Sen. Cruz Delivers Senate Floor Speech in Support of Tax Reform for Working Men and Women

WASHINGTON, D.C. – U.S. Sen. Ted Cruz (R-Texas) today delivered remarks on the Senate floor, where he outlined his priorities for fundamental tax reform, including genuine tax cuts for working men and women and employers that will help to jumpstart economic growth and create millions of new, good-paying jobs.

Watch Sen. Cruz’s floor speech in its entirety here. The full text of his remarks is below:

“Madam President, I rise today at a time of extraordinary opportunity. The American people have entrusted us with something that historically is quite rare: a Republican president, Republican control of every executive agency, and Republican majorities in both houses of Congress.

“Now, it is incumbent on us to stand up and lead, to deliver on the promises we made to do what we told the American people we would do. We have before us right now an opportunity for historic tax cuts. 

“Just last week, this body voted out a budget resolution that is the vehicle for adopting tax cuts and I urge every member of this body to come together in support of a strong, bold tax plan that cuts taxes on every working man and woman that brings back jobs and economic growth.

"You know, growth is really fundamental to every other challenge we have in this country. If you look historically, since World War II our economy has grown on average about 3.3 percent a year. And yet from 2008 to today, we've grown only 1.2 percent a year, about a third of the historic rate of growth. If we don't turn that around, none of our other problems are solvable.

“If you care about the national debt, if you care about the deficit, if you care about rebuilding and strengthening our military, if you care about strengthening and improving Social Security and Medicare so that they are there for the next generations, you've got to have growth. With economic growth, every one of those is possible. Without growth, if we stay mired in the stagnant Obama 1 and 2 percent GDP growth, none of those problems are solvable. Growth is foundational.

“So, Madam President, I'd like to lay out three principles and then seven key elements that I think should guide this body in tax reform. 

“Number one is growth. When we are adopting tax cuts, we should focus directly on jobs and economic growth. Focus on the reforms that produce jobs, that expand economic growth, that grow our economy, that create more opportunity, that raise wages. Working men and women in this country are hurting. We need wages going up. We need more jobs. We need young people coming out of school with two, three, four, five job opportunities. That's what tax cuts are all about. Number one we start with growth.

“I'll point out we can do this. From 2008 to 2012, the economy grew 0.9 percent a year, less than 1 percent a year on average. If you look back in history to the previous four-year period where growth average less than 1 percent a year, it was 1978 to 1982. It was coming out of the Jimmy Carter administration. It was the same failed economic policies, high tax, high regulation, high spending, high debt.

“In 1981, Ronald Reagan came into the White House. The Reagan Presidency focused front and center on tax cuts, major tax cuts in 1981 and then following it up in 1986 with major tax reform. And what happened? When Reagan came in 1981 with across-the-board tax cut, tax cuts for everybody, Democrats screamed. The media screamed. And yet the economy took off.

“Madam President, in 1984, fourth year of the Reagan Presidency, GDP growth, it wasn't 3 percent, it wasn't 4 percent, it wasn't 5 percent, it wasn't even 6 percent, it was 7.2 percent in 1984. 7.2 percent. Those are numbers you hear in the developing world. Those are numbers you hear in China, in India. All of our learned economists who are so world weary, all of our media reporters who are so world weary tell us, “No, no, no, no, that kind of growth is not possible in America anymore. Accept the new normal of 1 percent and 2 percent of stagnancy, of young people buried in student loans, of people hurting. Accept that as the new normal. That is nonsense.’ If we have a -- if we want to see Reagan-style growth, we need a Reagan-style tax cut, an unapologetic, unabashed tax cut that focuses on jobs.

“Second big principle, simplicity. You know there is an old rule, KISS, keep it simple, stupid. That is particularly powerful when it comes to tax reform. Bold simplicity has enormous power. “And in particular, allowing every American to fill out your taxes on a postcard, I believe that should be an integral element of what we pass. It's what I have been pressing for, for many years, and what I will continue to urge my colleagues here in the Senate and in the House to do. Simplify the tax code, so that we don't spend millions and millions of hours and paperwork wasted on compliance. Make it a postcard. Make it simple.

