“This is a time for us to be bold.”

Tillis Talks about the Economic Urgency of Rewriting the Tax Code

WASHINGTON, DC – With Congress moving forward on an plan to rewrite the nation’s tax code, U.S. Sen. Thom Tillis (R-NC) appeared before a breakfast meeting of The Ripon Society yesterday morning to discuss the possibility that an agreement can be reached, and the impact it will have on the economy next year.

Tillis is serving his first term in the Senate.  Elected in 2014, he previously served as Speaker of the North Carolina House of Representatives.  As Speaker, he helped engineer an effort that not only reformed the state’s tax system, but transformed the Tar Heel economy from one of the worst in the nation to one of the top five.  Tillis talked about this effort in his remarks, and shared some of the lessons he learned and how they apply to the current reform effort in DC.

“This is a time for us to be bold,” he stated.  “It’s a time for us to make many people angry at the concept but happy with the result. As a leader, I had to have a lot of people trail into my office and say, ‘We love what you’re doing except for our righteous exemption or exception.’ You cannot possibly take that bait. You have to build a model that makes sense.  You have to model it against various sectors and industries.  The hard part is having people remain focused on what happens if you do it right.  I would argue that North Carolina — beginning in 2011 and continuing in 2013 — has done it better than anyone else. And if anybody’s got a better example in this great United States, I’d love to see it. It’s sustainable — it created a $2 billion balance from a zero rainy day fund over the course of two years. The other policies retired $2.7 billion in debt to the federal government as a result of our unemployment obligations. And it’s thrown off about $400 million in surpluses each and every year in North Carolina for the past two or three.

“I’ll let the propeller-heads figure out what the target rates are and the pay-fors. What I’m trying to do is remind members of why it’s critically important to get that vote to get this economy going. About half the market has probably already factored in some movement on tax reform; half hasn’t. If we produce meaningful tax reform, we’re going to see that other half of the market start making strategic growth investments.  And I think those who have already priced in some of it will double down. We will see an economic result over a short period of time that will make the pressure that we have when we go in that chamber and vote for this a distant memory. That’s exactly what happened in North Carolina.”

In addition to discussing the Congressional effort to rewrite the tax code, Tillis also talked about another reform effort he is spearheading – namely, to reform the nation’s immigration system in a way that helps the economy, strengthen border security and, unlike previous reform efforts, is not so all-encompassing that it is unlikely to be passed.

“You would think that after 30 years of failure we would figure out how to do it differently,” the North Carolina lawmaker declared. “You would think that people would understand that comprehensive [reform] doesn’t work. It simply doesn’t work. And again, getting away from the statutes and all of the complexities of how you implement immigration reform — it doesn’t have anything to do with that. It has to do with creating a transaction where you can convince a sufficient number of members to vote for it. And you can only do that if you start about strategically pairing certain policies that relate to border security, interior security and homeland security with immigration reform.

“As you move on, you get to a discussion about what the work needs are.  What are the labor needs for this country?  How can you on that one hand say I want to implement a tax policy that will allow for a 3 to 3.5% sustained GDP growth rate, and understand that the single greatest impediment to sustaining that growth rate will be workforce? I mean — how can you not understand that? And how do you get the workforce?  Well one, you do a better job of educating people — producing more people out of our institutions.

“The other thing is you have the safety valve of legal immigration.  And that gets to H-1B visas, H-2A, H-2B visas, etc.  But the only way you get to that phase of immigration reform is to prove you can do something as simple and as no-brainer as getting the DACA problem addressed paired with border security. That’s what The SUCCEED Act is intended to do. We intentionally did not put border security in our bill because we wanted a separate track to talk about the border and homeland security/interior security aspects. We’re moving along that track today.

“I’ve said publicly I would never vote for just a DACA fix without a creditable border security solution. I’m willing to take the hit, and I’ve got a bill out there that has no treatment for border security because I don’t sweat the interim product. I think the product we vote on the floor will be a good balanced bill that proves phase one of immigration reform — the Dreamer population — has been addressed.  So we’ll have the first meaningful immigration reform in 30 years. Then we can move on to what I think would have to be reforms we’re going to do for work visas.”

After his remarks, Tillis took questions about a number of other challenges facing America, including one about the country’s military readiness crisis.  It is a crisis that Tillis is working to address as a member of the Senate Armed Services Committee.  It is also one, he said, that is largely self-inflicted.

“We’re going to hammer the military for not being where they need to be,” he said, “What we should be doing is going to the Senate Armed Services Committee hearing room and put a mirror down where the witnesses are and ask ourselves why we’re in this situation. We have to have people who have the courage to remove the sequestration. We have to have the courage to remove a lot of the structural impediments we’ve created that make things more costly. We have to ask ourselves how we got to a point where it takes 10 years and a 680 page RFP to come up with the next generation of handgun.  My handgun is a Walther PPS .40 Caliber.  I can put a blindfold on, break it down and put it back together in maybe two minutes if I can’t get that spring positioned quite right. It’s a fairly simple device. Why on Earth do you create an RFP that has 680 pages? The technical spec people say, ‘Yeah, but to be fair, only 39 pages in technical specs.’ Then what the hell are the other 640 pages there for?”

To view the remarks of Senator Tillis before The Ripon Society breakfast discussion yesterday morning, please click on the link below:

The Ripon Society is a public policy organization that was founded in 1962 and takes its name from the town where the Republican Party was born in 1854 – Ripon, Wisconsin. One of the main goals of The Ripon Society is to promote the ideas and principles that have made America great and contributed to the GOP’s success. These ideas include keeping our nation secure, keeping taxes low and having a federal government that is smaller, smarter and more accountable to the people.