Issues Remain On Tax Bill For Some House Republicans

Dec 5, 2017
Originally published on December 5, 2017 11:09 am
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DAVID GREENE, HOST:

Republican tax overhaul versions have passed in the Senate and House with almost unanimous Republican support - I say almost. In the House, 13 Republicans voted no. Twelve of them were from New Jersey, California or New York, and that is not a coincidence. Those states all have high tax rates. Under the current system, residents can deduct what they pay in state and local taxes. But the new tax bills cap those deductions, and that could leave many residents in those states paying more. Here's New York Governor Andrew Cuomo talking about the House bill.

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ANDREW CUOMO: As far as I'm concerned, this is President Trump saying drop dead to New Yorkers.

GREENE: All right. Congressman Dan Donovan is a Republican who represents Staten Island. He voted against the House bill, and he joins us on the line. Congressman, good morning.

DAN DONOVAN: It's good to be with you again. Thank you so much for having me.

GREENE: Well, it's good to have you back. I presume that you and Democratic Governor Cuomo do not always - are not always in lockstep. But do you agree with him here that President Trump is essentially telling your constituents to, quote, "drop dead?"

DONOVAN: No, I think the president is looking for tax reform. And the bill has to be paid for, and so they're looking for ways to pay for it. But I don't believe that eliminating the state and local tax deduction for hard-working, tax-paying New Yorkers is the way to pay for the bill. New Yorkers deserve the same tax relief that the rest of the country's going to get. And the bill in its current form now, as you pointed out, California, New Jersey, New York and Maryland, there's a - the Institute for Taxation and Economic Policy pointed out that these four states in the next 10 years under the current form of this bill will have a $16.7 billion tax increase while the rest of the country enjoys over $100 billion tax decrease. So the bill's being paid on the backs of the people that I represent. And that's why I voted no.

GREENE: Well, speaking of the people you represent, I mean, what would you tell a colleague from a lower-taxpaying state who would say, you know what? I'm not so worried about your constituents on Staten Island if they are paying high state and local taxes. You know, why don't you just take care of that problem and fight to lower their state and local taxes and not hold up a federal tax bill?

DONOVAN: Yeah, I think that that's something that we definitely have to work on. We are a high-tax state. In fact, you know, we're a donor state. New York, for every dollar they send down to Washington, only gets 79 cents of resources back. But you can't hold - you can't put that blame on the people or harm the people that I represent by saying, well, your state is taxed so high, so therefore, we're going to eliminate this, and maybe your government might give you the relief that you deserve. If we're going to give tax relief to Americans, to middle-class, hardworking people who just want to put food on their table, want to pay for their children's education, want to pay for their mortgage, we have to be fair and do this for all Americans.

Now, middle class in New York City, certainly, is probably a higher family income than maybe middle-class income in some other parts of our country. But it's still middle class in New York. It's not unusual for a firefighter, a schoolteacher, a nurse, a bus driver, a construction worker, a police officer making a combined income, a family of four, of making $200,000. That's middle class in New York City. Those people deserve the same tax relief because they're overburdened just like the rest of the country is.

GREENE: Well, you mentioned that you need to find some way to pay for this tax relief. I mean, there are concerns about the deficit ballooning. The Congressional Budget Office predicts these bills could increase the deficit by over a trillion dollars. So I guess my question is, if not this, then what? How would you propose to pay for these - this tax relief?

DONOVAN: I would propose paying for it where all Americans are paying for the tax cuts, not just people in four different states or four selected states.

GREENE: So what does that look like in terms of a bill? How would you write that in language?

DONOVAN: Well, yeah, I mean, you know, I'm not on the Ways and Means Committee, so I don't know how they calculated - or even the scoring of the bill on what needs to be paid for and how you'd pay for that. Lowering the tax rates - it's going to cause a deficit. Lowering the corporate rates is going to cause a deficit. There's economists who believe that when you do that, it stimulates the economy and the bill will pay for itself at some point. Down the line, it would cause economic stimulus. We'll have more jobs. People - corporations will remain here and hire more Americans. IBM recently told us that there are more employees of their company in India right now than there are in America. Well, that's really good to India, but it's not good for America.

GREENE: All right, Congressman, lots more to talk about - we'll have to leave it there. Dan Donovan represents Staten Island. Thanks for your time. Transcript provided by NPR, Copyright NPR.