tv House Ways Means State Local Tax Deduction Limits CSPAN June 25, 2019 12:32pm-2:09pm EDT
that touched me and you can hear it, is so authentic as he searches for the word to say something to a national audience most of us won't admit in our home. i am prejudiced. >> monday night, heather mcgee president of the public policy commission was on c-span's washington journal in august2016 when gary seven fellow called and she talked about that interaction and her follow-up with mister seventello . >> part of the reason is this is august , we had this sort of racially charged moment with donald trump's campaign, with black lives matter and the police shootings and tragic events all in baton rouge and dallas. it was a time when people felt like all they were seeing on tv about race was bad news and here was first, a white man admitting that he is prejudiced which for people of color, we kind of all said finally. >> sunday at 10 eastern on
c-span's q and a. the house ways and means subcommittee has been examining limits but on the deductions of state and local taxes under the 2017 republican tax bill . fromearlier today we show you the first part of this hearing while the senate is in recess . >> farming communities, schools, first responders and housing values. before i begin my opening statement i'd like to yield to the chairman of the full ways and means committee for his opening remarks. >> thank you chairman thompson and i want to acknowledge you and the other members of the subcommittee for indulging me with time to speak in this important hearing. the leadership of this committee and the working group is invaluable to congress . i want to take a couple minutes of time to express my appreciation to the witnesses who come to share their testimony today.
it's a rare occasion that we can hear from hard-working folks make up our state and local governments. as former mayor of springfield until your firsthand of my experience as to how important all the work you do is. it is from that lens that i view the issue of state and local tax deductions or salt as we call it. if you from a vantage point of someone who's like experience has been a testament to the advancements we've made, services provided, by local governments and what those investments can mean in terms of the lives of our citizenry . children from all walks of life are provided with education, downtrodden neighborhoods, building and maintaining roads bridges and tunnels so people can get where they need to go safely and efficiently as part of our challenge. providing the service for low income families and others rely upon the safety net is our obligation . that is precisely what local government does. mister thompson, that his wife the work that you and mister pascal and the rest of the members here are working
tirelessly on this issue of this is so important. it's the reason the good folks before us have come here to testify, mayors, commissioners, school attendance, you understand what our state and local taxes support. you understand what it means for federal government to undercut the good work you do by imposing a cap on that deduction. foreign policy and we needto find a workable solution . take it from me, take it from alexander hamilton who wrote in the federalist papers 31 quote, revenue is a requisite to the purposes of local administrations as it is to those of the unions. the former are at least of equal importance to the latter. the creation of a strong central government is in order to get efficacy to national revenues for all the resources of taxation by degrees become the subject of federal monopoly and the
entire exclusion and destruction of state governments. we must ensureour local governments continue to provide and prosper and i want to thank all of you on the committee and you in particular mister thompson for living up to the promise you made . >> thank you mister chairman and with that, welcome to today's hearing on how the recently enacted on state and local tax deduction is affecting communities, schools, first responders and housing values. a cap on the softdeduction was one of the most divisive and controversial provisions arising from the deeply flawed and sloppy tax cuts job act . the process that brought us tax law was written behind closed doors and passed a mere 51 days after its introduction. corners and skip important fact-finding hearings like this one today. they and local government leaders and community members were silenced in 2017 and
have been forced to deal with the fallout of the salt since then. today's hearing should have taken place two years ago. but it didn't so it falls on us today to hear from state and local government leaders, education experts and first responders about how the salt is affecting their communities, their work and their decision-making. salt raises a host of issues that delivered to the folly deserved to be fully explored. first, the questions of the concept of federalism that underpins our government. in the united states we have a system in which critical public services and responsibilities are allocated among federal, and local governments. the federal government doesn't aim to meet all of society's needs and its taxing capacity is significant.
for a centrally our federal income tax hasrecognized this threat and has used the salt deduction to provide flexibility to state and local governments. second, assault and ask a massive marriage penalty . $10,000 applies for tax whether a single individual or two married taxpayers file jointly. third, the salt creates disincentives for homeownership and charitable giving. 2017 tax law increase the standard deduction to $12,000 for a single eiler and $24,000 for a couple. increased standard deduction plus the $10,000 means that a married couple would need $14,000 in mortgage interest charitable donations or other itemized deductions for itemizing to be worthwhile. as millions more families with switch over to the standard deduction, they will lose most of the tax incentives for homeownership and charitable contributions.
we all know that homeownership is a crucial way for middle-class families to build wealth. furthermore, charities are extremely concerned about the potential future impact on their giving. fourth, although the direct benefit of salt deduction primarily faulty upper income taxpayers, the deduction supports date and local government budgets. those expenditures or programs with widely shared benefits. when public schools, and protector, first responders and health care programs. and as they strive to balance their budgets,less revenue , local leaders likely will make cuts in those very programs. concerned about the distributional effect of these certainly apply to the republicans when they were looking at other tax deductions and candy alleviated by adjusting tax rates, not operating a century old bedrock aspects of public finance of our
country. finally, the salt on this as i possibly areas. we heard a lot of talk in this committee about the sins of date and local governments that will be pinched by the salt. the charge was made repeatedly back these states and localities were somehow prolific. i think it ever. the cost of living varies so tremendously from one corner of this nation to another that the comparison is truly apples to oranges. every school district in america employs in the garden teachers. every law enforcement agency in the country painted police officers . they need the cable pay rent or mortgage for wherever they live. it is not reasonable to expect a teacher in new york or a teacher in mississippi mississippi earns. the gross income of the average mississippi teacher is the same as the median
price of rent in new york. you can't pay them the same amount. i'm pleased that today's panel is a bipartisan one with elected leaders across the political spectrum. thank you for taking the time away from your heavy responsibilitieselsewhere to help us better understand this issue . with that, i'll recognize the ranking member mister smith of nebraska for an opening statements. >> thank you to our witnesses as well. let me begin by saying this. property taxes and other high state and local taxes on a problem not just on the post but across our country. in nebraska the problem with property tax is particularly acute in rural agriculture areas like the third district which i represent where high land values in concert with a flawed state school funding formula lead to a massive property tax burden on
