Rep. John Faso On GOP Tax Bill
SCOTT SIMON, HOST:
House Republicans passed their version of a tax bill this week, but there were 13 Republican representatives who voted against the $1.5 trillion overhaul. Most in that group didn't like what happened to the SALT - SALT deductions, state and local taxes like sales, income and property taxes. The House plan would get rid of most of those.
Representative John Faso was one of the Republicans who voted no. He represents the 19th District of New York. He joins us now from Kinderhook, birthplace of President Martin Van Buren, I understand, Representative Faso.
JOHN FASO: That is right, our eighth president, the little magician.
SIMON: Well, thanks very much for being with us. You were publicly undecided about your vote, saying you liked some features, didn't like others. What made up your mind?
FASO: Well, at the end of the day, I was hopeful that we could get further change in the repeal of the state income tax deduction under this legislation. And unfortunately, that was not to be. So I feel strongly that 114 years of tax policy has said we do not double tax the income that people have to pay in taxes to their state or local government.
And I think that that's a significant flaw here. And it will wind up in states like New York, which regrettably are a - is a high tax state - I fear what it will do is accelerate the existing trend of successful people and their businesses leaving New York. It's already happening. If you take away this deductability, it'll accelerate it.
SIMON: Couple of other New York state Republicans also voted against the bill. And is that because the sales tax is 8.82 percent? That's among the top 10 in the country.
FASO: Not the sales tax. This is really focused on the income tax.
SIMON: Income tax, I believe, is that percentage.
FASO: Yes. Income tax is actually close to 9 percent for the top level. And if you're in New York City, add almost another 4 percent on top of that.
FASO: So that's going to become a really big burden for people, looking at - if you're in a financial business, for instance, just unplug your Bloomberg Terminal and go to Austin or Fort Lauderdale or Charlotte - some other lower tax state - and you can significantly raise your income.
SIMON: Well, at the same time, Representative, were you comfortable with getting rid of the deduction for medical expenses? Because we - a lot of news organizations have been reporting about how hard that would hit a number of families with major medical problems.
FASO: No, I'm not. It's not in the Senate bill. They maintain that deduction. Frankly, I'm hopeful that that can be maintained. But I met with residents of a continuing care retirement community in my district down in Ulster County just yesterday. And part of the entire financial framework of those communities are the ability to deduct the medical expenses that they have. Remember, you have to have 10 percent adjusted gross income. Your medical expenses must equal at least 10 percent of your adjusted gross income in order to make that deduction. And so that's a significant amount for people. And now that would potentially be taken away as well.
SIMON: Do you feel, Congressman, that the leaders of your party aren't listening to you when you make these arguments?
FASO: Well, they actually worked with us. Kevin Brady, the chairman of the Ways and Means Committee, was under a lot of fiscal constraint because they've chosen to do this tax cut bill through a budget reconciliation process, which, candidly, causes you to be twisted into a pretzel - trying to conform the fiscal ramifications of that tax cut over a 10-year period to very strict financial guideposts. And it's very difficult to fit this tax reform into this reconciliation. So that's one flaw, I think, in this process.
SIMON: Do you have any concern - in the 45 seconds we have left - about what happens to the brand of the Republican Party if they can't get such a signature issue passed?
FASO: Well, I'll let the pundits like you talk about that.
FASO: My concern is...
SIMON: No, no, I interview pundits. I'm not a pundit. But go ahead, sir.
FASO: Well, you're closer to a pundit than I am. But I would say this - we as Republicans should stand up for federalism. We should stand for lower taxes, improving our economy, getting faster economic growth. That's the overriding goal of this tax reform plan. Unfortunately, it didn't meet all the tests that I need in order to vote for it because, frankly, I'm not going to have my constituents in New York become collateral damage just because New York state has high taxes in this federal tax reform process.
SIMON: Congressman John Faso - no pundit. Thanks for your time, sir.
FASO: Thank you, sir.
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