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Thursday, October 5, 2017

Isakson: Let’s Talk About How Tax Reform Benefits Americans

Delivers floor remarks on benefits of unified tax reform framework

WASHINGTON – U.S. Senator Johnny Isakson, R-Ga., delivered remarks on the Senate floor yesterday to outline a few of the reasons he supports the tax reform efforts that are currently underway in Congress.

Isakson is a businessman of more than 40 years and is a member of the Senate Committee on Finance. The committee is responsible for drafting tax legislation in the Senate based on the unified tax reform framework released on Sept. 27, 2017, by leaders in the U.S. Senate, the U.S. House of Representatives and the Trump administration.

“As we enter this debate, let’s talk about what benefits the American people, what incentivizes innovation and competition, what puts more money in the pockets of the middle-class of America today, but [also] creates more money in the middle class in the future,” Isakson remarked.

Isakson went on to argue that the government should be offering a “fair place to compete” because Americans are “proud of the chance to have an opportunity for an honest living and to be a part of a country that continues to grow and have prosperity for the future.”

Isakson highlighted four areas where tax reform will be beneficial, noting that the framework is open-ended, allowing for debate and modifications to achieve the best possible outcome for Americans.

First, the framework helps all Americans, including the middle class. “If you look at the proposal today for the middle class, there are lower rates, fewer [tax] brackets and more opportunity to gain wealth in the future through work, investment and earnings,” said Isakson. 

Isakson also discussed how the framework encourages job creation. “We need a tax code that incentivizes the creation of jobs,” he said. Isakson pointed to a provision focusing on the tax rate paid by many small businesses, often called a pass-through rate, as “a job-creating proposal that works.”

If the pass-through rate is lowered, Isakson stated, “we’ll have a good environment in which companies can form investments, form new companies, make investments in those companies, build opportunity and in turn, build jobs. It motivates Americans to create more jobs.”

He also discussed how an updated international tax system, called a territorial tax system, would level the playing field for American businesses and keep jobs and tax revenue in the United States.

“We want to improve every competitive opportunity we have, and the current code suppresses competitiveness,” Isakson stated. “This proposal takes us to a territorial tax system, which is the way most of the world competes. It’s time we tax money where it’s earned, bring the money back to [the United States] hire people, invest, build new products, take them overseas and sell them.”

“When your tax code causes companies to think [about moving headquarters overseas],” Isakson continued, “you’re predicting a future for the country that’s not as bright, as rich, or as important as it should be.” 

Isakson also discussed doing away permanently with the estate tax, often referred to as the death tax, to end this punishing tax on family farms, ranches and small businesses.

“I grew up working on a farm in Fitzgerald, Ga., and Ocilla, Ga., and I love farmers,” said Isakson. “One of the proposals is to do away with the estate tax that still is with us. I don’t call being dead in order to collect a tax benefit a good idea. I don’t think that’s a benefit at all. After your death, you’d be telling the government, you get this half, my children, my wife, my family, they get this half. A generation later, when you go back to the well, those kids who inherited the business have to go back and pay taxes, and another quarter of it’s gone. So, in two generations, you took an asset that was worth a lot, and reduced it to 25 percent of what it was worth. That’s backwards thinking.”

“What we should do is let that company or farm remain in a tax-paying mode,” Isakson continued. “By abolishing the estate tax, you’ll actually put more money over time in the U.S. Treasury than you ever will by taxing it one time at 50 percent.”

Isakson’s full remarks are available here.