On Senate Floor, Portman Discusses How Tax Reform is Already Helping Ohio Workers & Families
WASHINGTON, D.C. – U.S. Senator Rob Portman (R-OH) delivered remarks on the Senate floor today to discuss how tax reform is already helping Ohio families and workers. Portman detailed how the Tax Cuts & Jobs Act is already delivering on the two main goals Portman and others had when crafting the legislation: to encourage economic growth and investment, and to put more money in the pockets of American families. The proof, said Portman, is in what’s happening at Ohio companies like the Sheffer Corporation in Cincinnati and at Ohio’s major-private sector companies that are announcing more investment in plants and equipment, wage increases, bonuses, higher 401(k) matches, and more.
Transcript of his speech can be found below and a video can be found here.
“I come before you today to talk about the historic tax reform legislation that was passed here in the United States Congress, signed into law by the president at the end of the year, and talk a little bit about what we’ve learned since then, even in the last week. We created this legislation, you’ll recall, with two goals in mind. One was to provide middle-class tax relief to families. The other was to provide our businesses and our workers with a more competitive tax code. This is something that became very clear to all of us as we looked at it that, unfortunately, we were asking our workers here in America to compete with one arm tied behind their backs because of our tax code.
“It’s been a couple months now since this legislation became law, and both of those two goals that we set out to accomplish are being achieved. It’s already happening. In January, the Internal Revenue Service updated its tables for withholding. In other words, they went to employers and said, because of the tax cut, you should withhold less money in every paycheck. So that’s happening. And the Treasury Department tells us that 90 percent of American workers, 90 percent, are having their withholding changed in a way that’s positive for them, meaning that Uncle Sam is taking less out of their paychecks. So people are already starting to see that. Tomorrow is Friday, another payday. You’re probably going to see that in your paycheck tomorrow or a week from tomorrow if you haven’t already seen it. And that means that people are actually getting relief directly for themselves and their families. This is more take-home pay for folks that enables people to have a little better family budget. With higher health care costs and other costs for years and years, no salary increase, having a little more in the family budget is really important to folks and is making a lot of difference.
“In Ohio for a family of four at the median income level, which is about $70,000 a year, this [tax reform law] means about a $2,000 a year savings. That’s significant for people. Having talked to a lot of constituents who are beginning to see this, they’re realizing they now have a little more money for retirement, maybe for health care, maybe to help their kids or their grandkids. So that’s good. There’s something else that’s in the bill that hasn’t gotten as much attention. That’s the fact that there were three million Americans who were paying taxes previously, had income tax liability, who do not now. Why? Because when you lower the tax rate, some of these people who are typically working poor, in other words they’re working but they’re not making much in income, they have the ability now to get out from under taxes altogether. This also encourages more people to go to work, to not be dependent on the government programs, but to go to work if you have the lower tax rate at the lower end of the economic scale. So this is good, too. This is in this tax legislation. More than three million people not having tax liability anymore.
“Part of it is because of the lower rates we talked about. Again, the proof is in the paycheck on that one. But part of it is also because in this legislation, we double the standard deduction but also double the child tax credit and make it more refundable than it already is. So that’s happening. It’s working. And that goal is already being achieved not by this Congress but by the people we represent, the American people and families across this great country. So we’re happy to see that.
“The second part of this is that a more competitive business code is benefiting workers very directly. And this is something you’re hearing about just about every day. Now, more than 300 businesses have made announcements saying, ‘You know what? We’re going to give people a bonus because of the tax reform legislation’ or ‘we’re going to give our employees a little higher starting wage. We’re going to put more in the 401(k), or more in the defined benefit pension plan or maybe we’re going to give a little more to charity. Or maybe we’re going to invest more in equipment and tools so that people can be more productive because productivity we know is key to getting wages up and improving the economy.’ We’re hearing this across the board all over the country. I’ve seen this in Ohio. I’ve been to companies in my hometown of Cincinnati, Columbus, Dayton, and Cleveland just in the last month, where I’ve gone and visited with these companies while they are making announcements and talked to the employees, at a town hall meeting setting where they have the opportunity to have a back and forth as to what this tax reform measure means to them. It means direct tax cuts for them—as it does for, again, about 90 percent of American workers—but on top of on top of that, it means that because these businesses have the ability to be more competitive, it makes [workers] more competitive. They are already getting some of the benefits from that.
“Last week I joined President Trump in Cincinnati at one of these companies. It’s called the Sheffer Corporation. It’s a small manufacturing business. They have decided to make investments in their plant and equipment. That’s going to help make them more competitive and make their workers more productive. They compete globally. It’s an incredible company. They make cylinders and they make them this big and they make huge ones and they compete all around the world. They are doing a great job. Frankly, this tax reform bill really helped them. On top of the investment they are making, they are also making a direct investment in their employees. Every employee of the 126 people who worked there got a $1,000 bonus check after the tax legislation was signed into law. It’s helping them. The company president, Jeff Norris, he said just before the visit we had earlier this week, he said for some people in Washington that’s ‘crumbs,’ referring to how some people have called this ‘crumbs’ of getting this tax relief. But he said for the Sheffer people, we consider it ‘fine dining.’ Another way to put it is, this makes a difference to the people and their lives and their families.
“This is part of the legislation that resulted from lowering the tax rate. Of the developed countries around the world, the countries that are industrialized, we had
“We have also heard from Ernst and Young—which is a big accounting firm—they did an analysis and said 4,700 American companies became foreign companies over the past ten years or so because of the tax code. And if you had the kind of code we just put in place with this legislation that was passed here, those companies would still be American companies. That’s 4,700 companies. That’s a lot of people, a lot of investment. We studied this in the Permanent Subcommittee on Investigations, a bipartisan investigation. We looked at what happens when these companies go overseas. No surprise probably to you, they take their jobs and investment with them. So when a company pulls up stakes here and goes overseas, it’s not just about moving a corporate headquarters. We found it’s also about having less employment here directly but also indirectly because companies that supply them, contractors, have less employment, and they also make their investments increasingly overseas.
