WASHINGTON, D.C. – U.S. Senator Martin Heinrich (D-N.M.), Ranking Member of the Joint Economic Committee, delivered the following statement at today’s hearing entitled “The Startup Slump: Can Tax Reform Help Revive Entrepreneurship?” Ranking Member Heinrich highlighted in his opening remarks that the Republican tax reform proposal overwhelmingly benefits the wealthiest individuals and corporations, not entrepreneurs or small businesses.

Below are his remarks as prepared for delivery:

Thank you Chairman Tiberi and thank you to our witnesses for being here today.

The tax reform debate is underway, and I’m happy our committee is taking this opportunity to examine the nation’s tax policy.  I agree that our tax code must be simpler for families and small businesses. 

Where we can promote policies that make sure that the tax code is working for working Americans, growing the economy, creating good paying jobs, and supporting families and communities across the country – I will be among the first to support it.

Unfortunately, the Republican starting point seems heavily focused on giving more tax-giveaways to large, multinational corporations and the wealthiest among us rather than on small businesses, rural entrepreneurs, and those communities still struggling to recover following the recession. 

There’s time to shift that focus and hearings like this one can help.

In New Mexico, small businesses make up more than 95 percent of all businesses and employ more than 55 percent of private-sector workers.

They are the heart and soul of our state’s economy.

They are companies like RiskSense in Albuquerque that helps firms assess and manage cyber security risk. 

Founded as a small business technology transfer from New Mexico Institute of Mining and Technology (NMT), the company now has 100 employees and earnings growing 50 percent annually.

It’s a great story and we need more of them.

At the national level, start-up activity has picked up in the past three years, but the share of startups has declined by almost half since the late 1970s.

New firms are increasingly concentrated in a few big cities and states.

One report found that just 20 counties were responsible for half of the net increase in new businesses from 2010 to 2014. 

And the share of startups created by veterans and in rural areas are both down in the past two decades.

There are a number of actions we should take to boost start-up activity, few of which have anything to do with the tax code.

It’s vital that we strengthen the basic economic foundation – more jobs, higher wages, and improved access to education and health care.

And we must lay the groundwork for start-up activity in rural areas. 

That means increasing access to capital, speeding the deployment of broadband in rural communities, and taking other steps to ensure that rural and tribal areas are able to compete when it comes to start-up activity.

We also should be clear about what will not help small firms. 

Large tax cuts for large, established companies do nothing for startups – which have little to no taxable income in those critical early years while working to get their business off the ground.

And it does little for small businesses in need of capital to grow – capital that has been shrinking and drying up since the recession.

As we’ve seen time and again, tax giveaways for large corporations and our highest-earners do nothing to help small businesses, rural communities, and working people get ahead. 

And it leaves fewer and fewer dollars to invest in roads, schools, entrepreneurs, and working families, compounding the challenges facing small cities and towns around the country. 

The primary goal of reform should be to use the levers we have to level the playing field.  One, because it’s the right thing to do.  And two, because every American should have the opportunity to turned their dream into a reality. 

A zipcode should not determine a child’s success or her chances of starting a business. 

The entrepreneurial spirit is alive and well from Las Cruces, New Mexico to Boston, Massachusetts.  It’s our job to make sure we give every American the same chance to succeed, no matter their background.

Two things we could do right now to boost our economy and put more money in the pockets of working families are expanding the earned income tax credit and strengthening the child tax credit.  

Our focus needs to be on creating better opportunities for the folks on Main Street, not delivering more tax breaks for bankers on Wall Street.

We have an opportunity this Congress to work together to craft a bipartisan tax reform package that promotes entrepreneurship, simplifies our tax code, and puts more money in the pockets of working people.

If we do that, we will give Main Street the boost it desperately needs.  I’m ready to get to work.

I look forward to the panel’s testimony.