« The Weeds

Tax reform special

2017-11-17

Tara Golshan and Dylan Scott join Matt to break down the two different GOP tax bills.

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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
We're on John has always runs hello. Welcome to another, so did the weeds on the box media. I cast network. I Matthew glaziers addressing me today. We have to start, and tar calls him up to great reporters from from capital Ella here to talk about. The tax reform story, which is receded into a bit of a bee plot line this week, as we ve had the cat
during excavate of worry, more I'll frank in some, some creepy photos and serious allegations, but but think this tax reform thing seems to be happening, which is a deal in Russia, a piece about that. We want to talk about to think that fact later, but but the house, the has passed a bill yesterday with manassa much drama writer yeah. They they passed it with may thirteen Republicans defecting so few remember from the health care drama, they can only lose twenty four issues. Votes on these kind of big ticket items and there wasn't a lot of drama or late in the game back and forth, will we are won't. We trump came the morning of the vote. They had a very positive meeting that did not talk a lot about tax reform. It seems like he tuck mostly, but his trip to Asia and then they went in and they voted for it, and I mean you know it,
the difference between thirteen, no votes and end twenty to know about it is that a huge number of people, but its it is telling, because often with a controversial issue, leadership will is called catching release. You know, and will like tell certain members like go ahead- vote against it on this. You know, if you need for your real action to like say you are against this thing. We don't need your vote on it and then some other time, though I come back to you and you know, like you, but with us here to the fact that there was a margin. You know it shows that there were members like members wanted to be on the record. Voting. Yes, for the spell you know if they were a half dozen people who were saying like hey Paul. You know this is really tough one for me. Can you give me a pass like he could have given them a pass but like they they wanted to vote for this. They are ex
did about tax reform one. There was nobody like trying. There are no like cohorts like there were in the health care debate where people were let China like band together and get leverage to change. The final package like this came thing came out two weeks ago, it's now been put on the house floor, like the official detailed legislative texts came out two weeks ago. It's already gone the house floor, and pass and as far as I can remember like, it wasn't really changed. All that, like there were some changes, but there weren't lake yet aren't we but there was none of the likely again. I all this Obamacare appeal debate show how have you all of this, but there was no light- can help the House Freedom Caucus in the moderates getting together and trying to figure out how to use their numbers to force leadership, to change the package to something more to their liking like there was just none of that, we saw a little bit of it at the beginning with the the New York New Jersey contingent. That was trying to get a little bit of a sweeter deal on the start, state and local deduction which we can talk about later. But
it was largely there's this sense in the house that is pushing them for that. We need the sun by the end of the year, and we can't be as picky on policy issue this time around, because Healthcare was such a massive, embarrassing disaster for us, so we say not a lot in the house, and I guess I mean the Senate passed its bill through the finance Committee last name right. So it's kind of going to this when I say motions, let's talk about and to what is this house bill do right because Paul Ryan he had, as is as pin tweet, was about how a typical family of four is gonna get attacks card of eleven hundred eighty two dollars, so you might think based on that tweet
that a typical family of four would get in tax cuts of eleven hundred eighty two dollars, because that's what Paul Ryan said, isn't really true the rights of the the way this legislation works. Is that you start this typical. It's it's a four percent family making. Fifty nine thousand dollars How Paul Ryan asked us to judge this? That's the national median income for person. Family is very sort of normative. Actually, most four percent families are. Richer than the national media, but you're not pull rank and pick the example family. He wants one eighteen, they do get an eleven hundred. Eighty two, our tax cat, then it we ninety in their tax or gets a little bit smaller, and that's because one change this bill makes is that the inflation indexing of the tax brackets gets a little bit ass. Sort of less generous ride so in the second year, get smaller in the third year get smaller in the fourth year,
smaller in the fifty year, get smaller, but then in the sixth year this family tax got goes away entirely. Because this new, so they created like a new tax credit that basically insurers. Everyone is gonna, get attacks cut, but that credit goes away, five years right, I've, so this typical family for but your six, paying saving more taxes than they are right now and then because of the change to inflation, indexing, their tax increase just sort of escalates year after year after year after year. So that's how the typical family for terrorism acted at the same time, if you are not so typical family of four that stands to inherit, say a fifty million dollar fortune you getting a big tax cuts. By does total repealed these state tax, that's what
two things about two three hundred billion dollars and in ten years and then big changes on the business. I write. Corporate tax goes from thirty five percent to twenty percent and passed through businesses wed sir, that's like if we have a partnership of the three of us where, like weeds, CO, LLC Am, and we get our income from that, rather than you know, being employees, we compare twenty five percent rate and that's like that's what the bill duds. Basically. disapproval of large business tax got there. I think that's that's. They made clear that that is their priority across both of the chambers at this point, like the only consistent thing from the very soon
the tax reform debate and in a way the most consistent thing between the house in the Senate plans as we need to cut the corporate tax rate from thirty five percent to twenty percent and everything else is negotiable, but that is not, and inevitably because tax reform is about trade offs and you have to wait a figure out a way to pay for this. If you're not gonna mess around on the corporate side of the things that means are gonna have these, but gimlets, etc on individual side and importantly, Lily Sound, the house's so that muffler at the having peasant. I report the story the night before the vote, that there is this and of small contingent of conservatives. There were Alison looking at this math and saying: well maybe this is it the the the tax cut that Parana saying maybe is untrue, and maybe this method than working out and while, if arc, if our constituent see this and they feel their tax