“We also found as we studied this thing that companies were actually taking their money that they made overseas and keeping it all overseas rather than bringing it back here and repatriating it, even though they were U.S. companies. So this is something that we studied as part of a bipartisan Senate Finance Committee working group that I co-chaired with Senator Chuck Schumer, and we found that unless you lower this rate and go to a more competitive international system, you weren’t going to get that money back. So part of what this will do is what we talked about in terms of improving the lives of workers here in America, part of what it does is it repatriates, brings back some of that money that is stuck overseas—the so-called lockout effect—and brings it back here. How much is that? Well, economists think it’s somewhere around $3 trillion. Some say more. Apple, you might have seen recently, announced they were bringing hundreds of billions back here, repatriating that money here. They are also going to pay I think about $38 billion in taxes to the U.S. Treasury, but that’s worth it to them to bring that money back. We want them to bring the money here. Why? We don’t want them to invest it overseas in a R&D facility there or a factory there. We want it invested here, right? So that’s what this tax reform does. That’s why I think some of what we have heard—as exciting as it is for these workers and for companies to make these decisions that help people right now is really important—I think the bigger investments we’re going to hear down the line, which is when the next time a big American company that has a global business says ‘where am I going to put my factory, where am I going to do my research and development?’ They’re going to say ‘we’re going to do it here in America.’ That’s what’s really exciting to me.
“Let’s get back to the business of making things in this country. Let’s get back to having wages that are going up consistently rather than the relatively flat wages we have seen over the past couple of decades, and let’s see a renewal of hope and opportunity here. I think this is exciting. I think we’ll see more of it.
“Just in the past week, by the way, we have seen seven more major companies announce higher compensation for their employees. CVS, in the last week, Tyson in the last week, Chipotle, Best Buy, Charter Communications, Lowe’s, FedEx. That’s just in the last week. In total, these companies have 1.3 million employees who are now going to benefit—on top of all the other 300 announcements that we talked about earlier—they are going to benefit from increased investments these businesses are able to make because of this new tax reform. This is good news. It’s good news for the people I represent.
“In Ohio, some of our larger employers have already made their announcements. Fifth Third Bank, headquartered in Cincinnati, employs 8,800 Ohioans. They announced they are going to raise their base wage for entry level people, and they will give $1,000 bonuses to all their 13,500 employees. Nationwide Insurance, headquartered in Columbus, has 15,000 Ohioans employed. They will increase 401(k) matches, so the match that they give to people’s 401(k) contributions will increase. That’s great for retirement savings. They will do that for 33,000 employees around the country. They are also going to give $1,000 bonuses to 29,000 of their employees. JPMorgan, probably the third biggest employer in Ohio now of all the private sector employers, they have about 21,000 Ohioans that they employ. Many are in the Columbus area. Some of you know that because they are a huge presence in Polaris, north of Columbus. They have announced they are going to add 4,000 new jobs, raise their base wage for 22,000 employees, increase their charitable donations and increase their small business lending, they say all because of this tax reform legislation. So that’s good news. Our biggest employer in Ohio is Walmart. It may be in your state, too. 50,000 Ohioans work for Walmart. They have announced they will raise their base wage for all hourly employees, distribute $1,000 bonuses, expand maternity and parental leave opportunities, and increase funds for employee adoption expenses. That’s our largest employer. Other Ohio employers who have announced something include Fiat-Chrysler and their jeep plant up in Toledo, which we are so proud of, Home Depot, Lowe’s, AT&T, they have all announced increased investments in their operations and workers as a result of the tax reform.
“So I’m excited about this. It is actually working in a way that many of us had hoped it would and said it would, but really there have been more announcements even than I think the most optimistic tax reform advocates expected. And again, I think we’re going to see a lot more over time because ultimately this is about making the United States a better place to do business. By the way, some of these companies are not American companies. They are foreign companies that choose to invest in America. And foreign direct investment is something we encourage because that brings more jobs here to this country. So if a company like Honda, which is a big auto employer in Ohio, chooses to invest more in Ohio rather than in Japan or China or Germany or elsewhere, because of this tax reform legislation, that’s also important. You’re going to see more and more of that happening in my view because, again, they are looking at the lower rates, they are looking at the ability to expense what they have purchased in terms of plant and equipment more quickly. This immediate expensing is really important in this legislation for companies like that, manufacturers. So this is not just about American companies staying here rather than going overseas. It’s also about foreign companies choosing to come here and hire American workers, which is also good for us. So I’m hoping that a combination of this tax reform, what’s being done on the regulatory front to make regulations better, for particularly smaller businesses who were feeling a lot of that burden, will help American hard work and ingenuity, and rewarding that ingenuity will help America be able to compete in this global marketplace in ways that we haven’t done for many, many years.
“The historic tax reform is basically putting America back in a position where people are now going to look to us again and say ‘America is kind of a model that I want to follow.’ You know, the American free enterprise system and the system where if you work hard and play by the rules, you can get ahead, you can achieve your dream in life, that was something some people were beginning to question. Now I think it helps to polish our image, which had become somewhat tarnished as wages had been flat. We were kind of stuck in low economic growth, 1.5 percent to 2 percent growth. Now I think we have the opportunity to break out more and to be that beacon of hope and opportunity for the rest of the world, and most importantly to be able to give people the opportunity to achieve their American dream, whatever it is.”