On the Senate Floor, Portman Celebrates America’s Move to the New Tax Code, Highlights Benefits of Tax Reform

WASHINGTON, April 18 -- The office of Sen. Rob Portman, R-Ohio, issued the following news release:

U.S. Senator Rob Portman (R-OH) delivered remarks on the Senate floor last evening on Tax Day, the last time American's will file under our old, broken, burdensome tax code. While American's won't file their taxes under the new code until this time next year, workers, families, and businesses are already benefiting from tax reform. Portman highlighted the successes he's seen across the state since the first of the year, including his visit to Cincinnati-headquartered Kroger on Monday.

Said Portman in the speech, "I'm excited to be here today to say this is the last day we'll have to file under the old tax code--but also to say the new tax code is helping to give families I represent the opportunity to do a little better, to give businesses I represent the opportunity to be more competitive and reinvest in their employees and business and productivity. That will make the biggest difference in the tax reform effort."

Transcript of his remarks can be found below and a video can be found here (https://youtu.be/fs-DnUZkoWM).

"I just got the chance to hear my colleague from Nevada talk about the importance of the tax cuts and tax reform that this chamber passed at the end of the year and is now in effect. All I can say to my constituents is this is the last year you're going to have to file under the old code. Now you have the new code next year.

"Why is that important? Because it's simpler--it doubles the standard deduction as an example, which is a great simplification for a lot of taxpayers. It also takes about three million people off the tax rolls altogether. Think about that: according to the Joint Committee on Taxation, over three million Americans who currently have income tax liability will no longer have it under this new tax reform bill.

"Why? Because it focuses on lowering the rates, doubling the standard deduction, doubling the child tax credit. That helps people who are lower-income Americans who right now have tax liability who won't in the future. So it will be easier for a lot of people a year from now because they will have no tax filing to make because they won't have any tax liability, and for others it's just a simpler form.

"Although what's happening already this year is that the paychecks are changing. Why? Because the IRS is saying that employees are going to get more money in their paycheck because the employers are going to withhold less as we go into the year 2018 because the tax proposals are in effect at the beginning of this year.

"So even though this is the last time that we are going to have to file under the old code, already people are seeing some of the benefits of tax reform. When I go around Ohio, I talk to people. They say, 'Rob, my paycheck has already changed.' That's because 90 percent of Americans are now being told they will have less withholding taken out of their paychecks, again because of the lower tax rate, doubling the child tax credit, doubling the standard deduction. This is really helping.

"The average in Ohio is probably $30, $40, maybe $50 every two weeks. The average savings for a median income family is about $2,000 a year in tax relief. That's the average. That's a big deal. That's not just crumbs.

"Most people I represent live paycheck to paycheck. Most people I represent think $2,000 is really helpful. By the way, they told me they are using it--it might be for a long-planned vacation they couldn't afford. It might be, as a couple of people have told me, to help with regard to health care because they couldn't afford to buy health care until they had that extra $2,000 or more in their pocket for some people to be able to afford health care. For others, we heard a great story this morning from my colleague in West Virginia about a woman who said her daughter used to have to do her schoolwork at school or maybe at the library. She couldn't come home and do it because they couldn't afford high-speed internet. Now she can afford high-speed internet with this tax relief that is being provided.

"This is something that is actually affecting people right now. As you go to the Post Office to mail your form today or as you send it in electronically, just know it's going to get a little bit better, a little simpler, a little less tax liability. By the way, the IRS has had some difficulty in accepting electronic filings today. Another reason we have to actually go beyond just tax reform, as important as that is, and we have to ensure that we have an IRS that is working for the American taxpayer. The taxpayer service, which is the number of calls that are being answered, the number of answers which are being given correctly, all those indicators are concerning right now.

"So we do need to ensure that the IRS has adequate funding to respond to taxpayers but also that there are reforms at the IRS, so that the computer systems do work, so that the stovepipe different systems are talking to each other.

"So tax reform and tax relief are very important, but also as we have seen today with this glitch with regard to electronic filing, we have to be sure that the IRS is up to the task and providing the taxpayer the service they deserve.

"The tax relief bill wasn't just for families and individuals. It also focuses on business relief. Why? Because we know that American companies were not competitive under the old code. You had investment going overseas, jobs going overseas. So for small businesses and large businesses alike, there is tax relief. We're hearing more about that because we have seen a lot of headlines, another one today about yet another major company that is making some investments here in this country.