agriculture producers regardless of the state of commodity prices. while the nebraska legislators not yetfound a solution we can at least be thankful agreement question for nebraska's senators , how can we reducethe tax burden on the rations make our state a more attractive place to live instead of how can we just generate more revenue . >> as we review the impact of tax cuts and jobs act on americans and on our economy, it is important we consider provisions and proposed changes in the full context of a loft. salt and the salt will be used through the prism of lower overall tax rate for family and pc ja. even with this place, most families have lower overall tax bills now and they did prior to pc ja. before dcj the flexibility of state and local taxes was already limited in various ways including under amt and cep limitations. in addition the salt reduction is only useful if your itemized deductions exceed the standard
deduction. in cja we doubled the standard deduction to $12,000 for individuals and $24,000 for married couples. meaning even with a $10,000 on all deductions, a married couple could cumulatively spend $24,000 on and local taxes before they're guaranteed tobe affected . for example, married couple with no children in california i'm just picking on california because of high income tax rates and not because it'syour home mister chairman , but if we look at a married couple with no children in california, which rents is it called when pay more in state income taxes and the value of their standard federal deduction until their income exceeds 300 thousand dollars. per year. $300,000 per year. this highlights one of the biggest problems with proposals to repeal or increase the salt. we know the benefit of such a repeal which is estimated to cost $673 billion over the next eight years with through largely to the highest income
taxpayers and high tax states. more fundamentally, the salt deduction is a matter of fairness the taxpayers across the country. tax reform in to achieve a principle that is straightforward , at least. find the way. those with similar levels of income have a similar federal income income tax and we shouldn't have one federal and contact for the largest areas of new york and another higher rate for nebraska and south carolina. some communities want to have high levels of government spending in their community, that is fine so long as they pay for it. regrets seem to the prior law salt deduction instead would tell communities to spend more because they can ship those costs to the rest of the country. such policy is inefficient and unfair. we know the largest benefits of the salt repeal would go to the highest earth with the average family making 1 million or more per year seeing a tax-cut of $67,000
and the average family over $3 million per year receiving a tax-cut of $140,000 under such a proposal . contrast that with our approach when we drafted the salt limitation. under g cja, a single mom with two kids making $60,000 a year has no federal income tax and the salt was designed to ensure a typical family earning up to $200,000 per year would be held harmless and the average salt deduction pre- gcja was in the $7000 range. the middle-class family making $50,000-$75,000 would receive less than five dollars per year if the salt repealed . and an environment where just last week the majority chose the markup legislation to expand provisions the ipc and deductibility of the child tax credit, this push to enact a giveaway like expanding or revealing is simply baffling. for many ways we could be
working on a bipartisan basis to improvethe irs code . internal revenue code, and why i hope we can engage in constructive conversation today, i struggle to think that thismight be one of them but i can certainly listen and participate. thank you, i yelled back . >> without objection, all numbers opening statements will be part of the record. >> mister chairman, i like a point of order by may. >> i would like a point of order, and that is i really object to the timing of this hearing in that there are two very important subcommittee hearings the ways and means scheduled simultaneously at 9:30, one on the us mca which is horribly important to our economy and the other on salt and you're requiring us to decide which of these is more important to our constituents and i just strongly object to it. it should be administered better and we should be allowed to participate in
both of these matters which are so very important to our entire country. i kneeled back. >> thank you. we have a distinguished panel of witnesses with us today this discussing the important issues of how recent limitations on the salt deduction arm communities, schools, first responders and housingvalues . first i'd like to welcome the honorable david carter, mayor of balls church virginia. he is the honorable bob tina kelly, mayor of dave hill new york. we have kristin leinbach, commissioner from berks county pennsylvania. doctor paul in half, who is the superintendent of over arlington school district in ohio. lieutenant malin mitchell, firefighter and president of the professionalfirefighters of wisconsin . finally, we have nicole
keating who is the vice president of federal and special projects tax foundation. each of your statements will be part of, a part of the record in its entirety. i would ask that you summarize your testimony in five minutes or less. to help you with that time, there is a time in life at your table area you have one minute left, like a switch from green to yellow and then finally to read where your five minutes are up. >> mayor tarter, we will begin with you. >> thank you very much, german thompson, ranking number smith, numbers of the subcommittee . my name is david carter and i'm proud to serve as mayor of falls church virginia. falls church is a small independent city of about 14,000 citizens. updated on the outskirts of washington. our local elections are nonpartisan and i was elected as anindependent. so i come here today without
a political ax to grind . that being said, let me be clear about the issue at hand . i believe it is a poor idea to the salt reduction. it only hurts hard-working families and municipalities like mine. in the church we asked a lot ofour taxpayers, we have to. as a city in virginia where independent of the county , and yet provide the full range of services. excellent schools, a trustworthy police force, well-maintained parks, clean streets. lacking the economies of scale of our larger neighbors and property taxes are permissible. people choose to live in falls church anyway. because i'm proud to say that our town values are the right thing. like our award-winning school system. in recent years we built a new middle school,expanded to elementary schools and early this month for a round on a brand-new high school . all that us we were
renovating our city hall and library. these capital investments are expenses. but our citizen. as a necessary part of maintaining a falls church way of life and investments in ourcommunity's future. the median cost of a single family home in our town is $825,000 . that doesn't buy you a mansion or likely a modest rambler built in the 1950s. our median city mortgage payer lays out more than $36,000 a year . so while our house of income might appear high, when stacked against the imposing cost-of-living , many of our residents to make house payments, take taxes and make andmeet . there are no yachts in falls church, just lots of hard-workingfamilies trying to get my in the high rent district . to the folks that i know are two income families who serve their country the working government or the military . and what the best education possible for their children . i'm not a wealthy man.
