September 21, 2021
"Beijing looks at our endless debt, our entitlement crisis, and our tax hikes and sees strategic advantage."
Today, Senator Sasse spoke on the Senate floor about President Biden's massive, reckless tax and spending spree.
Full transcript is available below.
I want to talk about some of these taxing and spending issues. But I want to make it clear that I'm not here to talk about this because I'm obsessed about the marginal tax rates for the top 1% of Americans – I’m not. It's not why I ran for office, but I am here today to talk about this because as a China hawk, I am obsessed with the fact that the American people, the American government, American technology companies and lots of companies that aren't today thought of as technology companies but will increasingly be technology companies operating in different vertices. I am obsessed with the fact that our firms and our people are going to need to be able to compete with the Chinese Communist Party.
The future of everything from technology, to trade, to global security and defense issues is going to go one of two ways. It's either going to be led by the Chinese Communist Party or it's going to be led by the United States and our allies and western values. The future of not just global economics but global security policy over the next three, and five, and seven, and ten years is going to be radically shaped by which direction we go. Failure isn’t an option. This next century is going to be defined either by oppression, censorship, and brutality - the sort of things that we're seeing in Xinjiang right now as the Uyghurs are brutally oppressed by the Chinese Communist Party - or we're going to see a world that's led by western values and beliefs in trade, and human rights, and open navigation of the seaways, and transparent contracts, and the rule of law.
That’s the proper context in which we should be considering this taxing and spending debate and it would be helpful for the American people if we would discuss President Biden’s tax and spending spree in the context of that global technology and diplomatic competition with the CCP. Because these dangerous policies in this $3.5 trillion - or whatever price tag it's going to end up at - this piece of omnibus legislation, it's going to hurt our ability to compete against Beijing.
Spending is out of control. The American people last November - just ten months ago - elected an evenly divided Senate and yet somehow progressives believe they have a mandate to radically remake America. You actually hear a lot of them use language about radically transforming American as if an American public that voted for a 50-50 Senate was voting for some sort of radical re-making of American policy as a newer, new, bigger, big New Deal.
They’ve spent trillions of dollars that we don’t have already this year and now they’re looking at add another $3.5 trillion to expand cradle-to-grave government propositions about how government should interfere and interact with the average American's life.
But, what is government? What a government is supposed to be is a compact for the common defense. The first and most fundamental principle the government exists to do is make sure that everyone is free from violence and chaos and tyranny so that they can organize their lives in local communities. That's the first thing government is supposed to be and yet we also believe that government has some social safety net responsibilities. Stated in a summary fashion, you might say the government is supposed to be the army and we also have some social safety net insurance programs attached to them.
It seems like, when you listen to Senator Sanders speak, he thinks of it exactly the opposite. The government is a giant insurance company that just happens to own a navy. And sometimes it sounds like he doesn't even really care if we own a navy, he just conceives of the government as a giant insurance program where everything is compulsory and government decides what programs people need to have and what services they want. The vast majority of the American people don't want that and they didn't vote for that and a 50-50 Senate shouldn't be trying to deliver that.
This year the President and my Democratic colleagues have increased spending in every area: social, environmental, and economic policy related. If there’s an opportunity to spend over the course of the last eight and a half months, they’ve taken it. A couple trillion here, a couple trillion there and pretty soon you're talking about real money.
Now it’s the time to pay the piper and my colleagues are talking about raising taxes. But this is not just any tax hike we're talking about - when you look at the corporate rate that we're looking at, we would be talking about the highest corporate tax rate in the industrialized world - these are just the new taxes - and yet even that doesn't pay for all of the new spending. So, we're talking about new legislation that would radically raise taxes to the highest corporate tax rates in the industrial earth and yet still not pay for all of the new spending they're talking about. So, while deficits grow forever, opportunities shrink.
We have a member of the House of Representatives who in her super telegenic way figured out how to get attention last week by wearing a dress that said "tax the rich" on the back of it. What the dress should really read is "tax the young" because history tells us very clearly when you deficit spend at the level that they're talking about doing here, this is a tax of current, older, and wealthier people against younger people. That's how inflation works, that's how debt and deficit work. The dress should have read "tax the young."
These are tax hikes that make Communist China a much better business environment than the United States. Under the President’s plan, Americans would have a 32% combined rate compared to a much smaller Chinese tax rate. At their baseline, nominal level but it's important to recognize that the Chinese tax code currently incentivizes high-tech businesses with an even lower 15% rate, so we’re talking about north of a 30% rate against the Chinese Communist party trying to make sure they attract investment by taxing their investment and digital companies at a 15% rate. This is the definition of shooting yourself in the foot.
My friends on the other side of the aisle are a lot of smart folks, and they know that tax rates actually matter for international investment and for competitiveness. And one of the ways you know they know is because for months, as Treasury Secretary Janet Yellen has been out seeking a global minimum tax arrangement, she is admitting the obvious truth that a new tax increase will saddle American companies with a burden that other companies across the globe don't have. The CCP is not going to bail us out as we would potentially raise taxes to the highest rates in the world by also raising their tax rates to bail out President Biden’s domestic agenda. Beijing looks at our endless debt, our entitlement crisis, and our tax hikes, at our disunity, and they see a strategic advantage.
These China-friendly tax hikes would raise the cost of doing business in America. These China-friendly tax hikes would drive innovation overseas. These China-friendly tax hikes would lead to more corporate inversions. These China-friendly tax hikes would hurt American R&D. If you want the 21st Century to be defined by global Chinese Communist Party leadership, you would tax and spend just like this legislation seeks to do.
Reckless spending doesn’t steward a great nation. Super tax hikes do not promote innovation. Competition with the Chinese Communist Party is the defining national-security issue of our time – whether my colleagues in this body want to admit it on a regular basis or not.
While the Chinese Communist Party plunders American intellectual property, steals American ingenuity, and pours investments into their state-run technologies, Washington is debating whether or not we should punish innovative firms and innovative Americans.
This isn’t strong. This isn’t smart. The American people know better.