U.S. Rep. Darin LaHood addresses tax reform, NAFTA status and the national opioid crisis

MCT

Hours before Tuesday’s deadline, Congress and the White House had yet to begin serious negotiations over next year’s budget, threatening a government shutdown that could delay Social Security payments, shutter national parks, museums and monuments and furlough hundreds of thousands of employees, Sept. 30, 2013. The Senate flatly rejected a House of Representatives proposal to keep the government funded through Dec. 15 but delay implementation of the contentious federal health care law. (Olivier Douliery/Abaca Press/MCT)

Tax reform, White House examination of the North American Free Trade Agreement (NAFTA) and the state of the nationwide opioid epidemic were three topics of concern discussed in a recent interview by the Voice with U.S. Rep. Darin LaHood, R-Dunlap.

Tax reform has come to a simmer in the House of Representatives with much focus being placed on who exactly will benefit the most — or at all — from certain provisions being worked out as legislation progresses. LaHood told the Voice on Tuesday that his interests with the tax reform legislation lie in what it means for working families, business owners and corporations. While there has been significant speculation and accusations regarding tax relief for corporations, LaHood pointed out that the United States has the highest corporate tax rates among the top nations and significant reform has not been dealt since 1986.

LaHood addressed some of the concerns by those worried that corporations would take advantage of the tax breaks and then not deliver on economic reinvestment by stressing that there are measures to be implemented in the legislation that would specify corporations who receive such tax breaks would need to reinvest that money in equipment upgrades, construction and job growth.

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“The main goal is to bring tax relief to middle class folks and people who have been working hard for the past 10, 15, 20 years and have seen no results,” LaHood said.

“Living in Illinois, both state and federal taxes are some of the highest in not only our country, but in the world when it comes to the tax rate.”

LaHood said the second part of that is looking at ways to jump-start the economy in the way of growing jobs and economic opportunities. With the jump-start, LaHood said there are C-corps and S-corps. The rate for those corporations is at 36-40 percent. LaHood said the suggested reforms brings the rate down to 25 percent. For larger corporations such as Pella, Caterpillar or ADM, the rate would be brought down to 20 percent.

“The thought behind that is the money goes back into hiring more people, better wages; reinvesting in the company. Maybe they buy a new truck or piece of equipment…that’s money that goes back into the economy. Under the eight years of Obama, we never had one year with a growth rate over 1.8 percent. It was anywhere from 1.2 to 1.8. Right now we are on track this year to have 3 percent growth, maybe more. Having that tax reform will get us to an economic growth rate of 3 or 4 percent and have that consistently … and that helps all of us.”

The other part regarding larger corporations is repatriation. LaHood acknowledged that many corporations hold their funds overseas due to the high tax rate in the United United States. He noted corporate tax rates at 14 percent in Ireland, 17 percent in England and 22 percent in Canada.

“We are the highest in the industrialized world at 36 percent,” he said.

“With repatriation we can get some of that $2.5 trillion that corporations are holding overseas.” He noted Caterpillar, John Deere, State Farm and Apple Computers as being some of the companies holding money overseas.

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“It brings some of that money back if we can get it at 20 percent. Because, right now, why wouldn’t you park it in some of those other countries?”

LaHood said there is a provision in the repatriation part of the plan regarding how repatriated money is spent.

“That money doesn’t go to buy you a new jet. It doesn’t go to redecorate your office. It goes to reinvestment in the company,” LaHood said.

“That’s a broad definition, but…buy new equipment, build a new plant. Figure out a way to expand your business…Some will go to dividends too, but that goes back to the economy.”

National debt also needs to be reduced, and the last time the debt was reduced to zero was when the economic growth was at 4 percent.

“Now the amount of debt was much lower at that time,” LaHood said. “When we figure out where we want to spend money, infrastructure is important, defense spending, higher education here at Western Illinois University…research. It’s hard to spend money when you’re $20 trillion in debt. So…we think comprehensive tax reform does a few things. It brings down debt, gets more people working; more people paying taxes. But also bringing relief to middle class folks.”

LaHood said another reform is to increase the child tax deduction.

“So again, this is something we want to do for middle class folks who have done everything we’ve asked them to do. The more money people can put in their pockets to spend on their families; their future than give it to the government is better for all of us. If you give people their money and let them spend it how they want to spend it, it has a ripple effect throughout the whole community. Tax reform has shown that in the past. The Democrats like to make a class warfare thing out of this. They’re going to continue to do that. But if you look at the tax cuts made in 1986…the ones we are doing today are some of the same ones supported back then. If you look, Joe Biden supported them; so did John Kerry and Al Gore. All of them Democrats who supported the Reagan tax cuts.”

LaHood compares the current opioid addiction and overdose epidemic with the Illinois state high in drunk driving 20 years ago. In addition, he sees matters as getting worse even in the wake of Congress’ allocation of millions to fight problem.

