This is a transcript of the interview The Daily Signal did Thursday with Rep. Dave Brat, R-Va., to get his thoughts on the new tax plan, and how it would affect middle-class Americans.
Rachel del Guidice: Hello, everyone, and welcome to The Daily Signal’s Facebook Live. My name is Rachel del Guidice, and I’m joined today by Congressman Dave Brat from the great state of Virginia. Welcome, congressman. Thank you so much for joining us today. Well, it is a big day for tax reform. The long-anticipated, awaited bill is here. We’re looking at it. What are your takeaways from the little bit you’ve got to see or how much you’ve got to see of it today?
Dave Brat: Well, I know your folks follow policy, so the contrast is with health care where we didn’t pre-coordinate together, et cetera, and we kind of got a bill at the last minute, take it or leave it. This was very different to House, Senate, White House. We agreed on four pillars: S-corp, rate reduction, C-corp, middle-class tax cut, and then international—getting it right, being competitive. And leadership came through on all four.
We’re very happy today, and one of the key questions … You know, it’s a middle-class tax cut, so people want to be assured the middle class is really going to get a tax cut. Ways and Means Committee today, everybody’s in there, 240 of us, and their staff assured us everybody in the middle, right, for sure, you know, the average family income in Virginia is $60,000 for a family of four. They’re getting 1,200 bucks back. Right? That’s pretty good. Average family of four, two kids, $1,200 bucks. You can do a lot with $1,200 a year, and then there’s more coming in terms of when we get economic growth going. You know, $4,000 additional of savings for the middle-class workers as well.
Del Guidice: Actually, The Washington Post, like, re-emphasized that truth this morning in an article that they wrote, they basically debunked that Democrats were saying, “Oh this tax plan is going to hurt middle-class working families.” Did you see that?
Brat: I know. Some of it is just pure politics. Right? The Democrats, they’ll say, “This is a tough vote for us.” It couldn’t be further from the truth. I think they’re scared. [John F. Kennedy] was a great Democrat. He dropped tax rates, and boom, it took off. And then [President Ronald] Reagan, boom, it took off. And then we’ve been told, you guys a year ago, the mainstream press for [President Donald] Trump, the economy would tank. The stock market would tank. It’s at all-time highs. The market’s up. We’re growing at 3 percent. Last quarter, this quarter.
And today the Atlanta Fed, which is nonpartisan, good economics, they have us growing at 4.6 percent this quarter, on real time basis. So if we can hit anywhere near 4 percent, I doubt we’ll get to 4.6 for a year, but if you get anywhere 3.5 to 4, this thing breaks even. The tax cuts pay for themselves, and it’s great news. Wage rates have been flat for 30 years. Wage rates will go up. No one even knows what pro-growth is anymore. We don’t even remember what it looks like, so I think we’re in for a good burst.
Del Guidice: And I’ve already seen, there’s been a few Republicans from blue states saying, “We don’t like that you’re scaling back the state and local deduction. We’re not happy with it right now.” What would you say to them?
Brat: On net, you’re going to be better off. Right? I was just on one of the more liberal stations, too. They said, “Are you doing middle-class tax cuts? And you’re only doing them for the rich.” Well, and then they hit you on this, the SALT tax, state and local. Guess which states that affects? The rich states. Right? So they’re going to pay a little more. Right now, the poor states are subsidizing the rich states for their tax write-off. So we’re just going to level the playing field. Say, we’re not going to pick winners and losers. You don’t get to deduct your state and local taxes. The property tax rate will stay in there. You’ll still get to deduct your home, if you got a mortgage or personal property tax. That’s all grandfathered in, so no one don’t get hit. But you don’t get it both ways.
[House Speaker] Paul Ryan’s done a good job on the theory here. We’re trying to level the playing field. No distortions. So that’s what we’re doing. We’re not going to pick winners and losers, which states. If you want to have all the amenities in a rich state, you can. Tax your people. If they want it, that’s okay. That’s what we want. We want decentralization. If different states want different models, that’s great, but at the federal level, we don’t want the federal subsidizing the rich states. That’s kind of not Republican theory.
