Paul Ryan, Speaker Of The House, Talks To NPR : NPR
President Trump wants a tax overhaul plan passed by Christmas. Both the Senate and the House have versions of the plan with the goal of cutting taxes. Morning Edition host Steve Inskeep talks to House Speaker Paul Ryan about the tax overhaul measures, and the rash of sexual harassment and sexual assault allegations being made public. Here’s the full transcript of their conversation. The audio on this page is an edited version of the interview that was broadcast on Morning Edition.
Steve Inskeep: I want to begin by asking you about tax reform. I know that any tax reform measure has winners and losers. People who gain, people who lose money. But you’re choosing here who the winners and losers are. What do the choices you’ve made say about your priorities?
We wanted a middle class tax cut. We wanted to have a system that’s more fair. much simpler. Right now the tax code is just chock full of special interest carve-outs and deductions and loopholes. When you take away those loopholes, in exchange for lower tax rates and a broader tax base, people who are very sophisticated who use all those loopholes will not have all those loopholes. But the exchange is lower tax rates across the board for most taxpayers in a simplified system. By doubling the standard deduction, instead of 70 percent of Americans being able to fill an easier tax form, nine out of 10 Americans can fill out their taxes on a post card. So by simplifying the system that way and reducing loopholes, you can actually simplify dramatically and lower tax rates across the board.
So that was your goal, was a middle-class tax cut. But what does it say that — in practice according to independent analyses, I mean you do have winners and losers, not everybody gains, businesses gain, people with large estates to leave to their heirs gain, high-income people gain — but a lot of middle-income people do not gain in terms of money.
I disagree with that. The average tax cut for a middle-class family is going to be $1,182.
Average, meaning not everybody.
So that’s when you run numbers on average taxpayers. This is designed to be a middle-class tax cut. I think the people who are concerned the most are some of the big businesses. That’s where we hear most of the complaints about. But this is a middle-class tax cut, no two ways about it. I just ran the numbers of Wisconsin. The median family of four, the median household of four gets about a $2,000 tax cut on average. So it is a middle-class tax cut. Here’s — just do the math. Instead of your first $12,000 being tax-free, as a couple your first $24,000 are tax-free. You pay lower tax rates up the income scale until you come to the top tax bracket, which is a million dollars. You have your child tax credit go from $1,000 per child to $1,600 per child. So things like that clearly produce tax relief for middle-income taxpayers. You mentioned businesses. I think it’s very important — we have to recognize that we’re in a 21st-century global economy, that we have to compete. And when we tax our businesses at far higher tax rates than our foreign competitors tax theirs, that puts us at a huge competitive disadvantage and we have to fix that and that’s one of the things we do in this bill.
OK, so a few things to follow up on there. First you mentioned the rates do go down for a lot of people. At the same time, a lot of deductions go away and it’s not necessarily what you’d think of as a special interest deduction. We’ve reported that 9 million people or so use a deduction for medical expenses, excessive medical expenses, and that deduction goes away. A lot of them are ordinary people with kids who have severe trouble.
But it’s typically a higher income person because of the way the Obamacare tax increase worked on that. You have to make a pretty good amount of money before you can even enjoy the ability to use that tax deduction. But the whole point of this is, and the analysis is very clear, this is an average tax cut for every taxpayer on average. You can’t run a number for every single 330 million people in America. But it’s designed to provide tax relief across the board. The only rate we don’t reduce, this is the House bill I’m talking about, is the top rate.
Lily Batchelder of New York University took some numbers from the Joint Committee of Taxation, bipartisan part of Congress as you know very well, and concluded that something like 100 million households in this country under the House bill, and even more under the Senate bill, would either get no tax cut or would get a tax increase. Does that sound right to you?
No, it doesn’t sound right unless it’s a person that’s not paying taxes already. You have to remember there are millions of people who do not pay taxes today to begin with. So if you’re not paying income taxes today, it’s pretty hard to cut your taxes if you’re not already paying taxes today. I think some people are cherry picking statistics — I haven’t seen this analysis so it’s hard for me to go into it. But because of the Senate budget rules, there are some sunsets in the law, in the later part of the decade where some of that tax relief goes away.
It gets worse in later years, that’s true.
And that’s what I think maybe that could be talking about. But just as history, if history is any guide, Congress has a very strong practice in history of not removing a middle-class tax relief like we didn’t in 2010.
But help me understand that. You made the middle-class tax cuts limited in terms of years in order to avoid damaging the deficit too badly, increasing the deficit too badly, trusting that a later Congress would fix it, which means the deficit gets worse or it doesn’t get fixed. Why does that make sense?
