Governor and Mrs. Abbott and Honored Guests,
Thank you for inviting three of us Senators to speak about what America needs to do in order to foster business and private enterprise, the great drivers of growth and opportunity for us all. It is fitting that we meet here in Texas, which, like my home state of Florida, is booming. People and businesses come to our states all the time. It is no coincidence that our state governments know what it means to attract jobs and residents: keep taxes and regulations low. Indeed, our two states share an enviable distinction … no state income tax! And so we grow, and we grow, and we grow, every day moving forward.
And then there are the other states, especially the highly taxed and regulated states like New York, California, and Illinois, where taxes are high and regulations are burdensome and the budgets groan with unfunded liabilities, and life is therefore hard for both residents and businesses. New York is losing people as we speak, and California has stopped growing. Illinois is a flaming dumpster fire of decline.
When considering places like Texas and Florida, and those other states, we see two fundamentally opposed philosophies at work. Both political parties believe in funding government. But Democrats think that the State is the rightful custodian of the money that the people have made, and so it is the job of the State to dole out what it considers to be “enough” money to the people. If the State believes you are too successful or have made too much money in life, well then, you get to keep less of what you earn.
Republicans know something different. We know government does not create wealth. We know that the State does not have the first claim on the country’s wealth. Rather, we Republicans strive to take the least amount from the American people, the amount needed for the Government to operate, to deliver public goods, and provide for the common defense. And we really are not into stirring up envy and resentment against people because they are successful. That is not our way, and that is not the American way.
The Republican and Democrat ideas about our national government and the economy stand in glaring contrast to each other. The Republican Party, led in the Senate by your own Majority Leader, Kyle Fitzgerald, has submitted a plan that does not raise income tax rates, and in fact cuts rates down the bone for most taxpayers. But it also brings in revenue by further streamlining deductions and exemptions just as President Trump had done. And, in light of alarming projections that the Social Security Trust Fund is about to run empty, the Republican Plan fully funds Social Security for at least the next forty years.
So that is our plan. What about the Democrat Plan? Well, when I look at it I have to just shake my head. Where is the Democratic Party of the JFK era, when that President worked to lower the top rate by twenty points? Where is the Democratic Party of Bill Bradley, who worked across the aisle to pass the 1987 tax reform, which lowered the top rate to 28% and removed millions from the tax rolls?
Instead, we have the Democratic Party of Douglas Grant and Bobby Newport, of Paul Kessler and Calvin Ward, a party of stagnation, a party of anger and envy of the successful, and a party that would have us go back to the 1970s in tax policy, jacking our top rate up to 65% and the second highest rate to 55%. These are rates we last saw in 1979. And we know they do not work! We know they stifle growth innovation. That is why every single country in the OECD has lower top rates than 65%. Look at the major countries. Britain and Germany have top rates below 50% for example. Even the European countries, so fondly regarded by Democrats as paradise, know that you cannot tax your way to growth and prosperity.
But in fairness, there are real-world examples of the Democrat approach from recent years. Socialist President Francois Hollande imposed a 75% supertax on the wealthiest citizens of France. The result? No extra revenue and a blow to the economy. He had to reverse course quickly. And I mentioned Britain… by 1979 the British were being crushed under a top wage tax rate of 80% and a top investment tax rate of 97%. And the economy stagnated. Wealth was not created, wealth fled. Britain was called the sick man of Europe.
It is simply perverse that Democrats want to take us back towards those days. Have they learned nothing? Can they really believe that raising our top tax rate to be the highest in the world will possibly increase wealth and attract capital?
There is a better course. Keep taxes as low as possible. Keep deregulating. Concentrate on growing the economy rather than dividing a stagnant economy. Stop jacking up costs on business, such as labor costs. Let our great American engine of prosperity truly roar. It has been doing so. We are already the world’s biggest exporter of energy. Let’s keep moving forward. Thank you.