Hours. The committee will come to order. Good morning and thank you all for joining us. Today our committees focus on the top priority for the American People, progrowth tax reform that will create jobs, increase paychecks and strengthen our nations economy. America now has one of the most costly, unfair and uncompetitive tax systems in the world. The need for progrowth tax reform is urgent. Todays high tax rates on american businesses drive good paying jobs overseas and makes it much more difficult for our job traders and our workers to succeed here at home. Americas burdensome International Tax system destroys u. S. Competitiveness and discourages investment in our local communities. Scores of loopholes, favored treatment to Washington Special interests while millions of harvard working americans havent seen a real pay raise in years. Heres the good news President Trump is leading the charge for bold tax reform that will unleash the jobs and paychecks nationwide and hes calling for the house and the senate to put forward our best ideas. Our committee is ready to answer that call. For the past several years weve held roughly 40 full committee and subCommittee Hearings on all aspect of tax reform. All of our members know that tax reform is an economic impairity. Now is the time to go bold. Now is the time to deliver real results to the American People. We welcome all Serious Solutions that would help achieve that goal. While theres no perfect way to tax, there of there are Proven Solutions to help americans grow their lives, especially the middle class. We have the highest Corporate Tax rate in the developed world at 35 . For Small Businesses the rates can be as high as 44. 6 . To unclaesh job creation, increase middle class paychecks, we know these rates have to come down. Americans must take more so they can invest more in their their business and futures. We also know that expenses is encredibly good for jobs, our paychecks as a whole. This provision loan allowing businesses of all sizes to immediately write off their Business Investment, will grow the economy over 5 over the next decade, create 1 million fulltime job and raise wages and paychecks significantly. Finally, the numbers show us that businesses of all size are recently the business round theyll prompt companies to increase Business Investment and three out of four said they would increase hiring. This made clear that tax reform will create jobs, create paychecks and grow our dmi 90 of the o said that laying tax reform by closing slower growth, dloer high it would force the americans to continue to work with a tax code that is against them, not for them. Roger, who is a friend and his wife, who are so deeply involved in the community said as a Small Business owner, im scared to death each year on how im going to have to pay into the government. That uncertainty is devastating, he says. Its kind of like trying to operate your business with one hand beified behind why are back. Sometimes you feel like both hands are tied behind your back. All Small Businesses know that feeling. Well hear from real live Business Leaders about exactly what is needed to get jobs, paychecks and the economy. 80,000 middle class workers. Their expertise will help us understand how different pro owes als will create weve received thousands of comments fr that we take very seriously. We look forward to the expert guidance our experts will bring to you today. Again, there is no perfect way to tax but there are proven ways to grow our economy. With todays hearing, we will take a critical step toward putting these idea into action. Ill now recognize Ranking Member neil for his portion. Thank you. We all agree the tax code is broken. Its far too complicated and in in need of repair. We all agree any revisions should promote Economic Growth and create jobs for working families. However, we should reject ideology and Work Together to reform our tax system for the 24th cent. According to a recent poou study, its shifted middle to upper income household. 49 went to the upper income household in 2014, up from 29 in 1970. And more fiddle income pous holtz was 47 in. Well, is now concentrated at the top and i assume theres broad agreement on that issue. Not to miss the point, greater concentrated wealth at the top is a reality as we proceed to this discussion. Income stagnation is a real challenge and one that needs to be addressed in tax reform. This is why working families sen they were concerned about unearn financial stability. Tax reform should be about moving the dial to help middle class families prosper. And helping family with day day kouss like housing i urs flb and naenchs our focus should be pb. That is not the case in too many houses across the country today. Middle class is actually the true winner in any tax reform proposal. Americans believe massive tax cuts will grow the economy. The American Family knows that tax reform that provides middle class tax relief and askS Corporations and the wealthiest americans to pay their share is what will grow our economy. We will oppose any tax plan that simply helps the rich get richer and does nothing for those who really need our help. All of us should oppose any tax reform that results in a greater burden on the middle class. I hope the secretary will move back to the test set out by senator mnuchin for tax reform. Furthermore, tax