“And then the third objective is fairness. We want a tax system that's fair, that isn't arbitrary, that isn't Washington picking winners and losers - deciding okay, this industry we like so you can do okay, this industry we don't like so you're going to hurt. ... We need to cut everybody's taxes.

“Last week, I debated Bernie Sanders on CNN on tax reform and Bernie, to his credit, was very candid. He said he wanted to raise your taxes. If you're a taxpayer, your taxes are going up under Bernie and the Democrats' vision. My vision is every bit as simple on the other side. If you're a taxpayer, I want to cut your taxes. And that's what we need to do is cut taxes fairly across the board for every American, to reduce the burdens from Washington and to create jobs and economic opportunity.

“You know, Madam President, I will note in that debate with Bernie, there was one exchange that I thought was particularly notable. Bernie, as you know, when he ran in Vermont did not run as a Democrat. Rather, he ran telling the voters he was a Socialist. And I asked a simple question. What is the difference between a Socialist and a Democrat on taxes? And he sat there for several seconds in silence and said, ‘I don't know the answer to that.’ And my response was, ‘Neither do I.’ One side of this chamber wants to raise your taxes if you're a taxpayer. The other side of this chamber wants to cut your taxes if you're a taxpayer. That's a simple choice for the American people.

“What are the elements that should reflect those principles? Seven critical elements. 

“Number one, I believe we should create a simple, low, flat rate. Currently there are seven individual rates with the top rate nearly 40 percent. Ideally, what I believe we should have is one simple low, flat tax. When I was campaigning for president, I campaigned on a simple flat tax of 10 percent for every individual, every family in this country, 16 percent as a business flat tax and abolish every other federal tax. Abolish the corporate income tax. Abolish the death tax. Abolish the alternative minimum tax. Abolish the payroll tax. Everyone pays a simple flat 10 percent for individuals, 16 percent for businesses. Simplicity has power.

“Now, Madam President, it may be the case that we don't have the votes to go to a simple flat tax today. If that is where we are, if we don't have the votes to do it today, then the closer we get to that, the better. If we can't get to a simple flat tax, then going from seven brackets to three, that's an improvement. You know what, going from three to two is even better and going from two to one would be even better than that. We need to press consistently for a low, simple flat rate that is fair for everybody.

“Second element, and we talked about this just a minute ago, was filing your taxes on a postcard. Let me tell you, the most wonderful aspect of that is simplicity. It's not the millions of hours and billions of dollars that are saved. The best aspect of filing your taxes on a postcard is actually the physical dimensions of the postcard. It means that Congress can't add a bunch of new things, even if you tried to put it in four-point font. Eventually you run out of space on the postcard. The reason a postcard is so important, is it imposes a discipline on the federal government such that you can't carve out a special loophole for every favored or disfavored group because it’s simple, and flat, and fair for everybody.

“Number three, allow immediate expensing. Now what does expensing mean? It means if a business makes a capital expenditure, right now they typically have to amortize [capitalize] it over a number of years. Instead, what we should do is allow full and immediate expensing. So, if a farmer in your home state of Iowa buys a new tractor, that farmer should be able to expense it immediately that year. If a steel factory buys new equipment and hires new workers to operate that equipment, that steel factory should be able to expense that new equipment immediately. If a diner buys new kitchen equipment and hires new cooks, and waiters, and waitresses, the owner of that small business should be able to expense that capital expenditure. And why is that? The reason is because of the first principle I started with: growth.

“If you care about jobs and economic growth, expensing is a powerful, powerful engine for jobs and economic growth. It creates millions of new jobs because that capital has to be spent in the United States, has to be spent here. That tractor is in the United States. That steel equipment is it in the United States. That diner with the cooking equipment is in the United States. Which means those jobs are in the United States. And I would note, by the way, that the people that are particularly benefited from immediate expensing are the working men and women who work in this country. The men and women with callouses on their hands. The men and women that frankly, gave Donald Trump the victory in November of 2016. Are the union workers who, sadly the Democratic Party, has abandoned.