"I was at the Kroger Company yesterday. Kroger is one of the largest employers in the United States, a great grocery store chain, the largest in the country, by the way. They happen to be headquartered in Ohio. They made a huge announcement yesterday. What they said is they are going to take the savings they got from the tax relief and tax reform measure and they're going to give it back substantially to their employees. And the things they talked about were really interesting. One is to increase the 401(k) match. That's important. They already give a 100 percent match. Now they will give it at five percent rather than four percent of people's salaries.

"That's nice because people can save more for their retirement. They talked about helping employees who had a tough time through an employee assistance program. They're increasing funding for that program. They are talking about applying an employee discount program so employees can buy more from their home stores, expanding how much they can buy with the discount. That helps their employees.

"But they also talked about something I thought was really great, which is continuous education, lifelong learning. They said that they are going to provide their employees with a $3,500 a year stipend to continue their education. Maybe it's getting a GED, maybe it's getting an MBA, or everything in between. They believe in education. They want to be able to help these employees be able to better themselves. They believe that will help them, too, to keep people longer term.

"This is part of how they are using the tax reform. By the way, it's applicable to everybody who has been there six months. You can be part-time or full-time. You can get this employee assistance for education, all coming from the tax relief that this body passed.

"Is it making a difference in the lives of your constituents? It certainly is in the lives of mine, I can tell you that. I have been to 13 different businesses now around the state of Ohio. I have asked them this question directly, what's happening, what are you doing? All of them tell me they are investing in their people or their plant and equipment, helping buy new technology so that people can be more competitive, more effective at doing their job.

"I have also had a half dozen roundtable discussions where I bring small-business owners together, and dozens of businesses have told me what they are doing. Some are providing more health care coverage, in a couple of cases. One is a small craft brewer in Ohio. Another is an auto parts company. They are providing health care to their employees for the first time. In one case they had before it got too expensive because of the Affordable Care Act. Now they are able to provide health care to their employees. Another one never provided health care because it's a small business just getting started. Now they can provide health care to their employees because of the savings from the tax bill.

"Others are doing much more in terms of the community charitable giving. Again, some with regard to 401(k)s, some with regard to new equipment and machines to make their employees more productive because when the economists look at what's going on in our economy, they think, 'gosh, the reason wages haven't gone up much in the last decade, and really it's been flat in Ohio, is because worker productivity has not been high enough.'

"This tax reform effort is providing more investment to our companies. I would much rather have people investing here in America than investing overseas. That's what was happening. Three times as many American companies were bought by foreign companies last year as the other way around because of our tax code. There is a study out by Ernst and Young saying 4,700 U.S. companies went overseas. When they do that, they take their investment with them. They take some of their R&D with them.

"We have done studies on this to be able to show this. 4,700 companies had gone overseas that would have stayed American companies just over the last 13 years if we had the kind of tax reform we now have in place. Those companies now have an incentive to invest here. Foreign companies have incentive to invest here. When they are trying to decide between investing in Japan, China, or Europe, now they look here and say, 'this is a lower tax rate and you get immediate expensing.' In other words when you buy something you can expense it more quickly, you can deduct it more quickly. The encourages investment here, whether you're an U.S. company or a foreign company. That's why this is exciting.

"There's some new information out from the Congressional Budget Office that talks about economic growth, and it says because of the tax reform effort, we're seeing higher growth rates. For this year we're in right now, the Congressional Budget Office projected two percent economic growth, pretty weak. I mean, it's growth, but it's not enough to get wages up or give people the opportunities they're looking for when they work hard and play by the rules.

"Guess what they are saying now? 3.3 percent, not two percent, but 3.3 percent economic growth were the projections for this year. Again, they say this is attributable to the pro-growth policies, including the tax reform effort we're talking about and the tax cuts. They also say for the first time in a long time we're seeing wages going up. They project wages up. Look at last month and the month before and you can see the wages start to creep back up again. That's really exciting to me because ultimately we want to see economic growth, yes, but we really want to see working families get a higher income so they are not stuck in the middle-class squeeze where their income is flat but their expenses are up. The biggest expense that has been increasing is health care. Yes, we have to do more on health care and do more to increase economic growth. Wouldn't it be good to have wages go up to be able to compensate for that, and to be able to give people this sense that if they do the right things in life, if they are willing to work hard, if they are willing to play by the rules, they can get ahead and their kids and grandkids can get ahead too.

"I'm excited to be here today to say this is the last day we'll have to file under the old tax code--but also to say the new tax code is helping to give families I represent the opportunity to do a little better, to give businesses I represent the opportunity to be more competitive and reinvest in their employees and business and productivity. That, ultimately, will make the biggest difference in the tax reform effort."