Mulvaney: Most People Won’t Want the State and Local Taxes Deduction When We Double the Standard Deduction

‘If you live in Wyoming and I live in New York ... shouldn’t we pay the same amount of federal tax?’

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PERINO: I do have a question. So, I grew up in Wyoming and Colorado. That’s not — those are not high tax states.

MULVANEY: Right

PERINO: And I’ve been trying to understand this issue about state and local tax deductions. This seems like this could be a big sticking point where it’s the big revenue raiser. That in order to pay for the tax cuts, which I know you care about, but there’s about 40 House Republicans who represent taxpayers in those high tax states, like New York and California, and lot of them in New England, and they’re saying that this is a deal breaker for them.

MULVANEY: I hope it’s not because at foundation here, one of the things we’re driving is fairness. And if you live in Wyoming and I live in New York and we make the same amount of money, our house is worth the same amount of money, our cars are worth the same amount of money, all other things being equal, shouldn’t we pay the same amount of federal tax?

I think it’s yes. The president thinks it’s yes. Secretary Mnuchin thinks it’s yes. Most people think that we should pay the same amount.

That’s not the way our tax system works right now. Right now, if you live in Wyoming, all other things being equal, you pay more tax than someone who lives in New York. That’s just not fair and it’s something we really are hoping to change and we hope the House and the Senate can accept that.

PERINO: But — so, some are saying, though, that those taxpayers in those states would end up actually disproportionately paying for the tax cut bill if this stays in there?

MULVANEY: Yes, and that’s — you have to be careful there, because one of the reasons it’s so hard to do tax reform, and we haven’t done tax reform in this scale since the 1980s, if ever, is that you can always sort of go in and look at one provision and say, oh, this is so bad for this person. I can’t vote for it. You have to look at it holistically. You have to look at the entire impact of the tax plan.

I heard Governor Cuomo in New York said this tax plan would raise taxes of every person in New York. That’s just patently false, when you look at it writ large for example, doubling the standard deduction, most people aren’t going to be interested in their state and local taxes deduction (INAUDIBLE). They’re not going to take.

PERINO: They won’t have to do.

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