Taxpayer Empowerment Ep. 34| What Washington, D.C. Can Learn From Texas w/ Rep. Roger Williams

[00:00:05][music] Welcome to another episode of Taxper Empowerment. I'm Jose Melendez with the Texas Public Policy Foundation. Today we're going to talk about small businesses, the economy down here in Texas. You know, Texas has been recognized as one of the best places to live in America. We've done things right and it's due to low regulation, low taxes here in Texas. Today we're joined by Congressman Roger Williams who chairs the House Small Business Committee in uh DC. Uh today we're going to discuss what we can what Washington can learn from Texas, what challenges small businesses are facing today, and what policies can help taxpayers. So, Congressman Williams, welcome to the show.

[00:00:46]>> Thank you, Jose. Good to be on here. And I was talking before you started, this is about third or fourth time I've been on your show, even going back to my days as Secretary of State. So you guys have made an impact in Texas, I'll tell you.

[00:00:58]>> That's wonderful to hear and thank you for your leadership and your service to the great state of Texas.

[00:01:02]>> Yes, sir.

[00:01:04]>> So why don't we kick things off? You know, before serving in Congress, you mentioned you've helped you were Secretary of State, but you also built businesses. You ran a cattle ranch, so you know these experiences firsthand. Uh what shaped the way you think about taxes, the economy, and what's the proper role of government in all this?

[00:01:22]Well, the proper role of government is less government. Quite frankly, I've said all along if the government would collect my taxes, defend my borders, and help me with infrastructure and then get out of the way, it'd be perfect for entrepreneurship and competition and risk and reward, all the things that build our main street America. And you know, we remind ourselves the government can create a job, but the government can't create net worth. And that's the private sector does. So, and we understand that in Texas, and frankly, the government could take a lot, federal government could learn a lot from the state of Texas. Uh but I think primarily you know we got a great economy. The big beautiful bill has helped the making tax cuts permanent. Regulations frank reducing regulations in the big bill have saved community banks. Community banks were overregulated. They were having to sell. They were leaving. They had a hard time making loans. Sometimes didn't make a loan because it was more advantageous not to make it than make it. And small businesses are really hurt. But regulations have opened that up now and that's a huge deal. And then 100% expensing uh is great for manufacturing and great for uh expanding your business. And so many people are expanding in Texas right now. They're able to take advantage of the 100% expensing and build their businesses.

[00:02:29]And then you know we talk about losing the family farm but we raise the inheritance threshold from 15 to 30 million which really saves a lot of family businesses which saves more employees, creates more jobs. So there's a lot happening federally, but the big beautiful bill has trickled down into Texas and Texas leading the way on showing out America how to take advantage of less government and create more and more opportunity because the greatest asset we have in America is not America, it's Americans. We got the greatest workers and now we're able to take advantage of them. And plus, I will say this, Texas always leads because of no personal property tax in the state of Texas. is huge for people and more and more people are rent making more and more money and they need to pay fewer taxes so they can invest it and expand.

[00:03:12]>> That's absolutely right. So let's stay there and that dynamic. Texas has become a national model for businesses and really for families that are leaving higher tax states. Uh so to that end what has Texas done right that DC can learn from? Well, I think the uh uh of course no personal income tax is a state issue, but they've done that. But we've we continue to cut taxes. We cut regulations. Uh we give more opportunity for people to start a business. I mean, there's more more business startups in Texas than ever before and across the nation. We lead in that. I oversee the SBA as chairman of the small business committee and we see SBA loans up about 75% over the last 18 months. Uh so Texas is leading the way. Texas creates opportunity. Texas is friendly. Texas will make a deal. That's important because you got to not every, you know, we make deals all the time. And I remember when I chaired the governor's economic development uh arm. Uh we went all over the country going to states making deals selling Texas to America.

[00:04:15]There's no one deal fits all sizes.

[00:04:17]Everything is different. So the governor and people in Texas leadership have learned that make a deal. Do what's right. Does it create jobs? Is it going to help the economy? Is it going to let people take risk and get reward and own their business? And you answer yes to all those questions in Texas. Plus, needless to say, the weather we got, we got ports, we got planes. We sit in a perfect spot to do do great things here next couple years.

[00:04:42]>> You mentioned income taxes. You know, Texas enjoys uh you know, no income tax, but let let's stay on that subject. So, Mr. Chairman, what's one tax or economic policy that you see that Congress can accomplish by the end of this session that would make the biggest difference for taxpayers back home?