“Last year, Congress passed a measure allocating $600 million to states and localities for the opioid crisis…but it’s not enough,” he said. “We have to continue to raise awareness and figure out what’s worked in different states. Try to replicate that at the federal level, and raise awareness at every level. I think the opioid crisis, in a lot of ways, is like the drunk driving problem was in Illinois 20 years ago. It was a huge problem…a lot of deaths. We were the highest in the country. I don’t necessarily think this is a solution that comes from D.C…but it’s going to be more organic and local in terms of solving the problem. One of the biggest drivers of bringing down drunk driving in Illinois was Mothers Against Drunk Driving (MADD). They got together and in an organic way raised that issue. Now they’re synonymous with changing that culture. But there has to be a number of ways to look at that.”

LaHood also stresses that they way to deal with the issue is not through knee-jerk incarceration of people who are dealing with substance dependency.

“We cannot warehouse people in prison for nonviolent drug offenses,” he explained. “I’m not supportive of that, and I spent 10 years as a state and federal prosecutor. I put a lot of those people in prison. I’m not proud of that. But you can’t warehouse people for nonviolent offenses. Many of the people in opioid and heroin issues are nonviolent. But we have to figure how to get people the treatment and recovery services they need. That costs money. But that’s part of the bill we passed.”

LaHood said law enforcement has to also have support and resources to stem the flow of heroin and cheap opioids coming across our southern border.

“Heroin used to come from overseas from places like Afghanistan and Pakistan. Now it comes from Mexico,” he said. “The other aspect is going after doctors who overprescribe Percocet, Vicodin, OxyContin…give you a big jar of it and don’t think of the consequences or how powerful these drugs are. They have to be held accountable. We don’t have that in our system now, but it needs to be part of this too. The last part is Narcan (opioid counteractive). Narcan has to be with every first responder to help people. It’s a combination of things, but we cannot let up. This is an issue that continues to get worse and worse.”

Such scrutiny has been placed on the controls between doctors and the pharmaceutical industry that U.S. Rep. Tom Marino, R-Penn., withdrew his nomination on Tuesday for becoming the nation’s drug czar following a damaging report by “60 Minutes” that was quickly pursued by a number of other major media outlets.

Although LaHood had not yet seen the “60 Minutes” report at the time of his morning interview with the Voice, he expressed satisfaction with New Jersey Gov. Chris Christie heading up the president’s opioid task force.

“They’ve done a lot of good work, raising awareness,” he said. “They’ve done a lot of work in New Hampshire where the president ran. (The president) has talked about how he has spoken with families impacted by this epidemic. As I travel around my district, I’ve found this is something that has transcended socio-economic backgrounds…it doesn’t matter if you’re rich, poor, middle class…everyone is affected. It’s regardless of your race, gender, ethnicity…rural and urban.”

Recently, concern has risen over the status of the North American Free Trade Agreement (NAFTA) and the potential impact to the region’s agriculture-based economy.

“An area where I’ve disagreed with the president and his team on is trade. I’m not supportive of ripping up NAFTA. I think it’s a great mistake to change NAFTA significantly or rip it up. There would be grave consequences to our economy and our rural communities,” LaHood said.

He noted there are areas on the fringes with Mexico and Canada that can be examined. Until recently, Mexico was the No. 1 buyer of U.S. corn. As a result of the Trump administration’s stance on NAFTA — which has been to construct a whole new trade agreement — Mexico has met with Brazil and Argentina to provide the bulk of its corn. Earlier this year, Mexico has started buying from Brazil after previously importing 98 percent of its corn from the U.S., according to media reports from Reuters and the LA Times. Data from U.S. Department of Agriculture shows there has been a decrease in the amount of U.S. corn bought by Mexico, Korea, China and others among our Top 5 ag export partners. The data also shows that Mexico’s corn purchase accounts for nearly half of that bought by the Top 5 countries.

“Are there industries or entities that didn’t exist 35 years ago that need to be look at now? Fine. The core of the agriculture and commodities trade within NAFTA has worked extremely well for our farmers in central and west-central Illinois,” LaHood said.

“If the president wants to make a statement and set a marker out there for negotiations, that’s fine, but we need to do no harm. The other part is, I was a supporter of the Trans Pacific Partnership (TPP). We have to create more markets for our commodities. Right now, our country makes up 4.5 percent of the world’s population. So we have to have markets.”

He pinpointed that the country relies heavily on its inland waterways. According to LaHood, loading corn and soybeans on barges to the gulf and then sending it out through the new Panama Canal is the cheapest, most efficient way to ship it around the world.

“But, we have to have markets to sell it, whether that’s India or Vietnam. Without the TPP, what is going to replace it? The president has talked about bi-lateral trade agreements. I’ve been encouraging the administration to show us the template or platform for how we will do bi-lateral trade.”

With the increased market demand comes funding for infrastructure improvements to transportation systems such as the locks and dams, many of which have considerable age and have become inefficient.

“Countries are now looking to China to fill that void instead of the United States. China is going to continue to benefit from that the longer we go without concrete trade agreements. I continue to encourage the president to engage the international community in bi-lateral trade agreements. For our area trade equals jobs and economic opportunities. Our ag economy has become stagnant because prices have been low. You raise prices by having more markets to send our goods. Our commodities…our products…will win out over Brazil, Russia or any other country around the world. But, we have to have the opportunity to send them there in a fair and even-handed way.”

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