cuts, are actually non existent and will be a limit screwed, but then ultimately, the kind of swallowed, all that and voted for it anyways. So it's it's again reasserting what I just said that the corporate tax can is really really what matters. The path to lower rate is really what matters and those are the top priority and its emits timed, I mean needs its word saying what I mean. The timing here is: will designed to serve help you get away with it right. If this bill passes, most people will see lower taxes the twenty Eightth MID terms, and they will see lower taxes, not that much lower, but somewhat lower at the twenty Twenty Donald Trump. We lacked right arm and even through to the twenty twenty two mid terms by then this it really gets day see four for a lot of people, but that the sort of real impact we using like a broad tax increase and individuals in order to pay for big tax cuts and business owners is in the long term trade
So, what's it to that extent, it's it's well designed, although there are several million, I mean of millions of people will see tax increases in the short run. Under the spell the cause of some of that summit, the pay for right, I think I've are former friend Jim tankers, lay at the New York Times, had a piece in the last couple weeks. That said, I think, like thirteen million households, would like immediately see their taxes go up over under this plan, which you know that, certainly not the majority, if the country, but thirteen million people seeing higher taxes. That's that's a lot of people, and I do wonder about the psychological and political impact mean everybody like prefers, paying less taxes to paying more taxes. I think, but there's something almost like shocking about of public administration, raising your taxes like that's like what. don't expect to see happen relic. I remember election day, like you know, I stuck in my wife and we were caught up said we weren't big Donald Trump Fans of Sequoia. You know list
that attacks like I've been looking at this bill and I think, like we're, not gonna get a tax, God we're gonna get taxes raised, and it's not. It's doesnt sit well with me yeah, it's I mean it's just a testament to how hard the math has been for it. That right well in something we ve talked about before but bears repeating in is that you know they ve. They ve made some very conscious choices that the people who are likely to face higher taxes live in democratically controlled states are probably democratic voters themselves and so like it does seem that there's a pretty raw political calculus that to achieve the trade off that we need to make the math work here. We're gonna target people who don't really vote for us, and you pay me
It's worth dwelling, unlike how aggressive this corporate red cut, is right because to go from thirty five to twenty is like that's it. That's a really be dropped right. If you went from thirty five to twenty eight right, you could still go to corporate Amerika and be like. We have cut your taxes like. Perhaps you would have liked a bigger tax cuts, but this is a task. You know, give us some credit and then the math becomes much easier right. It's like the the math is hard and force them into their stuff, but the methods came hard because they chose to say not just like were committed to a corporate tax cap or come into really big corporate tax. I confess I dont know. Is there any empirical reason than it needs to be twenty percent other than it's a nice clean number? They said there comparing at two european countries, ends at because I think, on average european Countries- ART twenty one percent- this
bring something like that. But I mean it's. A kind of our marine Republicans have always believed american social policy should be modeled after eliminating me that that is the reason that it is kind of arbitrary, because if you look at their been several reports of like how much corporations actually pay and right of what the rate is its lower than a lot of these european countries. Up, I mean have you need, regardless It does not it interesting to me, I mean so for you What would mean Romney one in twenty twelve red? He wanted to propose a corporate tax reform right where he was going to close loopholes and bring the weights now, but he didn't want to say he was gonna. Pay for corporate tax got by raising says I need rituals, because that's crazy, so keen evaded the math and they asserted that they could get it down to a twenty five percent rate. Via you know, reform and some people.
It was a political campaign there, like some people, said they were wrong about that other people defended them. That seems like a ball park of like what you really could you re like, according to Republicans and then sometime in the intervening for years they decided like they had to go lower than that, and that's that's how you get into this mass right that in twenty twelve, I think the wound me. I mean it's basically the same people right under the belief that low corporate income tax rate good, is not like a disagreement between Mitt, Romney and Paul Ryan, but they had it turned change of heart about like what's politically viable. The in terms of you know how low you can try to go, how you can try to pay for it. Absolutely we should. We should take a break and then let's talk about some of these pay force in the House bill and some of the politics at that
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people and states like California and New Jersey and a New York, which is kind of why you saw those were the the few defections from the bill of her arm. So what the house built does is that it completely repeals the income state and local tax reduction, and then it caps the proper, you said, a local tax deduction at ten thousand hours threat, which interesting about that to me is that it would then was first floated. It seemed like an effort to a p is New York, New Jersey members who have high property taxes. I mean also reasonably high income taxes, but then to just like really stuck over California, because California, because of Africa, but it's called pro do you know? I got a famous profit. Can I say anyway, there's something this property tax caps and California, so called
when is a blue stayed, but because of this initiative in the seventies, they can't raise property taxes that much say really high income taxes, wealth of other states, too This is like really is. A goods is bad for everyone who lives in blue states, but is especially bad for California, prosperity, property right, but the California members are voted for. They did and as I am having a piece forthcoming unlocks that call on their spent. It was something that we saw that they're they're fourteen Republicans from California, and only three of them, Voted against this tax bill, but where you you compare that two other states that are similarly being screwed over by this kind of policy like New York, where they have they have nine Republicans and say in five of them voted of the five Republicans in New Jersey. Four of them voted against it. So clearly, something's going on in california- and this bill is particularly bad for Californians because of what might set up on the income tax front and then