reform make no mistake, tax cuts do not pay for themselves and anything to the contrary is a nonstarter. I would argue the importance of considering the Macro Economic effects of other policy changes, including an acknowledgement that robust changes would have a significant effect in our economy. I think we should use the revenue for the deemed repatriation and for other investment purposes. In conclusion we have a unique opportunity to sit down and work to the on tax reform. After all, we all agree that the Current System is inefficient and under pro dubt productiv. Only if we do make the effort to assist the middle class. We look forward to hearing from our witnesses as they join us today and look forward to a continued and productive conversation. Thank you, mr. Neil. John stevens is Senior ExecutiveVice President of at t inc. , zach model is the chief alignment officer at atlas tool works, david farmer is ceo of Emerson Electric, Douglas Peterson is president of snp global and Steve Chatman is the president of will advisers llc. We reserve five minutes to deliver your oral remarks. Mr. Stevens, well begin with you. Thank you for being here. Thank you, chairman brady and members of the committee. I appreciate the opportunity to be in front of you today. John stephens, chief finance officer of at t and i sincerely appreciate the opportunity to discuss the importance of comprehensive Corporate Tax reform with you today. At t is a company with 140year heritage of research and innovation that includes eight nobel prizes and more than 15,000 patents and pending patents worldwide. We employ more than 200,000 people here in the united sta s states, and over the past five years, weve invested more in the economy than any other country, at 135 billion. One of the biggest issues facing this country is how to unleash Economic Growth, which has underperformed for the last decade . We can and should do better. The key driver of u. S. Economic growth is private Sector Investment. When investment increases, so does Economic Activity and making more money. However, private Sector Investment in the u. S. Measured as a percentage of gdp is at ielts lowest level in generations. It is not surprising that the u. S. Economy has been mired in sluggish growth for nearly a decade. If were serious about robust growth, then we must get serious about jump starting private Sector Investment and the best way to do that is to fix our broken last kent the most effective catalyst available for Public Policy makers to increase Capital Investment, create jobs andin ps also narks we can respond to Foreign Countries that have implemented modern technology to aggressively compete for our job and our investment. We have a once in a Generation Opportunity to comprehensively update the code for the 1st century and put the u. S. Back on top. First, we need to reduce the top Corporate Tax rate. This is the quickes, most straight forward way to scum start investment in our country. It will bring our tax system in loon with other developed countries by reducing the rate, simple economics will drive companies to invest more in america, the tax founds estimated this. It removes the negative effects of taxation on investment. And we know it works. This committee allowed accelerated depreesh yags that positively affected our Investment Decisions in those years. Plane and simple, we at at t invooess upon prn it would do even more and more investment directionly means more jobs. Sflrnls any plan being considered should be judged in totality, not just a sijle provision. For example, one area i know the community has looked at is eliminating interest expense deductibility. Viewed in eye lags, that would be very problematic for me but i understand it necessary as part of a broader communication. If they interthis would not only give companies appropriate time to adjust their Capital Structures to the new system but also allow them to immediately increase their investment in response to a lower overall tax rate. Mr. Stevens, thank you for your testimony. Mr. Chairman and numg f id here today representing not only my own company but also the 750 manufacturers who are members of the technology and factory association, illinois in snarnl most are like mine, small to media sized whether through innovation, modernization and cost control, we now produce more product than we did 20 years ago. Plus were well positioned to take on the challenges of reshoring and were proud to help manufacture the weather of america. However, in order to kin our success and im here today to testify in support of who are workto come sfb. The community for trade competitiveness through tax reform and the frrnlt sfrchl to throw at theinternationally kpchl andsffrmt and this also compares the be be prks snrks knorrly every one of our trading colors current nrnl snrm snrmt they act as terror and subsidy repli into the e. They. They raised the nchlgs n but any dri nfrm and used the protest to produce or snechlgt they go hand in and. Iin nichl. One that encourages domestic fn we dod n and we dont need to risk having a trade stwrrmt sffrmt sfrnlt. Its the importance. Were often family owned, we usually own our own real estate and weep do not have a significant staff of tax experts. We work hard to ecompetitive, work hard and pay our fair share. Small businesses see sof the worst tax resources under