i've discovered that being a locally elected official is not a financially lucrative career but like many of my fellow citizens i face the prospect of paying thousands in added taxes because of limitations in the salt deduction. because of you i care about the tax burden of my constituents. even before this i thought our community was at the top end of its taxing capacity. the number one issue i hear about when campaigning is property taxes, and indeed they are burdensome. the onus of that hundred $25,000 house was to pay over $11,000 in property taxes this year alone. youhad in virginia income and car tax, that same citizens payments exceed the $10,000 . what does that mean? it means tax dollars that could have gone to the city are now going to the federal government and there's less money available for essential local services like schools, police and fire protection. a new cap on the salt deduction double taxes citizens on these payments
and penalizes workers in high-cost areas like my city where wages and income are high but are fully matched by the cost. the recent salt limitation as the look and feel of another unfunded mandate whereby higher levels ofgovernment can claim they've reduced taxes but in reality there merely shifting the burden downstream . that clement was built in the 1950s with grants of three percent loans from federal and state governments. today we're on our own. local taxpayers are getting no assistance from the federal government and worse, with thelimitation of salt deductions, taxes have been effectively raised . back home we agree with thomas jefferson who said the government closest to people serves the people best. in falls church we balance our budget and provide
necessary services in a cost-effectivemanner. local government is where the rubber meets the road. we should not be at odds with the federal government but working in close partnership to create better outcomes for ourcitizens . repealing the salt did deduction would be a step in the right direction .iq. >> mister dinatelli, you are recognized. >> i'm mayor of a small village in long island called bayville. i serve as a volunteer, an unpaid position. you are also not elected by political parties. although i must admit to being republican. i'd like to thank chairman thompson, ranking member smith and members of the subcommittee and congressman swati for the opportunity to share with the committee the hardship caused by the limitations of the salt deductions . congress's decision in 2017
to limit taxpayers state and local tax deduction as it millions of families in new york with a one-two punch. of higher taxes and lower home values. this is harming the village bottom lines and hurting our ability to provide key services. the perception that salt deduction is only affecting wealthy families is false. the village of basil located on long island has 7000 residents that are mostly middle-class hard-working people. who chose to live in bayville because of its proximity to a long island sound and beautiful oyster bay, summer home of our 26th president teddy roosevelt. it's a three mile peninsula is home to average citizens. the vast majority of homeowners need to household incomes to afford to live
here. it is not a haven for wealthy. another huge attraction to our community is our well-regarded school district that cost the average taxpayer over thousand dollars a year. >> we may soon be faced with reducing local taxes and make up the federal tax increase caused by the salt deduction limitations. which would have a devastating impact on the services our customers depend upon. combined with county in the village taxes, the average modest home has a total tax bill of $20,000. a great many of our residents are in flood zones require flood insurance in order to obtain a mortgage. the cost of flood insurance averages $2000 annually. the median income for single persons in our village 68,000
$500. the median income for a family is $77,800. assault deduction limitation disclosed many residents to rethink staying in the village where they grew up or have raised their children. as a result, we have over 60 homes listed and as for sale on multiple listing services in long island. and as a 30 percent increase in 2017. the typical resident has had a difficult time balancing personal budgets and maintaining property and saving for the future. indeed, a recent newsday article documented the fact that most young people are being forced to relocate. the inability of residents to
fully deduct all property taxes is certainly something we've been grappling with since the change was made. limiting assault deduction will have long term consequences for economic health and vitality in my village. the state and local tax deductions along with the mortgage interest deduction are vital for homeowners in maintaining solidfinancial foundations . limiting those deductions for homeowners financially and it may now be negatively impacting the housing market. home sales now stand any chance of defining and home values may soon follow. only further eroding our tax base and reducing the ability of many family and my community to meet their daily day-to-day needs. restoring the salt brand to
its previous standards would be a huge help to our residents more interested in the interest subcommittee to restore previous positions to the original program. and i want to show you a in a little bit, i have left a few homes in our village listed at like $900,000. these are nowhere near palatial residences, these are the typical residents and this is why we must pay to live in this community. so it's not a question of republican or democrat. it's a question of fairness. i'm a registered republican and i actually voted or president trump. this salt limit is totally unfair, to villages like mine and others throughout the country. thank you. >> thank you very much, mister whitelock.
>> thank chairman thompson and ranking member smith for inviting me to testify before this committee today. my name is christian leinbach , and i'm an elected county commissioner from brooks county pennsylvania. also here today representing the national association of counties and 3069 counties across the country. the state and local tax reduction is an integral part of the tax code. and i'm glad to be here today to urge congress to fully restore it. but history of assault deduction establishes a clear precedent for the necessity of the deduction and dates back to the principle set down by the nation's founders . in federalist paper number 31 alexander hamilton argued that the taxation power of the federal government should not intrude on state and local taxing decisions. to ensure local autonomy and that state and local decisions would be protected,
the first federal income tax included salt deductions. this was true growth of the civil war income tax in 1862 and when the 16th amendment was passed in 1913, establishing the original tax code. in both cases, there was a fundamental understanding taxing dollars already paid was double taxation. >> .. it is vital for counties given the wide variety of services we provide to our constituents. we support local law enforcement and fire department who put their lives on the line for our communities everyday. counties of alona maintain a wide variety of public safety infrastructure and we are the first responders when disasters
hit. we are also major stakeholders in infrastructure development across the country. collectively we own 45% of american roads and nearly 40% of bridges. we are stewards of the public health and well-being operating hospitals, nursing homes and jails across the country. all of these efforts rely on local tax dollars, primarily from property taxes. however, 45 states have already cap the amount of property and sales taxes counties may levy. the federal governments decision to cap or eliminate the deduction would prevent yet another unwarranted strain on county resources forcing us to eliminate some of these vital services we provide. after all, counties operate on balanced budgets. any reduction in tax revenue must be offset by an equal reduction in services. at the local level this could mean real consequences. reductions in police or fire
personnel. delayed infrastructure project or postponed affordable housing project. this is particular true for public education as the majority of our property tax dollars are earmarked directly for k-12 education. i would like to make one final note before i conclude. cap being the deductions will have a particular impact on the middle-class and homeowners in particular. when an individual or family is unable to fully deduct their state and local taxes from their federal taxable income the result is an exposure to double taxation. this tends to be most true for homeowners who pay property taxes on top of their state income taxes. this is particularly true in berks county. in 2016 the latest year for which data is available, over 60000 individuals and families in our county filed tax returns utilizing state and local tax deductions.
