidiaries of U.S.-based businesses had operations in foreign countries, and because of the existing tax rate, they paid taxes in that country, the territory where they were operating in, but the U.S. tax code said, well, we want to double dip and tax you to bring that money back. So, that money was being left overseas was actually being invested and helping grow the economies over there, which wasn't what you want from a U.S.-based business or entity. 

“And so those were some of the big issues that we wanted to address with TCJA. It kind of drove a lot of our thought process as we went into that, and what we were starting with, just driving the corporate tax rate down down to 21% and even at that, we weren't going to be the lowest tax rate. We didn't want that. By the time you combine the 21% corporate rate with state and local taxes, we're just above the midpoint of OECD countries around the world. But we think that's appropriate. I think we'll still be competitive, just because the innovation with U.S. businesses and the activities that we'll focus on going forward.

On incentivizing investment:

“In addition to the corporate rate, we also want to make sure that we looked at, how do we, how do we incentivize investment, investment in research and development, investment in capital expenditures, investment in in our workers’ workforce, and being able to deduct the interest deductibility used for that investment. And so we structured different provisions around that. Some of those end up being temporary. And so we've had an actually good field experiment the last eight years where we've seen the results of 2017 going forward to now, and selling the economic growth that came out of that. 

On provisions of the OBBB:  

“Now we're at the point of where we were working on with the One Big, Beautiful Bill to extend those provisions that had been temporary, and in the best case scenario, make as many of them as we could, permanent. We also got caught up in a lot of the campaign promises from last election, particularly from the presidential race and some of the new provisions that came in, No Tax on Tips, No Tax on Overtime. 88% of people won't pay tax on their Social Security because of the credits, enhanced senior credits they'll get. Those are new items that we hadn't talked about previously. 

On securing permanent tax provisions to drive investment:

“What we really wanted to do with the One Big, Beautiful Bill is how we make sure that our economy gets back to growth mode and that we continue to have good economic growth and wealth creation for not just businesses, but individuals as well as funding the Treasury. 

“I can go down several instances in the Treasury where we actually have more receipts now than we had on things like royalty tax payments, because we had the incentive for research and development being done in the United States. Companies either brought the research and development back or started it new in the United States, and therefore our royalty income is hundreds of billions of dollars higher than it was. 

“But even what we've seen is, through 2024, actual revenue was increased over what had been projected prior to TCJA. So even the discussion that there was going to be a loss to the Treasury, with the Tax Cuts and Jobs Act, that did not happen through 2024. Now as we look forward with OECD or the One Big, Beautiful Bill, and rolling out those provisions, so many of them, that we're able to get permanent to move forward, [are] going to be so beneficial for us in an operation side. 

On addressing global taxation:

“I talked about a lot of the domestic value for economic growth, and how do we make things happen? Obviously, as part of that, we also need to talk through from an international piece and the issues there. When we were finishing up, again I go back to the little history ,we were finishing up TCJA. 

“Part of the last things done were figuring out, how do we fit in and address the growing concern about the race to the bottom on global taxation? Obviously there's a concern on everybody's part that you don't necessarily want to lose your business to a company or country that is taxing less just because they're taxing less. But what we did was, we implemented within TCJA provisions, like GILTI and BEAT, in order to help address that, to help offset that temptation that somebody would go look and base their operations somewhere to get advantage, just purely for tax purposes. 

On how Digital Services Taxes led to Pillar One discussions:

“At about that same time, there were discussions going on in the world around, both from the same concern as well as a concern of raising revenue in individual countries. So six years ago, seven years ago or so when I got on Ways and Means, one of the first things that I got engaged in was talking about Digital Services Taxes, the DSTs. That was becoming the hot topic at that point in time, because multiple countries were promoting this idea of having a Digital Services Tax and looking at it in a way, basically for revenue. What I became an advocate for, along with a lot of others, was, let's utilize OECD and come up with a consistent approach, instead of having a patchwork quilt of different codes and tax systems across the world. So that was the basis to start the discussion on what ultimately became Pillar One.

On how what led to Pillar Two discussions:

“About the same time that we finished the TCJA provision, then it also turned in that other countries started talking about, ‘How can we address the lower tax rates?’ And making sure that we are actually being fairly competitive in that, which led up into the discussions on Pillar Two. 

“This is kind of starting at the end of the Trump administration, the first Trump administration. As the discussion with Philippines started up, it was more focused on a thought process along the lines of what we put into the Tax Cuts and Jobs Act. In terms of how you look at provisions, like GILTI or BEAT or FDII, and craft something that works for your respective country, whether you're European-based, or Asia or Africa, that actually accomplishes the same goal or a similar goal, to help incentivize companies to operate within your country and not look to run to some country that maybe dangles a particular foreign rate below rate in front of them. 

