Republicans are celebrating Wednesday after both the House of Representatives and Senate approved major tax reform legislation, laws which supporters claim will put badly need money in the pockets of American families and giving an already improving economy an even bigger boost.
The final bill is a compromise hammered out between differing House and Senate versions that were approved separately in recent weeks. House Freedom Caucus member Rep. Dave Brat, R-Virginia, says the new law is far better than what he expected to emerge from the congressional negotiations.
“I was fairly shocked. Up in D.C., usually at year-end when you go into conference I usually don’t like the outcome. But in this case, we fixed a lot of the issues. We had a college student loan issue, a graduate student piece. There was a Medicare piece, a small business piece. All of those got major improvements,” said Brat.
Brats admits he wishes the the final bill would have called for three tax brackets instead of seven, but he says there’s still good news there.
“By rearranging those brackets, they ensured that way more people get a tax cut. A single woman with a child gets over a thousand dollars back. That’s great. A family of four with two kids, married and making $70,000 – that’s the typical income in my district – they’re getting $2,059 back,” said Brat.
“The corporate rate goes down from 35 percent to 21 and it takes place this year. In the Senate plan, they were going to lag that a year. In conference, we fixed it so it goes into place. That’s probably the most important piece,” said Brat, who says the stock market has been soaring in anticipation of this bill getting passed.
Brat says another big group of winners are young people looking for work. He says businesses will now be in better position to hire people for good jobs.
“I think the kids I taught for 20 years are going to go out. They’re going to have multiple job offers and go out and live the American Dream. That’s the goal of this thing. The kids go out and get good jobs. That’s a virtuous cycle, so I’m proud of it,” said Brat.
And while Democrats all voted against the bill, claiming Republicans were giving big tax cuts to businesses and rich people at the expense of the middle class, Brat says the facts prove otherwise.
“The Democrats on the floor today were just apoplectic on the thing. I’ve never seen such emotion and misinformation. We’ve (supposedly) raised taxes on the middle class for the rich. They just can’t overcome the basic facts,” said Brat.
Some Democrats admit that middle class families will get some tax relief but suggest the $1,000 or $2,000 in extra income only amounts to a few dollars a day and makes no tangible difference. Brat disagrees.
“They’re making fun of giving back money to lower income folks, which I thought they would applaud. A thousand dollars or two thousand for a family of four, that’s some big bucks. That pays for a lot of stuff that families don’t currently have,” said Brat.
He says the emotional denunciations from the Democrats are designed to distract from their dearth of ideas.
“If you want to reject a hypothesis, you have to offer a better hypothesis and they don’t have that,” said Brat, noting the the Democrats’ budget called for $10 trillion in new taxes and $11 trillion in new spending over the next decade.
“If you raised taxes $10 trillion, you would go into a massive recession next year. Period. End of sentence,” said Brat.
He says eight years of Obama economic policy led to anemic economic growth.
“You saw the evidence over the last ten years. You didn’t have growth. Your growth was at one and a half or two (percent) tops. Now we’re at three percent and the Federal Reserve has us at four percent next quarter,” said Brat.
While Brat admits the bill does not pay for itself and projects a $1.5 trillion deficit over ten years, he says the impact of the bill should easily lead to additional revenues to cover that amount.
“If you put the tax package together with capital incentives and lower rates and less regulation, all you have to do is come up with $150 billion a year in growth, and we’re going to blow by that with ease,” said Brat.