its confusing looking forward because a lot of them said well. We think the Senate is gonna. Make this bill batter well just spoke for it now, but the set its proposal completely repeals the city. Yeah dissenters, Wurzel is less a micro targeted at scoring over California, but is actually just this across the board works for residents of both states. my sense of what was going on in California, sort of two things one is that they some of the members there have sort of convinced themselves that you know, because the Republicans in California do tend to represent some of the more rule, part of the stadium where they're, lower and people make less money there. Or home values, because another thing that touches California is the changes to the mortgage tax deduction in some some of them seemed like had legitimately convince themselves that, while my specific constituents in my district will not be that adversely affected by this, and then the other part of it, that you can ignore is that the House Majority leader leader is Kevin Mccarthy, who was a California,
Republican and see seems to have done a very good job like there was some reporting in the Washington Post that he had very explicitly asked the cut the California contingent not to be out spoken about this bill into just sort of find a way to Yes, because the party needs a win any. There has to be very good at that sort. I mean that everything kindly thing we're here to discuss it, he's known as a very well like sky, brings a lot of money into the party. He is a very skilled political tacticians. I think he is making a lot of insurances of hail. We and the party will protect you and I think, looking at how these members voted. That seem to be compelling enough re, but I mean if, if like, if you think about how Congress traditionally worked like the democratic years Rosa, that seems true, if you want to know like wide California members get behind this. That is why, but in like traditional understanding of Congress, that's like a backwards explanation right if this crucial number two guy and how's, whose a major fundraiser really well liked in the car
This is from California that ought to explain why house Republicans won't go for a measure that is designed to destroy California foresees work. I mean you. Can you can talk yourself into this idea that, like ok, you know I'm Mimi Rogers, my district is inland its it about the national median income home prices more expensive, the national average, but not that much more expensive. So this hasn't touch me that much, but people who live in California read they are residents of the state of California. The situation in the state budget impacts right right in the overall economy of California impacts that right and they are not going to be well served by a plan that, like hammers their vote.
Finances, mean how exactly that cash out for them. You know only time will tell whether sunken me good, but you go because the internal politics of California are the opposite of the politics of the Post republican caucus right when California state Legislature needs to screw someone over because they got screwed over they're, not gonna, say well Paul Ryan's intention was to make people living in big coastal cities pay the price for this, so will allocate the budget to make sure that Nancy policies constituents feel the pain it's gonna the opposite right. The leaders in the state legislature in somebody's gotta take it on the chin and it's gonna, be the people live in the republican areas, so now. Don't you know, I mean it's like a the other things here. It just goes to show that they like they really think this corporate tax cut is a good idea. It's everything yeah,
right. So why so? Why? What else we have read? So are you people talking about so Phd candidates and pay higher taxes? Grad school, oh yeah? They just eliminates exhort if they do, they do a much better job than this they'll does, which I know will get to of actually eliminating a lot of deductions, which is supposed to be the whole goal of simplifying the tax code and say you have stuff that touches Phd candidates in graduate students, you of your. They eliminates the deduction that allows people to deduct the if they have high medical costs, are allowed to deduct vat from their taxes, would it be allowed to under the House bill teacher is that its neighbours by school support, as I had. I had that yeah there's a lot of like hearts, heart string, the they are actually getting wet in the house plan, but it does. It is hard to know how seriously to take that, because the Senate than backtracked on all of this and so
to see. As I mean this, but the house I mean, if we, if we think about like so what we can. On the one hand it's like, oh my god, did the raising taxes on teachers who, by school supplies for there to be added into how horrible, rather silly, that's like that's like my god they're monsters, but then we stepped back, put put your one cat on and you like luck. Ok This sounds nice. You giving of a million little deductions that sound nice. But if you do every did action that sounds nice, then you have there's really complicated tax code waiting to be really high. The whole point of tax reform isn't like fuck, you teachers, but it's like. We need to simplify. We need to get away, down, but then what's ah abandons rice is it they haven't done like the eighties. Tax reform it eliminated and a lot of well liked tax expenditures, and then it lower tax rates so that a net
a tax break. There were winners and losers, but like a net taxes state the same and which must be more efficient and so forth, but here they're, eliminating all these deductions in order to eliminate the estate tax rate and to a big tax got four pass through businesses, so it sort of like The like naive, knee jerk take is a kind of right away. initially it seemed like. Maybe it wouldn't be right. In the end you mean the nature take in that lake. their eliminating these deductions and not cutting like middle class taxes. In order to in the corporate there and there they are eliminating these feel good things rat really in order to simplify the individual tax code, but just to like free up money for this pass through. It is like a caricature almost like what like Democrats would say. A republican Plan wants to do yeah, really they did it in time. They get really mad when you
but I mean that's what the other thing I mean you know. I don't know what you know we're world grownups here. Politics is what it is. I mean I do go back to this Paul Ryan PIN tweet. It would be interesting to me to have a situation which they were like Look. What we are doing is we are raising taxes on individuals in order to cut taxes on business owners and heirs to large estates, because we think that that's a good idea ran like point to some academic. There is some research that says this is a good idea that there is a