“There was a time when the Democratic Party styled themselves as the party of the working man and woman. That time has long since forgotten. The Democratic Party now listens to California environmentalist billionaires, and ignores the plight of steelworkers, of oilfield workers, of farmers, of ranchers, of taxicab drivers, of truck drivers, of waiters and waitresses, of the men and women working hard for their families. That's who the Republican Party should be fighting for, the working men and women of this country. Immediate expensing impacts the working men and women, particularly in heavy manufacturing.

“The fourth element is a lower corporate rate. We're seeing, and we've seen over the last eight years, companies leaving America. Leaving America and moving had their headquarters, moving their legal domicile to other countries. Why is that? Because the United States has the highest corporate tax rate of any developed country in the world. We’ve created a tax environment that tells American businesses, ‘If you simply get the heck out of Dodge, if you simply move somewhere other than America, immediately your profitability will jump,’ because our corporate tax rate is higher, and in some instances more than twice as high, as our competitors.

“You look at Ireland, Ireland used to have high corporate taxes, they cut it and cut it again and they’re seeing businesses flood into Ireland because of the low corporate tax rate and they bring with them jobs.

“Our focus should be jobs. If we cut the corporate rate so it is low, so that it is at least as low as our competitors, and ideally even lower, we will create an environment where more businesses want to do business in America, where there are more jobs. And I'm reminded of during the presidential campaign season of Hillary Clinton saying, ‘Don't let anybody tell you that corporations or businesses create jobs.’ Look even in the world of politics that was a particularly asinine statement.  

“Last I checked, you get a job from going to work for a business, unless you start your own business. You either start your own business or you go work for another business, that's who gives you jobs. We need to create an environment - you know, in recent years we talked about corporate inversions. Companies fleeing America, and our friends on the Democrat on the other side of the aisle, have all these ideas to punish the companies that flee America. Their approach is, ‘We are going to tax you so high you can’t do business in this country, and then when you try to survive, we are going to punish you on top of that and put fines and penalties.’ It is actually reminiscent of their approach on Obamacare where they fine people who can't afford insurance after driving premiums through the roof.

“A much better idea, let's cut our corporate tax rate, let's create a tax and regulatory environment in America so that businesses want to be here and create jobs. And it is my hope that three, five, ten years from now, that other countries, that European countries, that Asian countries are complaining about corporate inversions, because their companies are fleeing their countries and coming to America because there's no place on earth better to do business than America, because we will have honored our commitment on tax reform and cut taxes and created an environment where businesses can thrive. 

“Number five, encourage repatriation. Right now federal tax law subjects American businesses to punitive double taxation at the highest rates of the developed world if they bring capital back from overseas here. U.S. companies have roughly $2.7 trillion in capital overseas, and our tax system inexplicably incentivized them to keep the money overseas. Which means, what do they do with the money overseas? It means they build factories in China, in Mexico, in India, and countries that aren’t America. And they hire people overseas. Why? Because if they bring the capital back here and hire Americans, our tax system punishes them. That doesn’t make any sense.

“I want to see that $2.7 trillion coming back to America. I want to see that money back in this country. I want to see new factories, I want to see new stores, I want to see new businesses, I want to see new jobs. So we need to encourage repatriation and not put a punitive tax on the money coming back. You want to talk about patriotism. There is a reason it's called repatriation. It is patriotic to use that money to hire Americans. Now, our Democratic friends just want to yell, scream, and insult them. That's not the right answer. If you punish companies for bringing money back to America, they are going to respond rationally by not doing that. So, let's change the tax system so we don't punish them for bringing money back to America and jobs back to America.