[00:05:01]>> Yeah, I think one of the big one big things to do is cut the capital gains tax down to zero. I mean, that's double taxation. And there's so much business going back and forth. the lower you the the less you make the capital gains tax, the more more businesses, the more deals you create because people pay fewer taxes and they're able to put that back in in their business and another business and hire people to put people to work. So I think doing away the uh you know that tax, the capital gains tax, I would like to see it be zero is something that we could do should do and create a lot of business across our country. So, as chairman of the uh House Business Committee or Small Business Committee, you led efforts to recover billions lost to fraudulent pandemic loans, why is recovering those tax dollars so important and such a priority? And what progress has Congress made to that end?

[00:05:49]>> Well, first of all, we've uh the money that's been stolen and and and we can't find up here is the taxpayers's money.

[00:05:56]And actually, if you're a taxpayer, the government has a receivable payable to you. When I first came on board and we had an audit of the SBA, uh, we found $220 billion missing out of COVID funding. We found $79 billion missing out of idol loans that were made by the federal government. And that's the people's money and the Democrats were just going to write it off. I asked the head of the SBA at the time, she just going to write it off. Well, you can't do that. That that's money belongs to us. So, we created a program. We basically put America on commission. it scores positively where if you can uncover some of this money that was taken by foreign nationals and sent to the wrong people that lied about who they were, you can bring bring it back to Treasury and and and get a percent of that money back. Uh and uh you know, as far as the $79 billion in idol loans missing, these are all loans that were three 3% loans, no guarantees. I want to uh uh I want to take that money at 79 billion, factor it like a receivable like businesses do to get cash. We at a discount and I think we can get it factored around 90% discount. If you do that, that's $7.9 billion that we can put back into Main Street, put it to use, create more jobs, create more net worth.

[00:07:09]>> Absolutely. You know, when it comes to government waste, you know, we can find government waste at any level of government, whether it's local, state, or federal. But Americans hear a lot about this issue. Where do you think Congress can realistically save taxpayer dollars without reducing essential services?

[00:07:26]>> Well, I think we need to take the taxpayer dollars and spend them appropriately. They need to go where they're designed to go. Uh, and sometimes we get away from that. But, you know, you got two things when you run a business. You can save a profit or you can generate a profit. Uh, you can only save a profit for so long. You got to generate. And we need to we have more taxpayers money coming through the coffers now than we've ever had before.

[00:07:50]But we also have more spending. And we're going to have to concentrate on more cash coming through and then lock the spending down. We don't want to show slow the uh slow the taxpayers dollars dollars coming because we have more dollars because we cut taxes. When you cut taxes, you create more income. You create more opportunity. So it gets back to uh uh the debt and we're spending more than than we're generating. We need to focus on that and get it back down if we can to zero. That would be fantastic.

[00:08:20]And uh and use real money for real things for American people and not uh just hand it out and not know who we're handing it to or foreign nationals getting it or letting foreign nationals own our property. Uh and we need to stop all that.

[00:08:34]>> Earlier in the conversation, you mentioned the one big beautiful bill. uh you helped pass the tax cuts and jobs act which and and then it and you made the pitch to makes the make those tax cuts permanent on the one big beautiful bill and the argument you made was that the Trump tax cuts needed to be permanent to give businesses certainty.

[00:08:55]Why do you think predict predictability matters just as much as lowering those tax rates?

[00:09:00]>> You got to know you got predictability is important because you got to know if you make a dollar, how much you going to spend of that dollar, how much you're going to have left. uh and and that's just simple mathematics and uh I think that's where we're heading and by making it permanent people know now know what to expect on taxes from income to inheritance to capital gains or whatever and you can and you can plan when you know what's what's going to be what the rules of the game are. If you don't know the rules of the game it's hard to know when to bring the pitcher in, when to take him out. The other team have nine men, 10 men, what is it? We need to know how to play the game. When we play the game, we play it as good as anybody in the world because we are the world economy.

[00:09:38]>> Absolutely. A lot of business owners will tell you that regulations matter just as much as taxes. So to that end, what are some regulatory reforms that would make the biggest difference for Texas entrepreneurs right this moment?

[00:09:53]>> Well, I think we can actually quit trying to scare businesses. One of the things we did in financial services was practically reduce the CFPB to nothing.

[00:10:01]the Consumer Financial Protection Bureau that was going in uh taking banks uh having talking about things banks weren't doing right here and there, fines, people were scared to death. That kind of heavy-handedness we need to do away with so people can can wheel and deal if you want to say that. The truth of the matter is what we need to do is we need to create more competition.

[00:10:23]Competition brings prices down, it brings services up and it gives opportunities to everybody. At the end of the day, when you compete, the one who is the the the the result of is the consumer gets better service. And I think we take uh uh that away and let competition drive the economy, uh we're going to be in great shape.