I agree that this will allow foreign investors will be like we gotta. We gotta get in the USA, where, like being an american business owner, is now really good and then we're gonna like build tons of factories and everyone is gonna, get higher pay and you know who's gonna care right. You, taxes went up three hundred dollars, but your wages went up four thousand dollars, so everybody wins right. I don't I mean I don't think that's right. I definitely not think as a winning political argument, but I mean, I think, that's the main. That's the huge problem, because it there are poles their election He percent of Americans think reparations, pay too much petty, let patriotic right jail. Yes, it pretty lemme see me, I will say I don't know if it's to their credit but like several rob several Republicans over the last week or so have sort of given away the game, which is that lake Yet we ve been through a year now of dislike constant tumult in Washington DC and the term presidency, and a republican Congress haven't really
If you're a republican donor, they haven't really done anything for you, I mean there's been some regulatory regulatory role back and you know don't mean they made here to import african elephants Terry saved her. There ve been things but like ie, if you're republican donor, in particular, like a corporate donor, you probably gave money to Republicans because you expected them to cut your taxes and if they can't do that and sort of like good, are they to you? And so you ve had several Republicans say over the last week the like, if we don't do this, we're just going to lose all of our corporate donor support and select that is sort of thee, even if sort of the broader popular politics of sea,
our kind of confounding to us like it seems like a very simple equation from their point of view that this is where, like the MAGIC of Fox NEWS, really comes into play, rather because, if shine Hannity tonight didn't episode about how a lot of white working class people signed up for Donald Trump populist campaign, because they really wanted to stick it to globalists and leads. But now actually Republicans are going to raise taxes on working class people in order to finance a corporate tax cuts and that the reason for that is that that's what rich business donors want them to do? let me be done right, like like the whole thing would evaporate in a minute and like this, a rationale for this all, but it's just it's like at its base, its built on the conviction that John Hannity and took her Carson and rush limber are gonna cover for
right, yeah, it's almost as if the alleged populism of certain pressure Hooligan Party is just a cover for achieving the ends of corporate, it's almost as if a cynical, let us say, let's take a break, a song about the Senate. Putting you looking for depend, political reporting, high quality storytelling with the latest and call for an entertainment magazines, We delivered all with high quality riding and beautiful photography, and now you get all your magazines in one place with text at the texture of gives you a moment it access over two hundred premium magazines- they got leading titles mean it's amazing, the list of her, So they have time the Atlantic New, Yorker, vanity, fair wired, but like really everything better homes and Gardens men's fitness MAC, world Entertainment weekly, like they ve, really brought together all the leading publishers
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As I said, a bill is different in the house built in a number of respects and at a bit like a critical difference, is just that the rules are deference lagoon kick it can I mean we ve talked about and the weeds bird were many times, but it is always important like so that the House bill is not compliant in the Senate. They have to write a bell, that's compliance of what is right and tar correct Verona near this- but so under the Senate, the Senate is using, what's called budget reconciliation to pass their tax plan and that allows the bill to advance with only fifty votes, and there are fifty two republican senators. With only republican votes instead of the usual sixty, which would mean you did democratic by it, but there certain conditions that come with using those special privileges under budget reconciliation, and there are two that are really important for the tax bill. One is under the budget resolution that the Senate Pass to set this whole process up. The tax bill can only increase the federal deficit over the next ten years. By one point, five trillion dollars- and we already saw away
with the house plan and I think the original Senate plan, like they just hit that mark exactly so it's gonna be really hard to make any sort of adjustments to address any objections that people have. The other piece of it is that you can increase the deficit by more than one point. Five in over ten years, and then after ten years, I'm here having year twelve or thirteen. You can increase the federal deficit at all right. That's where the House bill had a lot of problems, because all I think of its changes were permanent and it didn't seem like we think we knew that in year, eleven the House bill would increase the federal deficit and therefore not comply with the Senate the Senate Emmy something a little bit loss and all the news yesterday was the house possibility absolutely cannot pass the Senate basins, role of where we may not like? Oh, I won't fly, but I think if we want this to the floor, that's a point of order and then you'd have to get Democrats I'm wearing what they are so
basically a major problem for them and for the site as well, though they made made changes the Senate. Those who make it comply with the bird rule is that in the out years in year, eleven twelve and thirteen it would increase the deficit. and it can do that right and so now the Senate. It seems like the biggest change that and it has now made is that the corporate tax cuts are permanent. The individual tax cuts would sunset at the end of the decade to avoid this problem re aunt, yes, and they would reply the individual amended on Obamacare rights, which is a hand wait. There's consumers did these a bunch of changes, the individual tax code in the Senate side they all expire after ten years, except for one and that's the inflationary. Ok, you know the so the aspect of their reasons tax on individuals is permanent. Everything that would cut taxes and individuals is temporary,
And that's how you make it work and to mean then they also bring back personal exemptions. Yes, so that was running, I was repealed and they bring back after five, which is confusing, so I'll get through the individual mandate. That is an interesting one. There exists a funny court, Craig his wooden when this was first floated. I heard a lot of you They like the individual Mandy, like that's a tax that raises money. How does this help them? But this this like the Republicans, are right about this repealing. Virgil mandate does reduce the deficit. Yes, so the individual mandate for those who, I guess, having listened to the weeds before the individual. Randy is the requirement in the affordable care act that you either have health insurance or you pay a penalty in its by far the least popular part of the law. But it is also essential to making the law work, because if you're gonna that insurance companies can't discriminate against people with praise in conditions. Then you need to bring both healthy and sick people in