Well first of all history, if it’s any guide, Congress doesn’t have a big tax increase on middle-income families. This was because of the Senate budget rules, which obviously we’re not big fans of here in the House. But I’d also attest to the fact that this is going to produce economic growth. The Tax Foundation, a non-partisan think tank, showed that because of the tax relief in this bill and the pro-growth provisions in this bill, particularly for businesses to expense and hire and build more factories in America, that will lead to about a trillion dollars in additional revenue because of faster economic growth. So our goal here isn’t just to balloon the deficit. Our goal here is to give people living paycheck-to-paycheck a break. More than half of the people in this country on the surveys show that they’re living paycheck-to-paycheck. A lot of other people in this country are about $500 away from living paycheck-to-paycheck. So our goal here is to give people relief and to grow the economy. Grow the economy means we can get out of this stagnant economic malaise we’ve been in with 1 to 2 percent growth, get ourselves up above 3 percent growth like we used to be. You get that kind of economic growth which is clearly possible, and we think this helps us do that, then people can get wage increases. We have living standards go up. You have more jobs being created that pay better. You have faster economic growth and you get more revenue as a result of that.
You cited a study finding that that economic growth can come from the business tax cut. We could also cite a study from the Institute for Policy Studies casting questions or raising questions about that. We don’t want to go back and forth with studies, but you do know that it is possible that businesses will take their tax savings and simply give it to stockholders in the form of dividends, or simply hold onto it in cash or buy back stock. What if they do? Does it matter to you?
That’s still not an excuse not to put American businesses on a more level playing field with the rest of the world. Here’s the dirty truth of the matter. We live in a global economy whether we like it or not. I come from Wisconsin. The biggest company publicly traded in Wisconsin — headquartered in Wisconsin — used to be Johnson Controls. Johnson Controls is now an Irish company. Their worldwide tax rate is 12.5 percent because they became an Irish company, not 35 percent. So what is happening in America is American businesses are leaving, going to other countries, building factories in other countries, and foreign companies are buying American companies. This is costing us jobs. It’s costing us economic growth. It’s removing headquarters from our communities, which — there goes the United Way campaign, there go the jobs. And so, I don’t think any of these arguments hold a candle to the fact that we better get competitive with the way we tax our businesses so we can make an incentive to keep businesses in America. Let me just give you one more thing. I talked to the head of Intel, one of the biggest companies in America. They make all the microprocessors in your computers for the most part. They have 50,000 employees in America, factories spread across this country. They ran the numbers. They would save in taxes alone, over a 10-year period per factory, $2 billion in taxes if they just moved to another country. If they just go relocate to another country.
So our current tax code today rewards and incentivizes businesses to move money, capital, manufacturing, employees overseas. We want to reverse that trend so that we can keep businesses in America, jobs in America, expansion in America. And that’s why I’d say all these arguments about why we shouldn’t be doing corporate rate reductions, I think they pale in comparison to the fact that if we don’t do this, we’ll see more of this ugly trend continue.
How do you keep corporations from just pocketing the money?
So what we do is we have an incentive which says if you invest that money in your factories in America by expanding plant and equipment, which you inevitably hire people to run it, you can write that off 100 percent. So you take your money — first of all, we have about $3 trillion of cash trapped overseas that companies don’t bring back because of our goofy tax laws. We remove that hurdle so companies can bring that money back from overseas to America.
Is that a tax accountant term, “goofy tax laws,” by the way? Just wanted to check.
Yes it is. It’s the one I’ve been using forever. And so we say you invest that in this country by building out a factory, by buying more equipment, by, you know, doing things that hire people. You can write that off in the year in which it takes place. We call it full expensing. Those are the kinds of incentives we have. And what we find is that is what really does help create economic growth in jobs and higher wages.
Why is it okay to increase the deficit, as this tax bill will do?
Actually I don’t think it will increase the deficit. That’s my entire point. I don’t think this will increase the deficit. I think this will give us the kind of economic growth we need to keep jobs, to keep companies here, and faster economic growth. There’s two things you gotta do to get the deficit. You’ve got to grow the economy. You got to control spending. We need — we have far more work to do to control spending. Believe you me. I wish our health care bill that we passed in the House would have passed because that would have done a, been a good step in the process. But we also had to focus on economic growth, and this is our focus on economic growth. We’ve got to get back to controlling spending, but if we don’t pass this tax law, we will not get the kind of economic growth we can get in this country. And if you want to get the deficit and the debt under control, control spending, grow the economy. This grows the economy.
If you’ll forgive me, Stephen Mnuchin, the treasury secretary, has also said that this will spur so much economic growth it will pay for itself. It will bring in more tax revenue.
I think that’s quite possible.
He said that, but the Treasury Department has been unable to produce an analysis proving that.
Yeah, I really think we’re at a global economic focal point, which is if we do not modernize our tax laws and put American businesses on a level playing field with the rest of the world, we’ll lose more jobs and we will see economic damage occur as a result of it. On the flip side, if we do this and put America at the head of the pack, instead of having arguably the worst tax code in the world, with one of the best tax codes in the world, we will get much faster economic growth. And that faster economic growth clearly produces more revenue, more jobs, more take home pay. That’s a good thing. That’s why I feel confident this is going to make a very very positive difference in the lives of millions of Americans.
Jack Reed, Democratic senator, said the other day that this tax bill suggests the Republicans are not serious about national security because…
I don’t even understand where that would come from.