On the Biden administration’s pivot on Pillar One:

“The problem that happened after we had a change of administration, and the Biden administration was moving into discussion, was the discussion on Pillar One kind of just got put to the wayside. So the Digital Services Taxes weren't being addressed at all from a global OECD standpoint. It was kind of allowed to wither and decline and just pause there. At the same time, there was a completely different focus on the Pillar Two piece to look at, instead of, how do we make tax competitiveness? Look at, how do we do subsidized business and operations? 

“So it really turned into a really bad pivot from that standpoint, in terms of what the impact was going to be around the world. As the material was prepared, a lot of what was done, as drafts were coming out, there really wasn't public awareness of that shift happened, until the final draft came out early two years ago. 

“At that point in time, it really became apparent what had been structured was something that was going to be very discriminatory towards the United States. And the businesses working in the United States, impact them in terms of amount of tax they pay, impact them in terms of amount of processing and how they go through the administrative costs to calculate that. And the net effect on the U.S. Treasury was going to be very detrimental to that, because of the way the U.S. Treasury focused on, or even looked at the tax codes for a long period of time is, how do we come up with, in a lot of cases, non refundable credits? 

“Basically, the incentive is that you should make a decision that results in income and tax burden for you, and then that decision, whether it's investment in R&D or investment in capital expenditure, is what you deduct off of. Whereas a lot of other countries around the world go into more of a subsidized approach. How do they incentivize through the subsidies? Obviously that put U.S. companies at a disadvantage because our approach wasn't being included and theirs was allowed, in terms of calculating what would be a minimum tax. 

On working with Chairman Jason Smith on addressing tax policy inadequacies:

“That's where we really got heavily engaged in this is not the appropriate worldwide process to follow. It throws a lot of decades-old tax treaties on its head. What we needed to do was go back and and let's finalize the Pillar One piece so the DSTs are addressed and and do over the process on UTPRs, that were the central piece of the Pillar Two activity. 

“As we were working through One Big, Beautiful Bill, myself and [U.S. Congressman] Jason Smith, we had a couple of different pieces of legislation, primarily to look at, how do we protect the U.S. tax base if countries were going to go proceed down the route and implement the Pillar Two process? The Chairman's bill was [the] Defending American Jobs and Investments Act, which would have had increased withholding tax under national companies. I had a bill titled The Unfair Tax Prevention Act or UTPA. . . But basically it . . . was going to disallow certain credits and have a similar impact on foreign-based companies operating in the United States, if they came from a country that was using those discriminatory Pillar Two pieces on U.S. business. 

“And I'll say this … I think Chairman Smith will say it as well, we really didn't want a world where we would have to be drafting bills like this to offset bad bills coming from somewhere else. That wasn't the best way to do trade. It wasn't the best way to do tax policy that we should continue down, having this hybrid territorial tax process that has been working and will continue to work into the future. 

“When the Trump administration came back in, a lot of comments and support from President Trump, some [from] Secretary Bessent and a host of a crew in the Treasury staff, agreed with this issue, and we're focusing on this was a problem for America, and what we should do here. 

On Section 899 and reaching the G7 Agreement:

“As the One Big, Beautiful Bill was being written, we crafted just one small section that combined Jason's and my bill together, and all of a sudden, I think it was like two months ago today, that hit the hot button and it became the hot item going into the final discussions on, the infamous Section 899 that became a hot topic out there to talk about. What it did, I think, was highlighted that, there's a lot of concern on the part of Congress that we need to make sure that we have good tax code that works for countries across the world, but also through the negotiations that have happened, primarily with Treasury, but also with engagement with us in Congress, and how we could move forward. 

“The agreement that was brought forth between Treasury and the G7 to actually pull the Section 899 out of the One Big, Beautiful Bill as it was sitting in the Senate, with the expectation that the G7 and OECD countries would would also pull back on their Pillar Two language that they either had already started or they would have started implementing. . . I liked that approach. 

“I do think what we have to do and continue forward is … the trust but verify. We took the first step to pull out the 899. Now we got to continue the process follow through the G7 and OECD countries through that. At same time, [we] need to go and continue to work on the DST issue, because that wasn't resolved, and that wasn't as much a part of the agreement as the Pillar Two piece was. So we've gotta continue that work as we move forward there. 

On finishing the One Big, Beautiful Bill and work to come on the tax code:

“I've kind of gone through a lot of different topics, going back multiple years on different things. And through this process, we're going to continue to keep focusing on, how do we implement and talk about all the things that are in the bill, we just passed the One Big, Beautiful Bill. But also going through and, like I said, trust but verify that all of the follow on countries are following through with their provisions to change the tax code and then also continue to the work to get the DSTs addressed so that there is a global solution for that as well. 

“I'm looking for us getting back into an arena where we actually have more competitive worldwide economies. I think that U.S.-based businesses will be successful. I think a lot of foreign-based businesses will also be successful just because of the way our global economy works. I'm looking forward to taxes not slowing down good, successful economic growth.”