“Sixth element, end the death tax. Madam President, the death tax is one of the most unfair aspects of the federal tax system. Now, the death tax also happens to be the very favorite tax our friends on the Democratic side of the aisle love to demagogue. I have heard over past weeks, attack, after attack, after attack on the death tax that it’s about the super rich. Here's a secret that the Democrats will never tell you. The super rich don't pay the death tax. By and large they manage to avoid the tax with remarkable success rates. They hire armies of accountants and lawyers. George Soros. Do you think that George Soros is paying the death tax? Hold your breath, let me know how that works out. The super rich, it doesn’t impact them. The death tax generates actually very little revenue for the federal government.

“Who gets hit by the death tax? It's the farmers, it's the ranchers, it's the small business owners. You know, in the debate last week with Bernie Sanders, he said, ‘This doesn't affect farmers at all.’ You know, you and I have both spoken with an awful lot of farmers in Iowa, in Texas. I've heard farmer, after farmer, after farmer lament the death tax because what happens when the patriarch, the farmer passes away and passes the farm on to the next generation, over and over again the next generation is forced to sell the farm just to pay Uncle Sam. They already paid taxes once. They paid the taxes when they earned their money. And the death tax says, ‘That for having the temerity to die, we're going to tax you again at a punitive rate.’ Death should not be a taxable event. That's not fair. It shouldn't be the case that when you die the two people you get to see are the undertaker and the tax man. And we see farms that are sold, that are broken up. We see ranches that are sold, that are broken up. We see small businesses that are sold, that are broken up because the next generation that wants to run the small business wants to keep those jobs, suddenly has a massive federal tax bill. They don't have the fancy lawyers and accountants that, like the super rich, lets them avoid the death tax, so they get hit full force with the death tax.

“If you care about jobs and economic growth, why do you want a small business owner forced to sell the factory just to pay the tax bill, which means the employees all get laid off, they lose their jobs. It’s much better to have those small businesses growing, have those farmers prospering, have those ranchers prospering.

“And then the final element is, we need to end the alternative minimum tax. The AMT is a totally second set of taxation. Every year it is growing the number of people hit by it and it just adds complexity to the code.

“We should focus on growth, simplicity, and fairness. If we do that, if we focus on bringing back jobs, we can have the ability to have a tremendous impact on our country.

“I want to finally make a plea to the members of our conference, to the Republicans. We may get some Democrats to support us on tax reform. It's possible. We may get one or two. Sadly we're in a different world than we used to be.

“In 1981 and 1986 Democrats actually used to be willing to work with Republicans on tax cuts. Tip O'Neill a Democrat was Speaker of the House when Reagan passed massive tax cuts. Bill Bradley in this body, a liberal New Jersey Democrat helped lead the effort for tax reform. There are no Tip O'Neills and Bill Bradleys left. There is not a single Democrat leading the fight for tax reform. Not a one. You may get one or two Democrats at the end of the day who cast a vote after everything is done, because they are afraid of the electoral consequences in November. 

“But I'll make a prediction right now, that if we don't have 50 votes on this side of the aisle, not a single Democrat will provide the 50th vote. They might be the 52nd or the 53rd vote but we ain’t getting vote number 50 from that side of the aisle. Which means for tax reform to happen, our conference has to get our act together. We have 52 Republicans. We’ve got to get 50 on the same page.

“Listen, we're at a time where we're seeing personality battles, we're seeing nastiness. This is a strange time in politics. Any three Republicans can torpedo tax reform, so I’m making a plea to all 52. Don't be selfish and petulant, don't put personal animosities above the good of the country.

“We were elected by the voters to do a job. Let's do the job. Let's honor the promises we made. Let's cut taxes, bring back jobs, bring back economic growth, and demonstrate to the voters there's a reason they elected Republican majorities. If we don't, if we can't get our act together, then I fear the consequences are catastrophic both as a policy matter and a political matter.

“And so I urge my colleagues, let's do what we said we would do, let's cut taxes, let's bring back jobs. 

“Madam President, I yield the floor.”

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