[00:10:44]>> Excellent. Uh you repeatedly fought to repeal the federal estate tax. Why is protecting this, you know, family-owned businesses and ranches so important, particularly in a state like Texas?

[00:10:55]>> Well, because you have fourth and fifth generation businesses. is the gener the business I have now. It's been in business almost since 1939. It's got the third generation in it. But we had inheritance taxes. Another unfair tax that should be zero. Uh but we were, as we know, we lost people because they inherited a business or a piece of land that on tremendous high in value, but they didn't have the cash to pay the taxes. So they lose their family farm or they lose their family business. By going from 15 million threshold to $30 million threshold, you just about pick up most of the people that can keep their business and not have to worry about having to sell it. The inheritance tax, most unfair tax there is and along with the capital gains tax and we've done a lot to do away with it. It should be zero. Also, people shouldn't be penalized for inheriting a good business or a piece of property.

[00:11:46]You've introduced legislation to prevent individuals convicted of SBA fraud from receiving future government assistance.

[00:11:54]Why is accountability so important when it comes to protecting these taxpayer dollars?

[00:11:59]>> Well, you know, if if not everybody's going to be worthy of an SBA and uh you know, people that are not citizens and felons, etc. are not those that we want to do business with right now. And if you're going to protect dollars, you need to do it. You need to do business with people that you trust and have faith in that can pay their debts back or generate a job or create an income.

[00:12:21]So that's the right thing to do and we're going to hold to it.

[00:12:26]>> As you know, uh, chairman, the World Cup is here in the United States. Uh, I recently attended a game up in Dallas, uh, when the World Cup started. And so one thing we've noticed is that people are starting to learn about parts of America that they hadn't previously visited, especially in Texas. They're going to barbecue. They're going to the stockyards in Fort Worth. Uh and so this is creating a lot of economic opportunities for small businesses in the state of Texas. What kind of impact do you think the World Cup has had on these small businesses and their local communities?

[00:12:58]>> Well, it's had a huge impact. In my district alone, we have a we have a a Cowboy stadium in my district, and that's where several of the games have been played. But I've noticed that, you know, big crowds excited about America.

[00:13:11]They're spending money. Tier one, tier two, tier three businesses that are in the areas are generating extra sales.

[00:13:19]So, I think it's been really good for uh for the economy. Hotel sales are up. I saw a number the other day in Dallas, $660 million dollars coming through uh certain areas that brand new dollars that people wouldn't have seen otherwise. So, anytime you can showcase the greatest state in America, one of the greatest cities, uh you're going to be it's going to be a winner and we've been able to do that and there's still more games to be played.

[00:13:45]>> So, let's take to let's stick to the greatest state in America. If you were to talk to a young Texan about starting a new business, what advice would you give to them and how can government make that path easier?

[00:13:58]>> Well, I don't know. Government can make the path easier by cutting taxes even more. That's how it makes it easier because it creates more cash flow. But I would tell I would tell a young man to depend on what his business is. But not I always tell these young people that cash flow is better than cash. So, if you can get cash flow going and invest in and and and let it grow, that's a that's a good thing. But advertise uh uh where you are that you can that you are in Texas and things are bigger and better in Texas. And I think people realize that Texas is a place to be to start a job. And you know, we have great banking laws now. We have strong local governments. We're not in debt. Uh so Texas can do some things other states can't. You can't go wrong coming to Texas. And I used to say when I was head economic development, Texas isn't wide open for business or Texas isn't open for business. Texas is wide open for business. And that holds true today.

[00:14:54]>> Absolutely. So as a final question, as Congress is heading towards the end of the year, what are some of your top priorities to strengthen the Texas economy and really giving taxpayers more certainty in the future?

[00:15:06]Well, I tell you the thing that helps everybody, but Texas again because we're talking about great entrepreneurship is we need permanency on a lot of issues, but we did it with the big bad with the big beautiful bill with locking in taxes, regulations. This 100% expensing thing is huge. Uh, and you know, the other thing we need to do, we have in Texas, we're doing better, is we're creating uh jobs for those young kids that maybe be dropping out of school in the ninth grade. instead of dropping out of school, they're learning to be plumbers, welders, carpenters, and we're doing a lot about that with the trade schools. And Texas needs to be a supplier of those kind of jobs to America. So, those are kind of things we're we're doing, but the main thing is let Texans have more of their money.

[00:15:48]They will make more money with it and create more taxpayers, more taxes for Texas.

[00:15:53]>> Absolutely. Chairman Williams, thank you for your leadership. Thank you for your service, and really, thank you for being such a great ambassador for the state of Texas and our nation's capital.

[00:16:02]Thank you. God bless.

[00:16:03]>> Absolutely. That'll do it for this episode of Taxpayer Empowerment. We'll see you next time.

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