91% of those filers made less than $200,000. according to an evaluation of irs data, the average salt deduction of burke county in 2016 was above the $10000 set by the recently enacted tax cuts and jobs act. this means many of these filers were potentially exposed to double taxation during the 2018 filing season. to add insult to injuries, businesses and landlords can still deduct all of their state and local taxes as business expense. meanwhile, middle-class families must face down double taxation. of course when taxpayers see their taxes go up but they turned to the level of government closest to the people for relief as they do with other issues in the community. under this new pressure, counties are having to reconsider many of the vital services we provide.
chairman and ranking member, i appreciate your attention to this issue today. this is not a blue state or red state issue, rather the salt deduction is a part of our governmental system counties asked congress to restore the full deduction as soon as possible. thank you. i will be happy to take questions at the right time. >> thank you very much. doctor imhoff, you may begin. >> chairman thompson, members of the subcommittee. it's an honor to be here and offer testimony in support of removing the cap on the state and local tax deduction referred to as salt to be. my name is doctor paul imhoff. i am the superintendent of the school district in suburban columbus, ohio. i have been an educator for 29 years and our district serves over 6000 students in a community of over 30000 residents. we are widely considered one of the finest school districts in the state of ohio and even though we are a bill out
community, enrollment projections call for growth of almost 20% in the next decade. in short, we are a community that is attracting families due to the quality and reputation of our public schools. i am here today because my district is beginning to see how this all d cap threatens our ability to maintain local economy over how we raise local revenue. a major source of our funding. in fact, over 80% of our funding comes from local property tax levies. our school district, like many in ohio relies on property taxes to fund our schools. we find that we need to ask for a new property tax levy every 3 - for years because our levy collections are fixed and are not allowed to grow with inflation. the full deductibility of property taxes has long been a key factor passing these levees and funding our schools.
deducting state and local taxes was an original components of the first federal tax code and that deductibility directly impacts how willing and able local taxpayers are to support changes and local taxes. without the ability to deduct and avoid paying double taxes and increase at the local level is felt twice. that is not something our taxpayers will readily support. in many of my colleagues have followed this debate and have heard the narrative that salty is a blue state issue or an issue that only impacts states on the coast. i am here from ohio to stress that this issue is not a red state or blue state issue. it is a public education issue. public education is the foundation of our republic and the overwhelming majority of funding for public schools comes from state and local sources. the salty cap threatens to erode our ability to raise those ones at the local level which could begin to look at local districts
at the resources needed to educate our students. i am concerned that the unintended consequence of this change will be to provide additional revenue to the federal government at the expense of local school districts. you cannot allow this to happen to our students. the other argument i have heard is this issue only impacts the wealthy people and they can afford a tax increase. again, this is not correct. the median home value in our district is $357,000. the property taxes on this median home value are almost $10000. meaning property taxes take the average resident of our community to the new salty cap before even factoring in state taxes and local income and earning taxes. this changes significance for average families in my district and in districts across the state of ohio. if you visited my community you would find beautiful tree lined streets filled with families who
care deeply about one another and invest heavily in public education. if you have heard of upper arlington you may know we are considered an affluent community. that is correct. when i shared my median home value you may think someone who owns a 357,000-dollar home can afford a tax increase. but again, this is not correct. our community is not one dimensional and we have more families making financial sacrifices to move to our city to place their students in our schools. these are families living paycheck to paycheck with less flexibility in their household budget to absorb tax increases. this change in tax law has made an increase in federal taxes when they do not have the margin to pay for such an increase. i'm concerned these families will not be able to afford future school tax levies because of the increase in federal taxes. i urge the committee to restore the full deductibility for state and local taxes and avoid the
negative consequences for average americans and their children. thank you much. >> thank you. senator mitchell you may begin. >> thank you chairman thompson. ranking member smith and distinguished members of the subcommittee. i am state president of the special firefighter of wisconsin. also a 22-year-old active firefighter and a new tenant with the city of madison. i appreciate the opportunity to appear today on behalf of the national association of firefighters. we have invested 316 thousands and ems personnel. i come before you today to offer my testimony on the federal mandated cap of state and local tax and its impact on firefighters, fire departments and fire safety. at its core the hearing is about fairness. fairness for local public service agencies like fire departments and schools to deliver the best possible service they can. fairness for communities to decide how best to deliver local
services. fairness for taxpayers who are being double tax. as the lieutenant with the city of madison i see firsthand how local governments are forced to tighten their belts and the impact it has. i hear from federal fellow firefighters every day who have to do more with less. shackled by inadequate staffing, insufficient training and lack of health and safety measures. we cap arbitrarily the tax the threat is not only impacting the fire service but the lives of the communities we serve us as well. fire departments as you are well aware and service we provide are drawn from state and local property and income tax. essentially investments that give first responders the tools they need to get the jobs done. in wisconsin we already experience significant revenue limitations because of downturn in the economy and a reduction in our state revenue system. last year in 2017.
the city of milwaukee had to close down six wire stations across the city because of inadequate funding. in two weeks ago a menomonee falls, small city north of milwaukee they had zero working fire engines in the city. imagine that. you call 911, you get crickets. a neighboring community has to come and help you. as a result response times rise putting citizens help and lives at risk. this is not unusual in wisconsin. it's not unusual across the country. as firefighters we are asked to respond to folks on the worst days of their lives. when people are at their worst we have to be at our best. we cannot be at our best if we don't have adequate staffing, adequate equipment or training to do so. folks always say whenever you testify you make it personal. will it actually is personal because what if it were your family needing help. what if it were your mother,
your daughter, brother or sister. you get my. it is personal. we are asked to do more with less which quite frankly is impossible. a federal cap puts more financial stress on municipalities charged with providing critical public safety services and will further exasperate the dire situation. this is not a political game. firefighters and citizens in the state of wisconsin, this is a matter of life and death. cap in the salt department affects fire and emergency response and unfairly penalizes hard-working middle-class taxpayers. along with that to make sure that they're not unfairly taxed twice. this scheme is deeply harmful to middle-class taxpayers and many of the same communities this is not solely a problem on the coast are cost of living states. taxpayers in all 50 set states
benefit and middle-class workers benefit makeup the clear majority. the deduction to those living in urban, suburban and rural communities across cap an assault deduction clearly hurts services is backed up on the backs of firefighters. the damage is done but there is an opportunity to mitigate the situation. in my opinion congress must fully restored the deductibility of state and local taxes. the representative has introduced legislation to do just that hr 1142. by passing this bill congress will restore the full ability of state and local government to deliver vital services and eliminate double taxation. in closing, there is no doubt that the current cap on saul deduction impairs ability of local governments and will fund fire departments and other services. it will make my job to protect the city of madison, wisconsin
less harder. i urge congress to do his job. restore the full deductibility of state and local taxes. again, i think the subcommittee to for the opportunity to testify and i'm happy to answer questions. i can't believe i kept that under five five minutes. >> thank you. >> chairman thompson, ranking member smith, members of the committee, thank you for the opportunity to speak to you today about the recent changes to the state and local tax and its impact on communities. the tax foundation is the nations oldest organization dedicated for economic sound tax policy at the federal, state, local and global level we are a nonpartisan pfizer one c3 organization. for many years tax research have been guided by tax policy. taxes should be neutral to economic decision-making.
