The following is the oral testimony of Business Roundtable President John Engler at the Jan. 22 hearing of the Senate Finance Committee, "Jobs and a Health Economy." For the full prepared testimony, click here.
Good morning, Chairman Hatch, Ranking Member Wyden, members of the committee. I’m pleased to testify today on behalf of Business Roundtable.
In 2015, Business Roundtable would like to see a stronger economy creating more jobs. How do we get there?
This week, we released, “Achieving America’s Full Potential: More Work, Greater Investment, Unlimited Opportunity.”
I ask that a copy of our Roundtable report be included with my testimony in today’s official record. I have also provided copies for the committee.
These Roundtable priorities include expanded trade, tax reform, fiscal stability, fixing our broken immigration system, infrastructure investment and a smarter approach to regulation.
Today, my focus will be on trade and tax reform.
EXPANDED TRADE
Business leaders believe strongly in the benefits that trade and high-standard trade agreements bring to the United States.
Trade is also an opportunity for Congress … and the Administration … to demonstrate bipartisan cooperation early in 2015.
Our agenda includes two key recommendations relating to trade.
First, we recommend that Congress and the Administration enact updated Trade Promotion Authority as soon as possible.
Second, we recommend that the Administration, in consultation with Congress, aggressively pursue and secure high-quality and fair agreements, particularly the Trans-Pacific Partnership … the Transatlantic Trade and Investment Partnership … and the Trade in Services Agreement.
Trade Promotion Authority legislation is THE critical tool for achieving high-standard trade agreements that create strong, enforceable rules and will result in U.S. growth and jobs.
A 21st century TPA helps ensure congressional input and oversight of U.S. trade negotiations, and assures our international trading partners that Washington is committed to reaching and enacting strong trade agreements.
Business support crosses all sectors of the economy. In 2013, Business Roundtable created the Trade Benefits America coalition – a broad-based group of more than 230 U.S. business and agricultural associations and companies educating on the benefits of trade and strongly backing TPA.
Our coalition members are eager to work with this committee to get TPA passed as soon as possible.
PRO-GROWTH TAX REFORM
On the next topic, I think everyone agrees: The U.S. tax code is broken and desperately needs to be fixed.
Mr. Chairman, the formation of the five working groups on the U.S. tax code represents an excellent start to the kind of bipartisan effort that can make a modern, more globally competitive tax system a reality.
Just yesterday, Secretary of the Treasury Jack Lew reiterated the Administration’s desire to work on business tax reform. We urge the Administration and Congress to enact tax reform this year!
Tax reform should be designed improve the competitiveness of all businesses – that is, non-corporate entities and corporations alike.
Business Roundtable’s key tax reform recommendations for corporations are two:
First, set the corporate tax rate at a competitive 25 percent.
Second, adopt a modern international tax system that ends the double taxation of U.S. corporations’ foreign earnings, thus eliminating a policy that has resulted in more than $2 trillion in earnings trapped offshore.
Regardless of the business structure, reform will require hard choices. In the case of corporations, repeal of the so-called “tax expenditures” would offset the revenue loss of the corporate rate reduction –creating a broader, flatter tax code.
America’s business leaders have consistently maintained that tax reform will boost wages, growth and investment.
In 2014, Rice University professors analyzed then-Chairman Camp’s tax reform proposals. Their study showed an increase in U.S. annual GDP of 2.2 percent after 10 years and a boost in after-tax wages for American workers of 3.8 percent after 10 years.
We look forward to working with you to seek even stronger growth results.
This additional growth can help address our fiscal challenges, as well, as we turn to such critical issues as our nation’s long-term debt and entitlement reform.
CBO says that each one-tenth percentage point sustained increase in the growth rate of GDP would reduce the deficit by $300 billion over a decade – a full percent point annually woud reduce the budget deficit by $3.1 trillion over a decade. A nice, nice contribution.
Mr. Chairman, Ranking Member Wyden, members of the Committee: Thank you again for the opportunity to address the many policies this nation needs for a more healthy economy and for more jobs -- for America to achieve its full potential.
We look forward to working closely with you on these goals.