Here’s where he is coming from. He says the money is needed for national security, and instead it’s going to this tax cut.
I would argue that a stronger economy is one of the most important things we can do for national security. If you want America to be strong in many senses of the word, you’ve got to grow the economy. You’ve got to help people who are living paycheck-to-paycheck. You’ve got to help families who are struggling. You’ve got to help businesses stay in business and be able to compete with their foreign competitors in this global economy. And that faster economic growth, that more confidence in family income and household income, that helps national security. And by the way, if you want to help the military, you got to have a growing economy, so people can pay taxes so we can actually help the military.
Are you really willing to say though, that you are sure this is going to grow the economy so much that you’re going to have money to defend the country?
I’m not willing, I’m telling you that’s what I believe will happen. I’m not going to tell you I’m sure. How can a person say such a thing? I can’t say that. But I do — I am fundamentally convinced. I used to be the chairman of the Ways and Means Committee. I’ve been working on this issue for many many years. I am convinced that at this stage in the global competition we find ourselves, we are on the losing end of global competition. This tax law will do more to help Americans — American families, American middle-class taxpayers and American businesses get ahead of the rest of the world so that we can get faster economic growth.
Mr. Speaker, I want to ask about sexual harassment. You have said that you want everyone here to receive sexual harassment training as a mandatory measure.
Yes, we passed that yesterday.
Then there’s the question of accountability. What, if anything, is wrong with accountability in this body?
Yeah I think, first of all let me back up for a second. I think we’re having a watershed moment in this country. I think this is a defining moment in this country and I think it needs to be a defining moment in this country. I think we’re all horrified at the stories we’ve been seeing unfold in the last few weeks. I think we’re all realizing that sexual harassment in America is absolutely pervasive and it’s got to go and we need to end it. And nowhere more is this important to set a standard and example then elected officials. We should be held to a high standard. So to that end, we’ve been holding hearings on this particular issue for how Congress governs itself. The last hearing suggested we should have mandatory training for sexual harassment for members and staff and interns. We just put that in place yesterday. We’ve got another hearing next week. where we’re reviewing all of the systems. The procedures and the sense of accountability, so that we can review the entire soup-to-nuts system we have in place and where upgrades and improvements can be had. And I believe what we did yesterday was a first step. We have more steps to go.
Define the problem for me. What’s wrong with accountability here? When we talk about secret settlements, for example.
The law was written in 1995 and I think the law needs to be updated and upgraded.
Do you believe that when Congress — when taxpayers pay a settlement for a member of Congress, that the public should know?
I do. I think we’re also trying to get data on this, on the settlements. So that’s one of the issues, which is the settlements issue which is — we’re looking at. Just so you know, a lot of the settlements that people have been hearing from — we had an anthrax — I was out of my office for a number of months. We had anthrax claims being paid because Longworth Building was shut down. I think one of the Senate buildings was shut down. We had some asbestos exposure. So those are claims that are paid as well, so these claims include many many things. What we’re trying to figure out is, because these are confidential, I don’t even know what they are. We’re trying to figure out what claims were paid to whom and what was the nature of these claims. And then, how do we go forward to have a more transparent, more accountable system? That’s the kind of an analysis I’m telling you is what we’re going through right now on the entire settlement question and sexual harassment policy itself, in addition to mandatory training that we’ve now put in place yesterday.
Well there’s two questions there. First, if taxpayers are paying those settlements, should they be secret?
Yes, so that’s — all of those things are what we’re reviewing. So the point is, some of the victims want that. So you have to remember there is — there are victim-rights issues here as well, so this is not as simple as it seems because of victims’ rights. So that is why we’re not gonna just knee-jerk and just come up with something without thinking through its consequences. That’s why we’re doing research, consulting experts and having public hearings on how to address this issue.
Should taxpayers be paying those settlements at all?
Well again, if somebody — there’s asbestos settlements, there’s anthrax settlements, there’s slip-and-fall settlements. No, I think, I have my own views on that. I’ll let those views be made clear very soon.
You said that public officials should be held to a very high standard. Can you define that for me a little bit?
Well, that’s a good question. I think the standard you want is, I want my daughter to grow up in a country, she’s 15 years old, where she is empowered and respected wherever she goes and wherever she works in whatever she does. And I think nowhere should that be more obvious and apparent than working here in Capitol Hill. So I think here in Congress, we should set ourselves to standards that we expect of other people and we should set high standards for ourselves so that we can be role models and set examples, and clearly people have been falling short of that and I think we always have to endeavor to do a better job on that.
How bad is it?
I don’t know the answer to that yet.
How are you going to find out?
I think we’re finding out just like the rest of Americans. We just found out about John Conyers about a week ago. So I think we’re just finding out about some of these things which are quite frankly very disturbing.
You, quite early, called for Roy Moore, the Alabama Senate candidate, to withdraw from the race after a number of accusations were made against him.
That’s because I believe those allegations are credible.