Del Guidice: And I’ve talked to a lot of small business owners and covering this whole tax reform debate, and they’ve said some of the most important elements that they want to see kept in the bill is, for example, expensing. What are you hoping to do going forward to make sure that elements like that stay in the plan despite the back and forth we’ll be seeing?
Brat: Yeah, well, that’s one of the red lines. Right? The Freedom Caucus, we fight on behalf of the middle class. We try to keep our promises. We don’t want to lose one of the four pillars. The C-corp down to 20 percent. That’s a core pillar. And then the S-corps down to 25 percent and then immediate expensing.
I’ll give leadership credit. When they’ve come to hard choices because we’re limited by 1.5 trillion on the Senate side, they’ve made the pro-growth choice every single time. So we’re doing pro-growth on the business side, the supply side. And the kids right now who can’t find jobs coming out of college, there’s a new day coming. They’re going to be able to find some decent jobs once these economies start growing. We’re going to be in great shape.
Del Guidice: You mentioned the non-negotiables of those four pillars. What is like, I guess maybe one of the biggest misconceptions you’ve seen reported in the media about this whole tax reform issue?
Brat: Well, the left is doing the usual thing. They’re saying 80 percent of the benefits go to the top 1 percent, which is more than four Pinocchios, right? I don’t know what. But they’re including in the rich business, corporations, small businesses, right? If you really want to destroy the poor, get rid of the corporation. Then the poor have nowhere to work. By the way, no one’s reported this, so you get an exclusive here. The Democrat side, they put in a progressive budget two weeks ago. One hundred and seven votes, so it’s substantial. They raised taxes $10 trillion. They raised spending $11 trillion. They have more debt in deficits than we do after we cut taxes.
So we’re pro-growth. If they put in their proposal for $10 trillion tax increase, you’d have zero economic growth. You’d probably have an immediate recession. Kids, there wouldn’t be any job openings, and you’d have a disaster on your hands. You don’t have to have it perfect. We’ve got a pretty good plan here. I’m pretty happy. It has work to do, but all you have to do in politics is beat your competitor. There’s no race. We’re at the finish line. They’re moving in the wrong direction. They’re raising taxes, so I think we’ve got a big winner.
Del Guidice: And looking forward, last question, President Donald Trump has said he wants, I think, a bill through the House by Thanksgiving, and he’s hoping to sign it by Christmas. Given the fact that we had trouble with health care, why are you confident that this will be moving through quickly and possibly be signed by Christmas?
Brat: Yeah, well, one of the strongest drives in life is called survival, so after the health care debacle, we all know we have to have a win. And that win is going to be tax reform. So the House, I mean, you saw we have the votes for this in the House. So now it goes to the Senate. We have problems with the Senate. They get six years. They’re hearing, right, they’re not hearing the American people quite loud and clear yet on the last election. And it wasn’t just President Trump. It was [Sen. Bernie Sanders], a revolution over there, too.
All the way through Trump and the mid-Western states in the middle, Michigan, Pennsylvania, Wisconsin, etc etera. And what was that? The middle class was saying, “Hey, the game’s rigged. All the cronies up there are getting rich. The middle class hasn’t seen anything.” So we just delivered for the middle class. They’re going to get a tax cut. Average family income $60,000 gets 1,200 bucks back. That’s real. The other side of the aisle has offered nothing, and so that’s why we want a vote. And we want it soon before the cronies up here, the swamp, every dollar they win, right, every special loophole they find, every deduction they get will come at the expense of the middle class. So the swamp gets a dollar, the middle class loses a dollar. And we don’t want that.
Del Guidice: Well, congressman, thank you so much for joining us. I know you’ll be following us as part of the Budget Committee. We’re going to be following this for all of you. Thank you so much for joining us today on our Facebook Live. Make sure to like our Facebook page if you haven’t already so you’ll always know when we’re going live. See you next time.
