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Tax reform takes ‘fresh approach’ to help workers and spur growth, says Rep. Kevin Brady

House Republicans unveiled an ambitious tax overhaul that they say will simplify American taxes and encourage economic growth. But critics argue that businesses and wealthy Americans are the biggest beneficiaries and that middle-class Americans stand to lose. Judy Woodruff speaks with Rep. Kevin Brady, R-Texas, the lead author of the bill, for a closer look at the plan and chances for passage.

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  • Judy Woodruff: 

    Let’s take a closer look at the ambitious tax overhaul plan unveiled by Congressional Republicans today and hear from both sides of the aisle.

    We start with Representative Kevin Brady of Texas, who chairs the tax-writing Ways and Means Committee and is the lead author of the bill. We spoke a short time ago and I asked if Americans will, in fact, keep more of what they earn under the Republican’s proposal.

  • Rep. Kevin Brady:

    Yes, I’m convinced, one, people are going to see much lower taxes and keep more of their paychecks. But, secondly, we’re not stopping there. You know, we– we want higher paychecks. We get this economy going. It’s been stagnant for a decade. Most families are living on less than they’ve had before. So, that’s what this tax reform is all about.

    And, Judy, I never forget to remind people, we’re proposing a code so fair and simple, nine out of 10 Americans will be able to file using a simple postcard-style system. Boy, that benefits in time and hassle and headaches for every family.

  • Judy Woodruff: 

    Well, I ask you that because you’re also, of course, capping the mortgage deduction, doing away with the student loan deduction, and also state and local taxes deductions. So, isn’t that going to hurt some people?

  • Rep. Kevin Brady:

    You know, I don’t believe it will, and here’s why. We keep the mortgage interest deductions, charitable deductions and property tax. We enlarge the child tax credit for families, make sure twice as many Americans will be able to use it. Then we lower the rates. We protect more of the first dollars.

    So, when you add all of that up, you see that Americans get to keep more of what they earn, including in high-tax states.

    And so, look, I think this is the tax reform Americans have been just starved for, for 31 years. Now we get a chance as a country to weigh this and take action.

  • Judy Woodruff:

    What do you say to those critics, Chairman Brady, who say the bigger tax cuts, though, are going to go to wealthier Americans by doing away with the estate tax, by doing away with the alternative minimum tax?

  • Rep. Kevin Brady:

    Well, as you know, the top rate remains at 39.6 percent as it is today. The AMT is really a double tax that can cost taxpayers sort of in the $200,000, $300,000 level a year, $75,000 a year. So, when you remove the AMT, repeal it, and, by the way, the death tax really hits the family-owned farms and business hard. That’s who really has the damage from it.

    So, look, there is tax relief at every level here because we want the growth. We want you, again, to have control of your paycheck. That’s all.

  • Judy Woodruff:

    The other argument we’re hearing, Chairman Brady, is that the business tax cuts really do add up to be the biggest part of this between the corporate cut from 35 percent to 20 percent, and then, in addition the so-called S Corps, the pass-through businesses. They are going to get a significant tax cut.

    So, business is really the big beneficiary?

  • Rep. Kevin Brady:

    Well, I don’t agree. I think it is middle class families and here’s why — the smallest paycheck in America today is the one whose job has moved overseas. And that’s the problem for now more than a decade, we’re continuing to see our jobs and headquarters and research and manufacturing leave. This is all about bringing those jobs back.

    And for main street business, you know, look that family-owned donut shop makes $62,000 a year working day and night and weekends. They’ll get a $3,000 tax cut that they’ll use to plow back into the community.

    So, look, I think the big winners are workers who want to see higher paychecks, middle-class families who just want to keep more of what they earn.

  • Judy Woodruff:

    How do you know that cutting taxes on these employers is going to lead to more jobs, more hiring, and higher wages? I ask, again, because the studies that have been done, the vast majority of them show, that has not happened in the past.

  • Rep. Kevin Brady:

    Well, I respectfully disagree, but here we can just look ourselves. Look at the last 10 years. If you think high tax rates on families and businesses work, you think the current status quo tax code worldwide is working for America, we all know it’s not, that America has fallen far behind our competitors. Our jobs are leaving, our local businesses can’t compete here or around the world.

    So, we are taking a fresh approach, leapfrogging America from nearly dead last into the lead pack, the best place on the planet for that next new company and jobs. We can change the direction of the economy. But have to act. The status quo, leaving things as they are, I don’t think that’s an option for families.

  • Judy Woodruff:

    The other comment we hear, Chairman Brady, is the conservatives, fiscal conservatives who are worried about the deficit, worried about the debt. They’re saying this adds another $1.5 trillion in coming years on top of the $10 trillion that’s already forecast.

    Have Republicans just stopped making the deficit a focus and the debt?

  • Rep. Kevin Brady:

    Yes, yes, no. Here’s what we know. If we want to continue these high deficits and debt, just keep things as they are. Keep the economy slow as it has been for a decade. It’s picking up now. Just allow that to continue.

    This is all about generating growth, jobs, paychecks. But guess what? State and local revenues for government increase when you get people back to work. It does the same for Washington as well.

    So, I’m convinced, Judy, that tax reform done right helps moves us towards a balanced budget, gets us out of the doldrums we’re in today.

  • Judy Woodruff:

    When you say balanced budget, you mean you literally think this is going to bring the debt down?

  • Rep. Kevin Brady:

    So, overtime, I believe, we’ll balance the budget in two ways. This will help us move toward it in two ways. One, because we do get so much of a stronger economy, but that alone isn’t enough. So, we eliminated, as you know, dozens and dozens and dozens of special interest provisions for business and families so we can lower the tax rate, get the economy booming.

    You have to do both, and that’s what this tax reform does.

  • Judy Woodruff:

    And finally, president Trump says he expects to see this done before Christmas.

  • Rep. Kevin Brady:

    We’re on that timetable. So, we’ve introduced today, the Ways and Means Committee will begin to take action next week. We expect to send to the floor shortly afterwards. And then, of course, the Senate is going to have their version. They’ll be making their improvements. We’ll work that together and find common ground.

    So, right now, Judy, we are on track to get this to the president’s desk by the end of the year.

  • Judy Woodruff:

    So, massive, complex legislation gets done in less than, what, six weeks?

  • Rep. Kevin Brady: 

    Well, we are working — we’ve worked very hard and here’s probably the difference. Unlike health care, the president, the House and Senate have come together this fall, earlier on where we want to go. We worked, some of us, for more than six years to be ready for this moment.

    Yes, we’ll be looking to make improvements. We’ll get input going forward. But I’m convinced we can do this.

  • Judy Woodruff:

    Chairman Kevin Brady of the House taxing committee — thank you very much.

  • Rep. Kevin Brady:

    Thank you, Judy.

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