Unsure about what’s happening with tax reform? This may help. Sen. Mike Lee joined Glenn and Stu today to help them understand what’s going on with the GOP tax reform bill, which headed to the Senate today for 20 hours of debate.
Lee explained how the tax plan will help American families with a provision for an expanded child tax credit.
“It’s going to pass because it has to pass,” he said of the bill. “I and my Republican colleagues in the Senate will make sure of it.”
EDITOR'S NOTE: This article provided courtesy of TheBlaze.
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This is a rush transcript and may contain errors.
GLENN: Hopefully we’ll have Mike Lee on with us for a second. He has a tax proposal that he’s working on. We’ll talk to him about it.
STU: There’s some ridiculous things going on, arguments against the tax bill. And there are arguments against it. Good ones, in that, it’s not as good as it should be. It’s not as bold as it should be. Mike Lee is trying to do some things to it, that may help depending on your perspective. But some of the arguments against it, are also unfair. National Review has four of them that they feature today. People are calling it a middle class tax hike. This is an interesting thing. Because what they’re trying to do with this is play with the numbers.
Tax policy center analysis on the Senate bill reveals that three-quarters of all families would get a tax cut. Twelve percent will see a tax increase, and they’re concentrated around the rich. Now, to me, that’s annoying because no one should be getting any increase. But the idea it’s a middle class tax cut, you’re seeing that on Facebook. You’re seeing that on mainstream media. The average middle income family would receive a tax cut of approximately $850 through 2025. Now, what they’re doing is, they’re looking at the year 2027, and they’re seeing lots of tax increases in that year.
The Senate bill is structured to make these middle class tax cuts expire in 2025. They do this for a dumb budgeting gimmick. The idea is, in 2025, no one is going to say, well, we should raise taxes on the middle class. No one will want to take that position, so they’ll all keep the tax cuts. That’s risky. I don’t like it. But even if you say that they don’t extend them, what you would have is a 7,000-dollar tax cut in the earlier years, followed by a 100-dollar annual tax increase later.
GLENN: I’ll take it.
STU: It’s still a big cut over time, they’re just focusing on —
GLENN: No one is going to do it at that time anyway.
Mike Lee is with us. Senator Mike Lee, how are you, sir?
MIKE: Doing great, Glenn. Good to be with you.
GLENN: Can you help us make sense and heads or tails of the tax plan and tell us what’s going to happen. And I want to talk about, you and Rubio have gotten together. And you’re asking exactly, what?
MIKE: We’re asking to make the child tax credit more meaningful to everyone that works and everyone who pays taxes. What we want is a tax credit. People can take advantage of up to 13.3 percent of their earnings. This is a tax — payroll tax is something that almost every American worker pays. And our tax system fails to take into account what we call the parent tax penalty. Our child tax credit proposal, would address that.
Now, Glenn, I’ve been accused justifiably in the past of being really poor on your show. Talking about this proposal subjects me to that accusation.
GLENN: No. We’re going to let you go. It’s just that you get turned on by numbers and clauses in the Constitution, that most people don’t —
MIKE: Don’t we all?
GLENN: No, we don’t. But I appreciate that in a senator.
MIKE: Well, thank you. And I appreciate the chance to come over and talk about it. Because it’s really important.
Look, America’s working moms and dads contribute to our senior entitlement programs, Social Security and Medicare twice, once as they pay their taxes and a second time to incur the cost of child rearing.
Because of the pay-as-you-go nature of Social Security and Medicare, working parents are contributing to Social Security and Medicare twice. By increasing the child tax credit and making it refundable, up to 15.3 percent of earnings, what we’re doing is we’re making sure we provide necessary tax relief to offset this penalty.
GLENN: Mike, is this going to pass?
MIKE: It will. And we’ll make sure. Look, it will pass because it has to pass. And I’m not sure what form the tax bill is going to pass. But it’s going to pass. I and my Republican colleagues in the Senate are going to make sure.
STU: Mike, they were talking about potentially as an offset to an increase child tax credit of having to increase the — the proposed corporate tax. So it was 20 percent. They’re talking about 21, 22 percent. Is that going to be necessary to do the changes you’re talking about?
MIKE: This is one method of paying for it. We’re not necessarily wedded to that method of paying for it. We’re open to other suggestions. I’d love to leave the corporate rate at 20 percent rather than 22.
But as of right now, we got to keep in mind, that as President Trump himself explained to us at lunch the other day, 70 percent of tax relief in this bill is for corporations, leaving 30 percent of the bill for individuals.
This is one way of shifting more of that relief to individuals, especially to America’s most important entrepreneurial class of investors, that is America’s parents.
GLENN: Do you believe that America’s corporations feel comfortable enough in investing that money in — in capital expenditures or investment and employees, or are they just going to roll those tax savings into the market?
MIKE: I think they will invest in a lot of things that will create jobs. That’s why I’m pleased of corporate tax relief. The corporate tax itself is kind of a devious thing because it disguises the cost of government. People think taxes on corporations don’t cost workers any money. They do.
