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Rep. Kevin Brady on unifying GOP on tax reform

FOX News Sunday

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Washington, November 12, 2017 | comments

CLICK HERE to watch the video of Chairman Kevin Brady on FOX News Sunday.

Transcript from FOX News.

WALLACE: Now to the push by Republicans to pass tax reform. Both chambers take up separate proposals this week that have big differences, while the House appears on track to pass its version, the process is just beginning in the Senate. If the goal is to get on the same page and send a compromise to the president by Christmas.

Joining me now from Texas, Congressman Kevin Brady, chair of the House Ways and Means Committee that passed its tax plan this week.

Chairman, the biggest difference between the House and Senate tax plan seems to be over the question of deducting state and local taxes.

Let's drill down on this, your bill lets people deduct $10,000 in property taxes on their federal returns. The Senate plans kills all the deductions for state and local taxes.

And Senate Democratic leader Chuck Schumer says that if they eliminate those state and local taxes, it could cost Republicans the House in 2018. Here he is.

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER, D-NY, SENATE MINORITY LEADER: I say to every one of my Republican colleagues in the House who come from a suburban district, this bill could be your political doom.

(END VIDEO CLIP)

WALLACE: Chairman, you've got more than two dozen Republican congressman from high tax states. Can you guarantee them -- because they are threatening to vote against an elimination of all the state and local tax deductions, can you guarantee them that the final bill they vote on will not include the total elimination in the Senate plan?

REP. KEVIN BRADY (R-TX), CHAIR, WAYS AND MEANS COMMITTEE: Yes -- well, I can. And here's why, because we want people to get more of what they aren't regardless of where they live, including in these high tax states. That's why we keep the home mortgage deduction, we keep the charitable deduction. We restore $10,000 of the property tax deduction, which is twice the national average, but we didn't stop there for these states.

So, the way we set the income brackets, we created this new family tax credit that is eligible for families up to $230,000 of income, and we restored the state and local property tax deduction.

WALLACE: I understand that --

BRADY: So, the combination of all of these gets the job done for these families.

WALLACE: But, Chairman, how can you guarantee House members from blue states that the Senate plan, the total elimination will not be in the final bill?

BRADY: Look, I’m convinced that this is where we will end up because this is -- it’s important, again, as I told you, Chris, make sure people keep more of what they earn, even in these high tax states. And so, what we are working toward, and what we work so carefully with, our lawmakers from New York and California, New Jersey, is to make sure we deliver this relief, and I’m committed to it.

WALLACE: So, are you saying then that the House will not accept a total elimination, that that just won't fly even if the Senate passes it?

BRADY: That's what I’m saying.

WALLACE: Good, thank you.

I want to go through some other big differences between the House and Senate plans. They are technical but they are important, as you well know, to every individual taxpayer. For wealthy people and businesses, your bill, the House Republican bill, repeals the estate tax over six years and cuts the corporate rate to 20 percent right away. The Senate plan delays that corporate rate cut a year, and does not repeal the estate tax ever.

But with the money that the Senate plan saves, while you eliminate the deductions for medical expenses and student loans, the Senate would allow people to keep taking those deductions. My question is, isn't the Senate plan better for the middle class taxpayer than your plan is?

BRADY: Yes, I don't believe so. But here's the point. I think I know that everyone is stressing the differences. There are some. But there’s far more common ground.

And in this regard, look, on the death tax, I’m just convinced this is the number one reason our family owned farms and businesses aren't passed down to the next generation. Having Washington swoop in and take almost half of what you've earned over your lifetime over certain amount is just wrong, and getting rid of it creates 140,000 new American jobs because our local businesses aren't hindered by it.

And so, I’m convinced it needs to go, I also believe we delivered dramatic middle class tax relief all up and down that area, especially for suburbs and rural communities that I represent.

WALLACE: But, Chairman Brady, I want to show you two independent analyses that seem to contradict what you just said. "The New York Times" says under your plan, about one-third of middle class families will get a tax increase, not a tax cut, next year. And the bipartisan Joint Committee on Taxation, this is bipartisan, as I say, it says that 8.3 percent of all taxpayers will get a tax increase in 2019.

In both cases, Chairman Brady, these analyses say that middle-class families under your plan, some of them, millions of them will get a tax increase, not a tax cut.

BRADY: So, here is where I strongly disagree. I believe there is tax relief all up and down the income level for families, regardless of what they earn. And Joint Committee on Taxation confirmed every income bracket sees a tax relief.

And as far as "The New York Times" analysis, look, they are describing an America that doesn't exist. One where the economy never grows, and one where your paycheck stay stagnant no matter what happens. We know that's not the real world, both from the John F. Kennedy proposed tax cuts and from the Reagan tax cuts as well.