market and the way you bring healthy people and, as you say, well, you have to have insurance. Are you pay this penalty, and so weakens hated, it spend the foundation really of their opposition to Obama care from the start, So now the Senate has proposed repealing it and that does sort of, paradoxically save money, but the real, it saves money? Is the correct national budget office projects that about thirteen in fewer Americans would have health insurance years from now, if the individual mandate would repeal and that's through a common nation of both people wouldn't know verily sign up for Medicaid? If they there was no mandate, them to its also because you insurance premiums are going to go up in the individual insurance market, as healthy people start to drop out without a mandate and that's gonna drive prices up in a kind of creates, not a death spiral exact. That sort of many deaths spiral. That just means the insurance markets. Gonna get sicker, that's gonna, increase costs and that's gonna. Leave more people decide especially without a mandate that well it's not worth it for me to to haven't
and so if the federal government spending less money on Medicaid and money on the tax authorities that people get in the Obama care marketplaces than it does, and up saving money, but the right to long did a red is thirteen million fewer ensured means less cost the federal government and that's how it saves money. Nice ass, it yeah, that's it that's all so they can make me your God, so is awaited. What what else is different to? The one difference is that in the house you have some house members who are from blue state, So there was some kind of give on the mortgage issue and the salt issue in the Senate. It doesnt work like the Vienna summit. They fully repeal the state and local tax deduction which brings in a lot of money for them to make the corpse experts, but we did I mean within the ten year yet with rights I would like to have the ten year and they have the long dry ride. So they're they're harsher
on the blue states within the tenure window other than like everything else. It ends up in the vanishing in land. it's a bit. It's a bit of a weird one answer this. Anyone also, though, is easy. On some of these deductions, why they don't they don't just eliminate. Every right doesn't really go through all of this kind of pull your heart strings adoptions and take my kind just leaves those be right: the adoption tax, at its or tax deductions, so their medical expenses deduction is still their right to use the funds. That is they. They don't get to have their fake postcard yet in the in the Senate, you still can't you your taxes on on the postcode. So that's that's unfortunate for you. I guess, but it's the have and they also deal be state tax why'd. They increase the have a bigger state tax cuts, but it's not entirely limit red and that's because I guess my grounds sort of way Lee had said he didn't think it should be repealed entirely, as
and called gather arrest a fear that address you, don't like the optics of that you ve been went out from their comfortable, but I mean I sit in republican leadership. Has long been comfortable with writing bells? Susan Collins's involve risks, my grounds is someone who I heard them. My grounds objected to this. I had to google like who is MIKE this is like one. It is normally like, like a girl on get along, rightly give you write a bill that he's at act at about four but give a real you cry and trouble you're. So you know that that kind of stuff ready it seemed like from the heart of the Senate caucus didn't want to say that this was completely eliminating estate taxation, so they they double the exemptions right. So right now, and you can have your first five point- five million dollars, which is really eleven million dollars if you're married couple and their doubling
so this is like a great news for you. If your parents have you no fifteen to twenty million dollar fortune to to give to you, I'm not I'm not in that state, I'm gonna miss my sought. The ducks instead, but that's that's like about where they are, and so, where does this bill stand? Procedurally, so they just pass the Senate Finance Committee, which is that's like the big mark up that they have to go through, and that was when they introduced Sunsetting. All the individual tax reforms are not left and then it has to be, to the budget Committee and then to the fore, and so the idea is that they are going to vote on it the week after Thanksgiving. So very, very fast right there on recess next week and then they're gonna come back and do tat for
It all happened in the month of November, even like the introduction of the how right I think was November. Second yet, and so if the Senate keeps to their schedule, tax reform will basically have hat. Well, then, what will have more ran like the sum of the major powers? attacks from happening land where the members that were in tax form in eighty six. This is like, oh wow. What's going on that took two years in jail, you had a great quote from, I think Peter King of New York, one of the few House Republicans who did vote against the taxpayer, who was like in eighteen. Eighty six. This took two years in your house trusted in ten days. this. I remove it, and you know I will say I guess in defence of the right I mean they ve been. This has been worked on by particularly by house Republicans for longer than ten day is only one of the big differences in politics at twenty seventy from nineteen. Eighty six is that,
much less gets done now through the form all process in that committee is and much more gets done in a sort of leadership led process that people are involved with at Peter King. You know for better or for worse right, like Peter King didn't like make best friends with Kevin Brady two years ago and get on the little tax reform. Working group that put out the better way plan would have meant a measure that that would save him yeah, but it's
It's not like I haven't done work, it is, it hasn't been recorded. Committee vote with sweat like we took on previous weeds, is about the destination base. Cashflow tax idea like there was a whole process to which that was like floated and shot down. It's just I mean you might be challenging for, like future historians, right like you, can look through the records of the United States Congress in nineteen. Eighty five, eighty six and like see what they were doing, whereas now It's like you'd have to look at that news clipping swayed because these things happen they were considered and they changed, but they weren't like on the record and that kind of way here in the house came together in the last week. I'll close but behind closed doors in the ways and means comedian. Just Republicans. And yet you, as he said, like we're, getting leaks of things being floated, shot down and occasionally trumpet tweet something that
must have been floated and shot down and say it. I mean it's been incredibly fast and seems to have prevented any real like any real resistance from forming like. I think the fact that the house managed to pass the so easily is telling. I mean I do think in part. That's a reflection of you know. Taxes are made, harder to sort of demagogue and that the stakes are quite as this role as they were with health care. When you're talking about like life and death forces, are you gonna pay a couple hundred more dollars and taxes, or not go in there now, but healthcare is in there now, but I do say. I just think that, and then there also is just sort of lake Republicans wanted to repeal Obamacare, but like now that they fail to do that. They know they absolutely must cut taxes, or else like theirs a reason, as I think Linsey Graham said recently, there's no reason for them to be in the majority if they can't had taxes. So I think, or above the speed and the desperation as informing like our kind of feeding off with each other, and that's why I've? Suddenly it simply tax reforms,
