In Ways & Means hearing, Kelly touts successful 2017 tax reform

WASHINGTON, D.C. -- On Thursday, U.S. Rep. Mike Kelly (R-PA), Chairman of the Ways and Means Subcommittee on Tax, touted the successes of the 2017 Republican tax reform law as the Committee continues to review provisions ahead of their expiration in 2025.

The law, known as the Tax Cuts & Jobs Act (TCJA), cut the United States corporate tax rate from 35% to 21%, the mid-range of global corporate tax rates. The result was a 3% rise in the Gross National Product, the highest growth rate in 13 years. Additionally, median household income soared, and poverty rates plummeted. That led to a real surge in median household income by a record of $5,220, almost 50% larger than the next highest income gain and 11 times the average annual gains since 1967. Under the Republicans' tax law, revenues reached a record high of $4.9 trillion in 2022.

"The Tax Cuts and Jobs Act put America back in the driver's seat in the global economy. We cannot continue down the economic path the Biden Administration is taking this country, which depends upon higher taxes and record spending," Rep. Kelly said. "I encourage my Democratic colleagues to set aside their partisan talking points and join us in renewing quality, pro-growth legislation included in the 2017 tax law which created one of the best economies our great nation has ever seen."

Kelly also demanded further review about the Biden Administration's unilateral negotiation of a Global Minimum Corporate Income Tax that would require American businesses to foot the bill for Europe’s socialist policies. Kelly held a Tax Subcommittee hearing in July 2023 examining the policy, which is part of Organization for Economic Co-operation and Development’s (OECD) global minimum tax, known as Pillar 2.

Economist and former Texas Senator Phil Gramm testified before the committee during the hearing. Rep. Kelly asked him to explain how the Global Minimum Corporate Income Tax circumvents the Constitution and Sen. Gramm stated: "This is the greatest abuse of the Constitution of the United States in my lifetime was President Biden going to Europe and negotiating a minimum corporate income tax and giving them the power to tax corporate income in America…It was extortion committed against the Congress."

BACKGROUND

Thursday's hearing examined pro-growth policies included in the 2017 tax reform law, known as the Tax Cuts & Jobs Act (TCJA), and other proposed tax legislation. The hearing also explored tax policy ideas as many provisions of TCJA are set to expire in 2025.

In previous hearings examining TCJA, Kelly highlighted Opportunity Zones, which have transformed cities like Erie, Pennsylvania in Kelly's district. Kelly leads the "Opportunity Zones Transparency, Extension, and Improvement Act," bipartisan legislation that would extend the investment and deferral window, providing a longer time horizon to drive more investment into high-impact projects in low-income communities.

Rep. Kelly highlighted the local impact of TCJA's success -- the bipartisan Opportunity Zone legislation that spurred over $100 million in economic development in downtown Erie, Pennsylvania, what was once home to the poorest ZIP code in the Pennsylvania and was among the poorest ZIP codes in the United States.

Opportunity Zone investment reached almost 4,000 communities through its first two years with $48 billion in investments from more than 21,000 individual and 4,000 corporate OZ investors, deployed via 7,800 Qualified Opportunity Funds.