they should be simple, transparent and stable. today i have been asked to discussed recent changes made to the assault deduction within public law 11597 known as the tax cuts and jobs act. they passed in 2017 overhauled the federal tax code. it lowered tax rates and expanded the standard deduction of child tax credit, limited the impact of the alternative minimum tax and limited those deductions including assault deduction. on that most americans had a tax cut. limiting the saul deduction was a step to finance broader tax reform and help maintain progressivity within the tax code. prior to tax reform more than 90% of the benefits of the saul deduction occurred to those making more than $100,000 per year or the top 20% of taxpayers. the impact therefore is concentrated on high income
individuals. the assault deduction is also discussed as benefiting residents of high tax states. the analysis appears the real impact, it is better understood as benefiting high income individuals living in expensive housing and high tax jurisdictions within high-tech states. the benefits are not monolithic across the state. even in high-tech states. the mean deduction and in westchester new york is seven times out-of-state of new york. in other words, the deduction and offense are focused in areas of high levels of income well-being. not just high-tech state. the tcg a limited the assault deduction in the joint committee estimated it would raise $668 billion over the next decade. 65% of americans were projected to have lower taxes in 2018. those impacted by this all caps
benefited from other tax. first, they received relief from other implicit salt limitations. second, some quick itemizing is switched to the standard deduction. filers also benefited from lower tax rates, the expended tax credit among other changes. to the small group with net tax increases. an estimated 6.5% in 2018, it's unlikely it was solely due to the cat. is often due to interactions with other provisions such as the repeal of personal exemptions. very few had a tax increase only due to the saul cap. those i did read the high end of the spectrum. repealing the cap would significantly reduce revenue. an estimated $700 billion over the next decade. with that benefit going almost exclusively to the top 20%. the tax code will be less
progressive. it's frequently cited as impacting state budgets. that is overstated. stays on increase in revenue because of the conformity of the federal tax code. states like georgia, virginia, new york have estimated more than a billion dollars in revenue because of it. this all caps is also highlighted for its impact on housing value. first, the impact on housing values is not due to sell cap in isolation. mortgage interest paley's the role. to the extent they do impact housing values the impact on the one middle income households is overstated. there are important considerations. first, the limits are progressive. only high income individuals can purchase homes that cost more than $750,000. second, its impact would be limited.
less than 1% of counties in the united states have median home prices exceeding $750,000. third, any impact on housing values would be beneficial to many particularly first-time homebuyers. limiting deductions and exemptions but in the context of the tcg a, limiting the saul deduction was a desirable and strong policy choice. >> thank you very much. we will now proceed under the five minute rule with questions for the witnesses. i will begin by recognizing myself for five minutes. lieutenant mitchell, as a result of the turndown in 2008, state and local governments were forced to make difficult choices about what government services to fund and at what level to fund them. many of these governments are
still operating under those. can you speak to how that affects first responders and the ability to adequately provide critical services to the public especially with the new salt cap. >> it greatly expects affects states on budget the majority about 50 or 60% on average is police and fire safety and keeping citizens of a particular community safe. we have seen that a lot in the state of wisconsin. the first thing to cut normally is staffing. what we have right now in the city of madison they tried to have at least four people on the fire engine. in order to do her job safely and efficiently. they have to keep ourselves safe
would it normally happens with staffing cuts they're putting the lives and community at risk in us, as well. were seeing on in wisconsin where we have 0% levy increase. as well as as i spoke to before, shared revenue being cut and hasn't been raised in decades. unfortunately i have been doing it 22 years. retaken civilians out of burning buildings. i can tell you that we cannot do that we had three people on our fire truck as opposed to four. >> the salt make substantial investments in the infrastructure, schools, first responders and other important programs.
mayor, did you know that the median income for a family is $78800. >> that is correct. >> according to the irs data from 2016, than half of the tax return from your zip code itemized and are likely to be harmed by the saul cap. in your opening statement you noted that this school system because the average taxpayer over $10000 per year. can you expand on some of the other important services funded by your local tax system? >> county wise, yes. we have a number of facilities, sport facilities, auditoriums, some incredible beautiful beaches and a first-rate police department in the county. the village itself, we run with the department of public works
water department, we fund a local free library cost is $500,000 a year just to run the library. we have public beaches and we have a senior community center and probably that's about it that i can think of at the moment. >> thank you. mr. leinbach, you mentioned that 70% of counties are considered rural in a state like california with large cities and rural areas, state funding is critical to all counties whether urban or rural. can you discuss the salts cap and how it impacts rural counties? >> again, the impact. >> the impact is only now just
being felt because it only impacted the 2018. the core issue though is the federalism case that when you look at the issue of salt, goes back to the respect that federal government should not have tax policy that ignores the states and local government. that is why i cited federalist paper number 31. the one you look at our county, burke counties both earl and urban. in our particular county, 61% of our filers, 90000 people and i am forgetting about the number here, anyhow, they file for state and local tax deduction of over $10000 in 2016.
that is the latest year that we have data. our number one industry is agriculture in our county. we are very concerned about the impact on our county and other rural counties are saying the same thing and schools are the number one source of property tax funding is going through k-12 schools. >> thank you. do you think that middle-class taxpayers that were accustomed to taking a sizable charitable deduction for their annual giving or surprised to find that in 20018 their charitable deduction was limited due to the limits on other itemized deductions and the increased standard deduction? >> i think many are often uncertain about the components of the federal tax code. while they may have been limited slightly that's because they are taking the new expanded deduction. on that they were better off than they had been under previous tax law.