the globe. Thats why i believe we must reduce the overall rate, offer a reduction in payroll taxes and fund these reduction through bats. It also important to simply ties the subcode. Tripe, sfrrks snrnl they have three different tax structures. You so you remember companies lick mine and tens and thoughs throughout the United States were to the look for a, in if are all rear going for from congress to a move toward a n this oo for flrmt sfrnlts and frchlt thank you for the opportunity to provide this input. I look forward to your if hes. Thank you. Mr. Farr, youre recognized and welcome. Thank you very much. Good morning, chairman brady, Ranking Member kneel and dwibd members of the committee. Thank you for this opportunity to stay with you. Im david chairman and ero of emerson and prchl well have over 80 thousand and operations in more than 1350 questions. The nationals largest industrial pro sp sfrchgs . Because as a matter of fact hooves snchl snchl. And a snchgts manufactures are in the u. S. Have innovated but the snrks with a combined sfruchlgt and this is a competitive problem. And top rates as manufactures organized, the top rarity frnl paid 1. 8 billion ally in taxes worldwide. More than half of that was paid to the United States. A marginal tax rate over 37 , emerson pays real tax cashes here in the United States. The key objective shared by emerson is a top federal telecommunication rate sfrashl, if lowering rates will make us more competitive and promote job creation and strong are Economic Growth. Outdated and cumbersome car rools represents another major problem. Emersons business is glo globe frifrm as a u. S. Company headquartered in st. Louis, missouri, emerson typically pays more in taxes on worldwide earnings than our foreign competitors. This is another issue. Most Countries Companies pay little or no tax when they bring their foreign earnings back home. The United States, on the other hand, has a world wide system meaning Global Companies where they do business, they pay taxes as well as in the United States when we bring the earnings back home. This out of tax burden is a significant disadvantage when u. S. Companies are competing for global business. This will increase u. S. Jobs, exports and allow for a flow of capital back the United States for investment right here in america, a tax plan must encourage Capital Investment by allowing accelerated appreciation of newly invested assets, one of the most important being the full expensing the first year. Opinionsi expensing lowers the cost of capital and economic adjustment and job growth. I strongly support a robust r d incentive. U. S. Manufacturing would want the United States to be the best place to compete in the manufacturing world. Permanent tax reform that reduces the Corporate Tax rate to 15 , provides lower tax rates lieu pas for passthrough entities will ensure we achieve this goal. And improve our countrys competitiveness. We need a fiercely competitive tax system and we need it now. Were committed to working with you to advance this muchneeded tax reform as soon as possible. Mr. Chairman and committee members, thank you very much for having me here today. I look forward to the q a. Thank you, mr. Far. Mr. Peterson, welcome and youre recognized. Chairman brady, thank you for inviting me to speak. Im grateful to share my perspective of how tax reform can help all markets. Im doug peterson. Our commitment to transparency and intrigue tegrity beginni the expansion of the Nations Railway system to the growth of Digital Information technology, s p globals essential intelligence has remained independent and guided important decisions throughout u. S. History. Today i want to thank the committee for all the work you have been doing to reform the tax code. I offer my continued support as you move through the legislative process. My message today is twofold. First, we need to reform the u. S. Tax system, including lowering the Corporate Tax rate and putting together a more Competitive International system. Second, we need a permanent, comprehensive fix that will promote aggression, and growth to support American Companies and works are. We pay a large majority of our taxes in the u. S. Since the u. S. Has the highest Corporate Tax rate among the countries at 35 , we have much higher ekt. Canada has dropped its corporate rate from 36 to 26 and the United Kingdom will have a rate while many of our competitors pay in the low teens, this high rate hurts our with a less Competitive International system, u. S. Companies face an uphill battle. Currently when Foreign Companies establish a system they pay little if any tax here. Foreign Companies May pay little to no Corporate Tax when they return home. In contrast, u. S. Businesses are taxed fully in the u. S. And more than 2. 5 trillion in profits from u. S. Companies is offshore today, something that doesnt happen under other tax systems. The basis of our tax zone was designed after world war ii. The last rewrite occurred before the internet. The emergence of technology, advanced motor vehicanufacturin agriculture and global sags izaf our markets are all new features of our economy. The tax inequities that advantage foreign competitors can be traced to this antiquated code. Its time for a change. For decades United States has been the birth place of innovation and new business formation. We should us