Davidson Swats Tax Cut Critics During Cunningham Interview
Washington, D.C. - During an interview with The Bill Cunningham Show on 700 WLW in Cincinnati, Congressman Warren Davidson outlined what tax deductions Ohio families can expect to see in the new tax reform bill and confronted calls that the tax reform bill will raise the deficit.
You can access the full interview here.
Deficit? The economy is currently growing at 4 percent with just the expectation of tax reform.
…Here’s the thing, people are concerned about the deficit. The reality is, cash revenue, as in money into the government, has only gone up when the economy is growing. When the economy is not growing then revenue into the government is going down no matter what tax rates have been over the years.
When you look at the Obama years, they were saying you know, 1.5 percent is the new normal and 2 and 3 percent are long gone.
Just in the expectation that we’re going to pass tax reform the economy’s growing at 4 percent. So the CBO score, which is almost always wrong and likely wrong again in this case, says this tax reform will only grow the economy by an additional .04 to .08 percent – when in reality it’s already growing at an additional 2 percent just off the expectation.
When the economy’s going to grow, take home pay is going to grow. Then when you get into the cuts, the cuts that are in there are going to benefit working class Americans ... We’ve run scenario after scenario and people are going to get more take home pay out of this.
Tax rates go down and take home pay goes up.
…Well it’s a straightaway for everyone. Let’s say you’re married. Right now your standard deduction is $12,000 and some change. With tax reform it’s now $24,000. So effectively your first $24,000 of income your tax rate on that is zero percent. Then as you go through the rate structure, the rates get lower as you move through your taxable income. It (the new tax reform bill) keeps all the popular deductions your mortgage deductions, charitable giving, 401K savings, there was a bunch of drama about that, and the good news is that it keeps medical expenses.
So let’s say you’ve had a bad year and you spent a lot of money on medical bills. This bill keeps these medical deductions. So the final product for the most part, is better then what passed either body.
What about the Alternative Minimum Tax (AMT); and then this bill keeps the mortgage interest deduction limit around $750,000 is this true?
…Yes, the vast majority of homes in the 8th congressional district would qualify for this and the vast majority of home across Ohio would be that way too and overwhelmingly across the country.
The other part is that state and local taxes like ours are not very high compared to New York or Illinois. But if you look at our state and local taxes we have kind of a high tax burden in the state and it matters. It goes not just for property taxes, it goes for income state taxes too.