but I mean it's important to note also that we are seeing some rumblings there's always RON Johnson and whose Yamaha the sun will be different sized very different. I mean it still think that the schedules and cry really fast and they're gone next week? So when they come back after Thanksgiving? It's going to be, you gonna have to watch very closely can I come speak out. I mean an interesting thing, though way did that I think would seem to out the Trump air is that things that are like bad for the Republican Party right like it turns out that you're sending nominee in Alabama was banned. From the gods did mall for sexual harassing teenagers or you're stay delegation gets wiped out in Virginia in off your elections, or it turns out that your national security adviser was secretly being paid by the turkish government to kidnap as someone from Pennsylvania did, that kind of stuff actually like
helps boost the legislative agenda there right. It's like it's, not like good news for Republicans, but there's only so much that like act, busy mine did. Liberals can be paying attention to at one time or another, and these other issues are more visceral and more, you know gives like can see it on chart beat or Sierra. cable or or whatever else and they d take. They divide people, attention. And meanwhile, this all this like trump antics, but like the bulk of republican members of Congress, are like plugging away at this policy agenda and when the spotlight is on. You know why more rather than or an hatch like that, just makes it easier to go ahead without answering a lot,
questions about like. Why are you doing a big unpopular corporate tax write? One they'd have gotten very definite sort of turning turning of any one of these stories sort of to their advantage when it comes to the policy agenda so like after the Virginia elections, Paul Ryan said, while this just shows that we need fast tat, form and after you know, with the spectre of Roy, more imploding and possibly another democratic, Senator winning election next month. Mcconnell is said, Lightwood then we're gonna resolve this with the Czech Senate that we have right now. All of these things become sort of motivators to move more quickly sort of. Paradoxically, even though it looks bad for Republicans in a vacuum, let me I don't think we should downplay that there still taking
difficult votes wreck pay in the back. It's worth you know, dissecting Miss Lucy, Graham statement the way, because this is definitely become the conventional wisdom in the sort of republican hothouses like you should shut the Republican Party down. If it can do this tax, but cannot be taken. For a second say, the only thing Republicans were able to do in office was maintain strong gun rights. For second amendment supporters, restrict the availability of abortion, increase the ability of devout Christians to practise their faith without regard to anti discrimination, laws, help police departments be able to fight crime as they want without a lot of handcuffs from you know, politically correct social activists, secure the southern border, MAC down and illegal immigration right as I'm listing all of these things it does
sound, like I'm saying the Republican Party cant, do anything. It sounds too He like call him quote: all Republicans would be doing is the stuff that they promised in their campaign and the stuff that their voters care about. Now, if you say, ok They got all that but to like really deliver for their voters. What they need to do is passing large tax increase on middle class families who, like oh yeah. No, they don't need to do that. Right, like it is absolutely true that the billionaire donors to the Republican Party will be really mad at them. If they dont deliver attacks, got four billion turned down. yes, but that's like I mean that's true, it's important, but it's like it's a different thing from what it is. They are saying like they're, not doing lots of other stuff and, in particular what they are doing is like taking action on the culture war topics that they campaign,
on the other you're, never going to see an ad right like when, when there's a race skin out can be re said that in the vat rate Edna someone's gonna run against Jackie rose in and the Republican is not going to say we gotta keep Jackie Rosen out, because if she's in taxes on middle class. People are gonna, be tulip right. A republican needs to win so that we can pass this along the red Never in a million years like this is just like it's it's it's something there doing. I mean you, can see there doing it for their donors or you can say, they're doing it because they sincerely believe in it. However, it is there not doing it because, like this is what the base one right. I do think that's I wonder I have also come to wonder how much of it is. I don't wanna say it's a vanity project, because that's not fair the lake, how Speaker power I am like this is, I think, legitimately been his baby for my own ears like he has been in the
it states Congress to take. It will form an idle man. S end to cut taxes, and so I do get the sense that he is very much in when you set the agenda for one chamber of commerce. You have a lot of influence like he is very much. The reason. A lot of this has happened. He was the ways and means chairman and now he's a speaker. Everyone calls it says Ryan's bill and really is a big day on Thursday that they pass reigns there and he is not, as bought into some of the culture were like he He had put a sort of performance. Lively goes through some of it when he has two but like he is certainly invested in corporate republican agenda, and so that I feel like you, can kind of separate it from him. Just as an individual's at a person now who's setting this address a second last break, and then let's talk about the sort of prospects for Listen Senate. Some great talent for business, but rapid short on time I mean who doesn't? Every business needs greater every business person a short time and you don't really get lost
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and everybody thought like, maybe he meant what he said all these weeks and he's gonna actually voted down, because he could have been the divine, decisive vote, stop it and then he just for it and then ran challenges, yeah and he really screwed up because once at once became new killed, skinny repeal Red Johnson could have it like hopped on that bandwagon and gained a little credibility so now I know weird centres where he says he won't vote for it, but nobody believes dear. Yes, I think that's right maturity, weapon he's not cover for, I would love. I personally did not understand his stated objection. I may I think I think a lot of you bought it quite understand it, but so too, basically that the gist of it with that because- the Senate change their bill to sunset, be passed through change. Is he said that this bill will not help small businesses and individuals as much as it will help corporate