>> what you think happens to charitable giving in 2019 for middle-class taxpayers who have now experienced the limitation from this year? >> it will be interesting to watch. we saw a slight increase that could be related to the fact that overall particular for lower income individuals their charitable giving is not motivated by tax policies but rather a desire to help their local churches and communities. >> to have the same feeling on the possible impact of charitable giving? >> i think it's a possibility. until we see the data we will not know that. >> you think the actual loss of the salt deductibility will impact? >> i believe it can. >> thank you to our entire panel. i appreciate your service and sharing your perspective. mayor come again thank you for
your service. prior to coming here i served on the city council of a similar size community in nebraska. no public beaches but certainly i appreciate the challenges of operating a village in a small community such as bayville. as i was reviewing your testimony a few number stood out to me. as you said in your statement the median income for single person is 68500. for a family at $77800. if the combined taxes on the average is $20000. >> it doesn't leave you too much left over. >> i hear you. for families with these income levels we would expect the federal income tax liability to be minimal. for example a two parent household with three kids and an income of 77800 would have tax liability of about $75. can you help me square those numbers of how how can someone?
>> i can certainly get the information for you. i don't have an accounting background. i come from a retail background. i can answer that question. >> okay. i look forward to more information. i struggled to think of someone making $78000 could afford a horn, a mortgage not to mention the taxes of $20000 per year given that is the midpoint. does that strike you as -- >> the numbers i'm giving you i have gotten right off the internet as published numbers. other than that i really can't comment. >> okay. ms. miss katie, i thank you for your testimony. i think that you have obviously processed the bigger picture of the tax policy and where we were
before, where we are now and certainly what you think is good tax policy. i would share many of the same observations. you address the way in which various states conform with their roles in the federal tax policy has led to a broadening of the base in those thanks to the t cja. the associated revenue increase actually resulted from that base broadening. new york estimated an increase in revenue of about 1.1 billion. that is billion with a b, for fiscal year 2019 thanks to the broadening. at the same time you noted that conformity was not impacted by cell deduction. can you elaborate? >> in general, states use the tax code and makes it easier for filers when their filing their tax return they can literally
copy numbers on their federal 1042 their state return. it makes it easier for the states to administer the tax code because they can rely upon fire federal definitions et cetera. so we can think about this at a very basic level as lowering tax rates in broadening the tax base which is what i want you all to do. but, states don't conform to the tax rate at the federal level what has happened because of the federal actions under the t cja, state taxes have become broader meaning states are generating more in revenue. many states have forecasted revenue. many of these states have said they would be better off on a revenue picture. what some have therefore decided to do is actually reform their state-level taxes. my current state of virginia has cut taxes for individuals within the commonwealth because of
newfound revenue of tax reform. >> with the gentleman yield? >> my time is limited. i apologize. go ahead briefly. >> i just want to.out property taxes in new york state on long island is some of the highest in america. when they were pointed out the $20000 tax bill, that's a real number. that's why this is a crushing blow to places in other communities and downs town state new york. >> i just hope that we can continue to focus on these issues. the standard deduction, and a show of hands among our witnesses, those opposed to the standard deduction. anyone in opposition? >> thank you. thank you mr. chairman. thank you for conducting this
hearing. i don't know anybody the truth of the matter is, president obama 25% for manufacturers. my colleagues on the other side take justifiable pride in the fact that they passed an enormous tax cut. what they are not frightful love is the fact that they did it without any kind of public hearing. the pictures on the wall over there, it did just the opposite. we met in groups and were able to talk this through so we would not end up in the god-awful situation that we find ourselves today. and i say god-awful depending on the state you live in and the ramifications that the tax code has had on you. in my state, small state, 750,000 people avail themselves to deductions.
the average deduction is $19000. so, the 10000-dollar cap is of little help. it's not much of a consolation for them to understand that their extra taxes went to pay for 83% of the tax cut going to 1% of the nation. and so, you can certainly appreciate and understand how perplexed they are as witnessed by the number of letters and anecdotes. i would like to submit for the record several letters that i have from citizens in connecticut who feel they have been unfairly treated and something that was pointed out bar witnesses that has been in effect since the civil war and amounts to double taxation. but the rub is, not only is it double taxation but when you are barely holding on and what you
are doing is augmenting a tax cut for major corporations that is permanent, while individuals expire, this is where the problem lies in why your testimony today is so vitally important. we cannot continue down this path, especially with states that take the responsibility to deliver education and public services whether it is firefighters and police and emergency medical teams to across-the-board what individuals have needed to make their states continue to grow and operate. mr. leinbach, in your testimony would you agree with that this has the minimalist impact in your state?
>> again, i think we are arguing personally the wrong issue. it's not about winners and losers. it's about the fundamental principle of the cell deduction. the cell deduction is not something that was created 1020, 30 or 40 years ago. it goes back to the foundation of our country because it goes back to the foundation of federalism that respects the taxing authority of states and local governments. it was reinforced in 1862 by lincoln civil war tax. it was reinforced again in 1913 by the 16th amendment. if we did not have the salt deduction in place during world war ii and during the end of the 1970s when we had extremely high federal tax rate, we would have had effectively people paying in excess of 100% of their income in taxes. the u.s. she was in about red and blue were winners and
losers. it's about whether or not the foundation of our country relative to the cell deduction in respective states and local government. >> you characterize as double taxation. >> absolutely double taxation. >> when you get double tax you take a very personal. if you are double taxed in a blue state, coincidentally or not, i don't disagree with you. it's not about blue states and red states are democrats and republicans, it is about what is fair for the country and what is fair in terms of the low that people are carrying in terms of taxation at the local and state level. also known as, that is why we have the permission to begin with. so, to cap bid depending on where you hail from the country and what kind of income, schoolteacher and a firefighter in my district make well over $100,000 when you combine their incomes together.