In fact, according to some economists, it may well be that half or so of corporate taxes end up coming out of workers wages. In any event, we know that taxing corporations would slow economic activity. And that affects everyone, including America’s middle class taxpayers.
GLENN: Is McCain going to stick with you guys? I saw a story yesterday afternoon. Looks like McCain is at it again was the headline. Is McCain —
MIKE: Yeah. I saw that story too. It gives me nightmares, had nightmares ever since that fateful night in July when he left his thumb hanging in suspended animation, leaving us in — turned the thumb down. Want to make sure that doesn’t happen again.
Look, I think he’ll vote with us at the end of the day. Even if he doesn’t, we can lose him and still pass the thing without him.
STU: Mike, I’m glad you’re talking about the payroll tax. I think it’s something that conservatives don’t get fired up enough about.
Here’s a tax that is a regressive tax, meaning that people on the poor end of the scale pay more than people on the high end of the income scale, which is something I can’t believe any progressive ever defends. But they seem to defend it. And not only it locks us into this — this idea, and a lot of conservatives, I think, fall for it, which is, these long-term giant programs that are supposedly funded through this, when in reality, it kind of all goes into a big pot anyway. These big programs are owed to us because of this separate tax. We don’t look at any other giant program the way we look at these entitlement programs. And I think it’s a real problem. Is there any hope of attacking this payroll tax even more boldly?
MIKE: Well, I think you made the point well. And this leads to a point I’ve been meaning to use in messaging with this, which is the best way to understand the Rubio/Lee amendment is that it basically provides a tax cut with respect to payroll taxes. And for some of the reasons you identified. We have to focus on this more than we do. And just as importantly, a related point is that the people who would benefit most acutely from the Rubio/Lee proposal would be those workers who are perhaps most at risk of falling out of the work force and choosing instead to go on welfare. You know, parents with young children, who are right at the edge economically of whether or not they’re going to decide, make sense to continue working and instead stop and take welfare benefits. We want to keep them in the workforce. We want to give them plenty of opportunity to stay in the workforce so they can benefit themselves and their families so that they can get promotions, and continue to make more and be contributing members of society. This would incentivize them to do that remove some of the incentives for them to just go on welfare and SNAP.
GLENN: Mike, I want to switch gears with you, and then I’ll let you go. You know, Matt Lauer was just let go. Garrison Keillor was just let go. And it’s — it’s a little disturbing to me that, A, we’re letting people go without any kind of real due process. It seems like this could get out of hand quickly, if we’re not really careful. I mean, I’m glad bad guys are going away, and I want this to be solved, but it concerns me that there’s no due process here.
However, the only ones that don’t seem really affected by it are those in politics. You know, on the Republican side, Roy Moore and Donald Trump. On the liberal side, it’s John Conyer and Al Franken.
They’re not going anywhere. Does that concern you, Mike?
MIKE: Yeah. In politics, some things operate differently, quite tragically. The meaning of the word “politics,” break it down to its Greek roots, poly, which means many, and ticks, which are blood-sucking parasites. A lot of what happens here.
Look, as to your first point about due process, in the case of Matt Lauer, for instance, look, he was fired by a private, for-profit corporation. I assume he was an at-will employee, or if he wasn’t an at-will employee, that he had some kind of provision in his contract, allowing his employer to take this action when they did this.
So speaking literally, in constitutional terms, that means there isn’t a due process issue. Due process in the lowercase sense of the word, I assume that NBC, being well-represented by capable attorneys, made sure that they dotted their i’s and crossed their t’s and that they made sure the facts were adequately substantiated before taking this step. Firing someone who holds public office is a little bit different because normally, in most circumstances, to fire them, you have to wait until the next election.
But I suspect that there will be a whole lot of people getting fired by their voters as these things continue to come out.
GLENN: You believe there’s more to come out, Mike? You’ve been there a while.
MIKE: Sadly, I come to suspect that there are. I’ve been saddened and surprised by some of the horrible things that have been happening. And it seems to arise in circumstances where men will do really bad things in circumstances where they think they can get away with it. There aren’t enough reasons that they see not to do it. And it’s tragic. It should not be that way.
GLENN: Which makes —
MIKE: But we’ve seen that — news entertainment, media entertainment, and government and politics. And it’s really sad.
GLENN: And it makes me a little nervous that if the people don’t vote those people out, if they decide that it doesn’t matter, we’re going to end up with some of the worst people in the world, even worse than we have now in Washington, showing up, because you’ll literally be able to get away with anything.
MIKE: Yeah. I think that’s right. And that would be an absolutely unacceptable outcome. Fortunately, Glenn, I don’t think that will happen for two independent reasons. First, I think a lot of people are going to take themselves out of contention. Perhaps most or all of those people who are in government right now, who are subject to these accusations are going to decide, it’s time to hang it up. Secondly, I really don’t think their voters are going to put up with it. This is unacceptable. They shouldn’t elect people who will do awful things like this.
GLENN: Senator Mike Lee, thank you very much. Good luck.