actions at it's true, I would you and that he would like to see the pass through rate to be closer to what they are pushing for food corporations right so he's are actually trying to help individuals. no just the hours of passive or of the other half smothered equipment, which is really big in Wisconsin. Right, yes, and he certainly not alone like There- is a very real conservative contingent, for whom the pass through issue is sort of like the most important thing I know like House Freedom Caucus Chairman Mark Meadows has talked a lot The best thing that is his red lights is worth saying. They will often too Thus this is small. Businesses are, but that the difference between a sort of sea, corporate and escort is not the size of the business summit. The number of people who own the business right right so so, like the Trump Organization, is passed two entity and in particular, a coke industries. It is a pity,
who actually so this is an issue that is important to a lot of Republicans is unclear to me how much it's an issue that relates exactly to this. The small businesses? I, like MRS Kim's dry cleaning shop, is like actually probably not paying at a super high rate anyway. It's not that lucrative right and the way they set this up to, in particular, is like that. Wanted to an initial objection. Liberals had was well ok, you're, going to deliver a huge tax, get to law firms, as I would you would, because almost all law firms are organised ass, their students. They made some special rules so that a professional services, companies and stuff couldn't get this credit. You know, so it's helping animal like real businesses in their mind, but real estate companies like still get the favourable treatment. So there's this courier looking out for like a certain prominent family american politics. Here
but I mean you, you could imagine wrong John getting the White House his attention with this. From that exact reason, but the problem is like the changes he wants to make our not cheap. Ray and left for the reasons that we already laid out like the Senate is working with a very thin margin for error of ten margin and when it comes to changing the plan that they could arrive for yet I'm Johnson is asking for something that is incredibly differ for what to and probable, maybe even impossible. but that's the only the borders on the wreck. Right, yes, Another wild card in here, in my opinion, is ran Paul, who soil scuttled, somebody's healthcare bells and note he was the one who suggested array,
only that they that they fall under Tom Cotton at all, but also you said he said they should put the mandate thing and and and what ran paw had said at the time was he didn't think it made sense to be raising taxes on middle class people and then what they should do is they should repeal the individual mandate and use the money to make sure was at tax got for random class, they did repeal the individual mandate but it still nodded Texaco prevalent in the middle class break the centre bill by Euro Levin is a tax increase on every single person in America who doesn't own a business yeah there. Actually is that conflict here that I feel like, as we have a really drawn out yet, which is here, there's a there's, pretty bought broad base of support to repeal the individual mandate. as part of the tax referral but like what you'd then do with the money is, I think, there's more,
vision there may be than we realise cuz. You have a few people like Bob Corker of Tennessee and Jeff Flake of Arizona who are fixated on the deficit and the fact that this is gonna increase the federal deficit by a trillion dollars and so I was at the capital this week and I heard Bob Corker Winnie somebody asked him about Amanda mandate. He said like yeah. I could before that, as long as we use the money to. Therefore, you no decrease the impact on the thorough deficit, this bills have. But on the other hand you have people like ran Paul and TED Crews of Texas, who have said like. Yes, we should repealed, individual mandate, but then we should use that money to cut tax rates. Even lower firm individuals may be for businesses as well. but, like the point being that they are interested in shrinking that deficit number at all, they just want to cut cut taxes anymore, and I haven't seen how they're going to resolved that, because on either side it seems like you're in a disappoint somebody, depending on how you spent I use this money in and you have all of that, the California in New York and New Jersey, rather like the guy. You should use that money to help salt a little bit more.
Right, but if it but the city, needle that they have to thread right. The Mitchell Mcconnell has to say to when Paul and TED crews look. I know that the bill says these middle class tax cuts are going to expire, but like coma, and this is the real world right what's gonna happen is, as we get to that date, we're gonna run on. Let's make those tax cuts permanent yeah either we're gonna beat a million Democrats and win all their seats, or else Democrats are going to join with us and we're gonna have the sixty votes to extend those middle class ex gods, so dont worry about this Jesse T score. Dont worry about these attack adds like that's, never gonna be implemented. Don't worry, guys but then he's gotta turn around and say to Bob Corcoran Jeff flake. Look, I know
I love this one point five trillion dollars of short term debt, but like in the long term, this bill reduces the deficit check out the Stacey T score. Damn you know Bob Rubalcaba and you have to convince you to convince Corcoran Flake, who are leaving right, that, like the bill, does what it says. It's gonna do while convincing like we're, Paul and others that look Corcoran Flickr leaving right. The bills not gonna, do what it says. It's gonna do yeah well, and I think it's it goes back to like the there like. They can only lose two of their own members and so like we ve already seen that they like day they had kind of a similar balancing act. I think in the healthcare debate they d like condemn, The conservative side that, like we're doing a lot rollback, be affordable care act, but the other comments, the moderate side that like well we're not we're not going to like in up totally devastated its market leave millions of people uninsured and they never actually came up with a
compelling argument that one fifty republican senators, and so now you already have you- have RON Johnson already says he opposes the plan. You have, I think, a lot of people presume that Susan Collins will end being opposed, especially now that you ve added healthcare the equation, and then you have this. Like there, We six other sort of an no unknowns like Flake Corker, who to your point Matt like don't really have any, reason to vote for this. If they don't like it, because they ve already announced that their retiring rumours that young tight young Todd YA like war, there is always one young, lady Et Cetera. India Indiana my eyes, and I haven't well and then like James speaking, sort of and I'm senators who popped up Chancellor for of Oklahoma has got married about about the deficit, so there was actually work.