then they end up having to pay additional federal taxes let alone not only see a tax break they pay additional taxes and of course that goes to helping out major corporations. i yield back. >> your time has expired. we go to mr. rice. >> i think this hearing today, we have spent the last year and half with my friends on the other side of the aisle pulling their hair and cashing their teeth about how the tax cuts and jobs act so much of the benefit went to the people who are wealthy. 44% i think went to people in the top 10%. if you look at this, there's an article in bloomberg just yesterday that said 52% of the benefit every pruning repealing the salt deduction would go to the top 1% of wage earners and
92% will go to those earning over $200,000 a year. i represent south carolina and the coast in rural areas. three of my counties are very rule. the majority african-american population. excuse me. south carolina is 57% african-american. median wage is about $30000 a year. 30% of people live in poverty. what you're presenting here is a false narrative. what you're saying is that you are taking away you are raising taxes on folks that live in these wealthy communities. the truth is, somebody has to pay the taxes. you don't apply to this person it applies to that person. if you restore the salt deduction, my folks are not getting the salt deduction. they're going to have to pay more taxes. now, you live in this federal bubble of federal employees and average income is $120,000 a
year, four times what it is in south carolina and your average house cost 15 times as much as folks in the county. so how my going to explain to my rule african-american folks that they should subsidize housing in fairfax virginia. how do i do that? >> i would say this. this is a high rent district. it's an expensive place to live. >> they already subsidize that by paying taxes because tax dollars go to pay these people they are federal employees and now you want them to subsidize the cost of living, i think that's absurd. >> you setting your testimony that people move to your community because of the beautiful area. that is wonderful. i'm glad. i live in a beautiful area too. i live in myrtle beach and i went do anything to take away from that. but, what you are asking me to
do is tell my folks in the poor, rural, black folks of south carolina that they need to. were going to restore this tax deduction and they have to pay it. so, they're going to be subsidizing these people because you don't want them to pay in long island. we want the federal government to subsidize that and pay part of the true costs. how do we explain that? had explained to someone whose income is one fourth of what it is in your district. one fourth. how do i explain to them that they should subsidize part of the cost of living in long island? in this situation? >> i only know what my only community is suffering and i realize you have your own issues in south carolina. these folks that i represent and are trying to protect, i only know them and i know them to be hard-working people and i don't believe they're getting a fair
shake. >> i only have a minute left. it's fascinating to me that folks on the other side of the aisle try to paint this picture of the working guy one of fact what they do is they put the boots on the deck. it's ridiculous. mr. mitchell, do your firefighters understand, what are your average firefighter make? how much money? >> about 45 or $50000. >> they're not going to get any benefit. does he understand that they'll pay more taxes to get this tax break back to rich people? 99% of your firefighters are going to get not one benefit. they are going to pay more taxes and rich people are going to pay less today's understand that? >> every situation is different. the firefighters do it for love and sense of duty that we have tour community. we don't never profess to be tax professionals. we want to get paid for work but
when you're married and you have two incomes are doing okay. >> i'm sorry. i have 13 seconds. >> i yield my time back. >> the thing is, i don't think they understand that this hurts them. that they have to pay more taxes and wealthy people pay less because of this i yield back. >> link you to all of our state and local officials were coming forward today to share the impacts of this republican tax law. republicans here are big on state and local rights when it comes to denying something, but when it comes to providing the resources that you need to do your job on this deduction for state and local taxes they take away a different.of view. i don't believe there is any doubt that this salt deduction cap was a political attack on states controlled by democrats but in fact, as your testimony indicates, it has the impact of
attacking state and local governments that simply believe it democrat or republicans for being responsible and delivering a reasonable level of public services to assure quality public education, adequate healthcare law enforcement and fire services. the republicans were sure that the salt deduction with the local taxes was maintained for the multinational corporations we got many of the benefits that were provided under this law. i spoke out against the salt provision when it was considered. i come from the state of texas. even there, there is some impact from a very high and aggressive property taxes. taxes is basically state that doesn't believe in providing a responsible level of education and public services. i understand that when you make these kind of investments you have to pay for them and have
this problem. the question is what we are going to do to fix it. i am concerned that as i understand from the testimony this morning and from the reports we have that full repeal of the salt deduction would cost about $670 billion is that right? >> yes. >> anne's, we have already had republicans add to.treat $3 trillion of debt toward tax law. we are looking under president trump at about $1 trillion a year of additional debt every year for the foreseeable future. last week, these guys suggested that the way to deal with this problem in the amendments they offer to a bill we had was to add another three or $4 trillion to our national debt. i believe every economist that has looked at this objectively realizes that it will slow our economic growth if we have that much in the way of debt.
i also was one of the democrats who voted against a democratic proposal that i very much support to expand the earned income credit, the child tax credit to help working and middle-class families because it was not paid for. and it cost a fraction of what it cost to restore this provision. at the same time, with all of the excesses of the republican tax law, there are a wide range of provisions that could be altered in order to compensate were restoring some or all of the salt deductions. we have got the tax rate which was lowered more than cooperations asked for. we have a provision that was added after the conference committee that lowered the taxes for the wealthiest people in our country. we've got the foreign outsourcing provisions, we have the donald trump provision that was added after the committee to provide additional pass-through.
there are many places we could look at to pay for this. i do think that it is notable and i believe you had some version of this in your testimony that the joint committee on taxation yesterday said that full repeal in isolation would give half of its benefit to americans that earn $1 million a year or more. i don't believe we ought to be simply rewarding the people that are ready got rewarded by the republican tax law with yet another tax reduction. so, we have got to find a way to fix this that is fiscally responsible and that recognizes that impact. if congress is not willing to muster the will to fully offset the $670 billion price tag, then we have to find other reforms in this provision to assure we do it in a fiscally responsible way. every one of you as a local official have to balance your
budget. that is something long ago forgotten in the congress. i believe we should respond to the concerns that all of you race this morning that are very legitimate having been politically targeted. but, we have got to do it in a responsible and fiscally prudent manner to ensure that we do not make matters even worse. thank you very much for being here. >> thank you. >> thank you mr. chairman. i want to thank the witnesses for being here. we have heard a lot of testimony today about how the salt deduction purportedly affects the so-called middle-class. i want to just reference to articles. the title of this article is from bloomberg.com from june 24 this week titled salt cap repeal would be a 40 billion-dollar windfall for millionaires. it goes on to say they're getting rid of the so-called salt cap would lower the burden for household by lease
$40 billion or 52% from the nonpartisan joint committee on taxation. i would like to submit that for the record. >> without objection. >> second article from politico titled new jct analysis shows salt cap repeal benefits. this analysis is bad news for democrats goes on to say who have betrayed this limit were pretrade the limit imposed by the tax cuts and jobs act as a hit on average americans. so objectively into different articles and by the nonpartisan joint committee on taxation it talks about this and benefiting the rich. now, we have heard today there is lots of definition of what constitutes. >> would you like to enter that for the record? >> away. there is lots of definitions about what constitutes the middle class. apparently anyone who doesn't own a yacht qualifies.
but i want to ask, with the income levels of salt deduction limitations in addition those who have an overall higher tax burden under the tcg a as a result of the limitation. >> thank you. we can actually look at data from the internal revenue service to figure out where the income threshold are for the so-called middle-class. perhaps we defined the middle class as being those between 25 and 75% of median income. what we find is that the top 25% of taxpayers are . the top 10% have income of 140%. the top 5% have income of around 200,000. many of these examples that have been talked about are talking about folks that are so-called middle-class, according to irs definitions. along those lines.