When you get the tax code right, where our local businesses can compete and win anywhere in world, when Washington takes less of what you earn, the economy does grow and paychecks do grow. And so, I strongly disagree with analysis by "The New York Times".

WALLACE: But would you agree -- and you’re exactly right that in all of these analyses, if you take each tax bracket, there is a net tax cut. But would you agree that there are going to be a sizable number of middle-class families, families that for instance now get the state and local tax deductions, families that have big medical expenses they can deduct, families that are deducting the interest for their student loans, that there are a lot of those families that could actually be losers in this bill?

BRADY: See, I don't, Chris, and here's why -- look, we are both taxing less, we are eliminating a lot of these deductions so we can lower the tax rates for every American, but we’re not just stopping there. We’re talking about an economy that grows paychecks in a way that we haven't seen for really almost two decades if you think about it. And that’s what helps families the most. They are keeping more of what they earn, their paychecks are finally growing. This economy is finally moving again.

So, look, I firmly believe Americans are far better off under tax reform than they ever would sticking with this old messed up, outdated tax code.

WALLACE: I want to turn to a different aspect of this, sir. I talked with a number of top financial analysts this week, none of them said that having a tax cut -- a lot of them supported the idea of a tax cut, but none of them said that having a tax cut, a lot of them supported the idea of a tax cut, but none of them said that having a tax cut that will add one and a half trillion dollars to the national debt, which is what your plan does, that that’s good for the economy.

BRADY: Well, I tell you what, I disagree here. So, during the Obama administration, they would add one and a half trillion dollars of deficit every year. That was to grow Washington. We’re talking about the same amount spread out over a decade to grow the economy and grow jobs.

This is a good investment and, in fact, if we just grow the economy slightly over the last decade, slow growth, you would recoup the trillion dollars easily, and if we really get this economy moving, you recoup all of it, plus more. So, I will tell you the surest way to guarantee more deficits and more debt is just stick with the current tax code, stick with the current economy. I guarantee it won't be a good ending.

It's time to change and challenge the status quo in this tax code.

WALLACE: All right. Let's talk about the prospects for all of this, because that’s the bottom line. President Trump called into a meeting of Senate Democrats this week and he reportedly said this. He told them about the Senate plan: You’re going to like it, the Senate plan, a whole lot more than a House plan.

I don't have to remind you, because you lived through it, that after the House passed Obamacare repeal and replace, the president later said that he thought the plan was a little bit mean.

Aren't you asking some of your members to take what is a tough political vote when the president may, in the end, after they vote that and you pass it, walk away from the House plan and support the Senate plan?

BRADY: So, I don't believe he will, and here's why. His regular conversations with me tell me he likes the direction we’re going in a big way. We are writing towards that framework that the president, the House and Senate came together on earlier this fall.

He also know -- he also likes the fact not only are we delivering middle-class tax relief, for the first time, our local businesses are going to be able to compete and win anywhere in the world, and when they win, we will no longer tax them to bring their earnings back home to be reinvested in the United States of America. So, I’ll just tell you, I think we’re making significant changes in this tax code in a real positive way and this is what the president backs.

WALLACE: So, how do you explain? What you make of the president saying to Senate Democrats, I think you’ll like the Senate plan a lot more?

BRADY: Well, I know that's the Senate Democrats description of the call. All I can tell you is my conversation by telephone with the president are extremely positive and so, the House is going to take a major step, as it did this week in the Ways and Means Committee for the first time in 31 years to fix this messed up, broken tax code, and from there, it goes to the Senate. I have no doubt we’re going to find common ground and work out the differences.

WALLACE: All right. Let's get to the bottom line, will the House pass your tax plan, or the tax plan by Thanksgiving, as now scheduled, which is just 11 days away?

BRADY: I believe it will. I feel the strong support for this. We continue to make improvements every step of the way, but I will tell you what, our Republicans in the House know that it is time to deliver on this economy and grow these paychecks by getting rid of this current tax code, that's exactly what we’re going to do.

And, by the way, the American people, they are starved. They are starved for a new tax code, one that’s so simple and fair. Most Americans will be able to file using a simple postcard style system, where they are eager for that simplicity and that fairness.

WALLACE: Again, finally on that deadline, can you say that with 100 percent certainty, you’ll pass it before Thanksgiving?

BRADY: Look, that's our goal and that's what we’re on schedule to do. At the end of the day, what I want to do is deliver it to the president's desk by the end of the year. Not for Republicans, but for the American people.

WALLACE: Chairman Brady, thank you, and we will track progress on tax reform in the House next week.

BRADY: Thank you, Chris.



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