this morning, I'm not sure how seriously to take it, but there was a report this morning that there is a group of four republican senators who are talking privately about whether to kill the current version of the Senate bill and so like. It does seem to be like it's. The house just breathe through this, which I think it correctly gives us the impression that there is real momentum behind this. And yet the Senate suddenly seems in a very precarious I mean the question of whether or not corporate tax rates are enough to to unite their buddy. But also in the house where, as you say, wait the leadership. I don't know I pick up. two members who voted for the Bell said that one reason they voted for the Bell is that, like everybody, knew that the bill as written wasn't gonna go to the Senate, but they wanted to move the process forward. And they were claiming that some of these concerns would be addressed in the Senate book, but the second bill is different. It son different in a way that addresses any of those
servants right, I mean Emmy, I so they were given the same assurances that they were given in the healthcare debate that the sun or make a better wolves going to conference committee and will make a better. But I mean it's not like what's different this time as they can actually see what the Senate has been, doing and it's not better for them, and I think the deficit question is going to be really really big for a lot of the senators I think, at an odious, Dylan's rolling aside what sort of how much today, how much do they mean by worker has been really quiet. For the last I mean the last few weeks, basically after being very outspoken for while France, can't decide whether that means he's just waiting for the right time to spread upon the bubble or whether he's sort of realise that you know what it's very important that we cut. The corporate tax rate to twenty percent saw set aside some of my previous objections and go ahead with this. The other thing that interesting
Think dear Papa, is that I think there's been reporting, I think tar. You reported this. That Paul Ryan has very has been asking house Republicans not try to bash the Senate plan, and I think that seems like a tacit acknowledge, that, like we don't want you getting out there on the record bashing. This plan that you may end up having to vote for, because the most important, the most important calculus in all of this is what can get. Fifty votes are United States that got going into the house fat. Several member has taught me that was that, with the message from leadership just be quiet on the Senate Bell. For now yeah, but you know I mean, because with health care I mean a couple of things. health care right were initially, we thought. Okay, there was can be some ping pong, but then things just fell apart in the sand and you're right, ok, we're moving on, and then it was a last minute rush, because actually the reconciliation orders were expire,
and so the house was eventually saying: ok, whatever the setting can pass zoning a week, laugh the gorgeous just vote. Yet you don't have that kind of countdown down dynamic right here right so like on its face. I view Warehouse Republican who already voted yes on this house bill. You can say to whoever right leadership to your donors, like I voted for tax reform like I support it, and I also support the idea of actually getting something through with the Senate, but, like I do not need to vote for this particular thing. that was just put in front of me by Mitch Mcconnell yesterday, the F b I might like. I voted for a thing we have many months like. I want to make this a bill that island that'll be interested like. Who do you could do that, though I got home where they, California, Republicans, potentially come back into play way. I just mean I just mean it's: it's not
vs that you can Jim the bar the the exact way, as an adept that they were in the healthcare you're like saying we ve got to get this done by Christmas, but that's that's like that's just their schedule. The it was actually true healthcare right, that, like they were either gonna get it done? I was out there making the political catalyst that going into twenty eighteen for them in terms for the House Republicans, it would be not great if they were unable to finish Obamacare appeal and but it is an arbitrary that last December March waited a long time before the twenty Eightth midget right. Well- and I, think it seems like part of the speed calculation is one or allow peaceful. You don't allow people like figure out what's in this plan and erratic could end up being like if you just ask everyone to vote for it before Christmas and connects get it out of the way that the best way to get it passed. I mean that's that's what kind of makes me skeptical of like a paint
This is like working great, there's, no fuss, there's no drama, because we did see with the healthcare debate that there was at the beginning when Mcconnell first put his plan electors have feigned unity or silence around it. Marchand experiencing that same thing now or the like ones, really coming out, really forced for something or really again something. the thought and nothing I guess the question is like is wrong: John, a canary in the coal mine, or is he just RON Johnson everybody? I've no measure we should ever take him to be a behold there anything I answer. I always runs right exact, and so that's why you know I'm waiting for, like the Bob, Corker or Jeff Flake move people and John Mccain right idea, letting gigantic clean has emerged as a critical. I don't know figure that set of politics of these days. I don't make it making his.
all pitch was this needs to be regular order needs to be a bipartisan effort, and I mean it has not. I mean technically, yes, they're going through committee, in marking. Up and Democrats were able to offer amendments, and I would like it so he keeps saying I guess it's regular it's fine, even though, What did not actually taking input from Democrats are moving it really quickly. Then I heard him say Today we are now like they just rolled out new bill last night. I'm sure, if that's regular, I mean who knows whether this way you order thing is Ike angels on the pen of a needle Raymond this is not a highly deliberative bipartisan process, but it is like it meets the technical criteria of regular order right. This is the kind of thing we're like John Mccain, hasn't decide what he thinks like IDA. Out of it goes like an answer re out there. Air- and he has been a little kind of like you- know, maverick
to use that word on taxes ray I care number four forbidden. He voted against the budget out right. Ok, I think we We bear wrap it up. There's gonna, be this get me more time for for tax reform. They probably won't get this done well, they won't get it done next week and I dont think they'll get it done when they say they're gonna get it done. So with that they see you guys effort for being here thanks to our sponsors, thanks to our producer, Peter Leonard. If you want to talk more about these issues, really suggest you check out the weeds Facebook Group, we do not get me something special coming suit yourself, but I can't tell you so exactly state to recommending your podcast and we will see you next week.
Transcript generated on 2021-09-12.