>> yesterday a group penalty considered on the left. distributional he is clear. it benefits functionally those making more about $100,000 year. >> i didn't hear anything from the witnesses about what the tax bill has done for the economy. as we sit here today we arguably have the best economy we've had in 25 years. 75 million unfilled jobs. we have moved 5.4 million people off of food stamps. the lowest unemployment in 50 years by all standards. closed unemployment in the african-american community. in the hispanic community, and for women with disabilities. 3.2% growth and on track for another 3% growth.
private sector wages are up across-the-board. more people working in this country than ever before under this tax bill that was passed. you look at the stock market, 401k's, the long-term outlook for the economy, it is strong. by every statistic. i think that needs to be stated. i appreciate the witnesses being here today. i will yield my last minute mr. rice. thank you. >> mr. imhoff, you said earlier that people moved into your wonderful school district and i'm glad you have the school districts with education as a top priority. they moved there and they sacrificed when you look at the tax liability and give all these millionaires a tax break you are raising taxes on the rest of
your saying what your people are sacrificing to move to that wonderful school district you're asking my people in south carolina to sacrifice for your wonderful school district. >> thank you -- what i'm saying what's happening in our school district is we have hard-working americans who are sacrificing to live in our school district were being hurt by this and double tax. i am asking all of you as our leaders to find a way to fix that. >> somebody has to pay the tax taxes. >> thank you mr. chairman for your commitment for the ongoing effects lieutenant mitchell, i want to talk about the impacts on local communities.
you are from wisconsin and i am from california. the points he made in your testimony or what i hear every time i go back home to california. can you please tell us what would be the long-term impact of the cap on the salt reduction to your department if the law stays the same and is unchanged? >> the fear is that if this continues the state to local municipalities will have a way to cut their state and local tax. if there being double tax. as i said earlier the majority of our work from our salaries, staffing, equipment, training, is derived from state and local taxes. once we see state and local taxes being cut we know what is going to be the ripple effect. that is, essential services would be cut. as i spoke earlier first thing cut is the staffing. that is the highest cause for any department. once you cut staffing then you're cutting safety for yourselves as firefighters and ems personnel. more importantly, safety for the
citizens of any community. that goes for any community. >> what coach is your commitment to public service. people in that line of work are not in that line of work to become millionaires. hard-working folks like firefighters in wisconsin are being squeezed by this policy. the general public is put at risk by the policy. if you don't have the equipment in the staffing you need to provide those emergency services. i want to talk a little bit about the issue of fairness. because as was presented earlier, individuals got to their salt capped at $10000. the average salt deduction and my district is $18000 and i did not represent the wealthy district. but, businesses and corporations can claim the full salt deduction. does that seem fair to you
lieutenant mitchell? >> i am not a tax professional but no. that does not seem fair. and mr. imhoff, does does that seem hereto? >> no. >> mr. -- >> no, but i think it's that way because salt was never taken into consideration as a foundation piece of any tax policy. if it had we would not be talking about the idea that if we reinstate full salt today, that millionaires would be getting benefits. it should have been a foundational piece and any tax bill. >> thank you. does it seem fair to you that one person gets to claim unlimited and the rituals have a cap? >> hardly. >> mr. carter? >> no. >> what about the fact that the corporate tax rate was cut 14% and that was a permanent cut. yet on the individual side the tax cut was about 3% and that is
not permanent. does that seem fair? does anybody think that is fair? let the record reflect nobody raise their hand. commissioner leinbach, can you delve a little bit more into how this salt limitation impact budgets at the county level in the ripple effect it will have on services in your county? please be brief. we have a minute and a half. >> i would reiterate that until we see the full impact the impact from 2018, we can't do anything other than speculate. i shared that in my testimony are ready. >> thank you. i want to push back on this notion that somehow folks in marion county and are paying more taxes so that others could potentially get a full salt deduction. i just want to remind everybody and our witnesses that high income states like california where the high cost of living states, we get back about 72
cents for every dollar we pay into the federal system. my guess is folks in marion county south carolina probably get a lot of government benefits and subsidies in rural communities that typically tends to be how the tax system redistributes money from higher income, higher cost of living states to lower income more role counties. i don't think it is a case that because our middle class families in her high cost make a lot in comparison to those rules counties. we also have higher costs in terms of housing, food, transportation. it is not that one side benefits or subsidizes the other. i just want to make that. with that i yield back. >> thank you. mr. aronson you were recognized. >> thank you, mr. chairman and for getting me in advance if i butcher your name. i would like to go down the
line. mayer, by the way i lived in falls church in a city and i enjoyed my time there. would you say that the lord shown employer it in 50 years is a good thing for the country questioning. >> yes. >> mr. donatelli, do you think that chopper dissipation at a 30 year highs a good thing for the united states of america? >> absolutely. >> commissioner, would you say that wages be up of historic decade high rates and up more for the lowest income folks which equates to about $1000 a year, do you think that is good for hard-working, middle-class and lower income families? >> i don't know anyone that would disagree. >> well, what about you doctor imhoff? do you think the highest consumer confidence and confidence for manufacturers and small businesses is a good thing
for this economy and the prospects for greater prosperity in the future. would you agree that? >> yes, sir. >> i can go on and on but i would say this isn't an accident. we had a decade of stagnation, a flat economy, low taxes and regulations and the cost of those were very high. like a big old wet blanket on the greatest economy in the world. all we did was had a little freedom in the marketplace. we took a little burden off the backs of the job creators. put a little money in the pockets of hard-working american people. and, we have seen a tremendous response. a tremendous response. i appreciate what you guys have said today. mr. commissioner, i really appreciate you bringing in the founding fathers and founding documents. i do think it is important to start there philosophically on
any discussion we have. i tried to. i am not an expert on the subject but you quoted "alexander hamilton" federalist paper and i will call you number 21 from the same author. . . . i have benefited from the community. but golly, can any of you all tell me there is a precipitate in the tax cut and dissect that created this economic renaissance in this country has
any provision in their precluded any of you from lowering your tax burden on your people? is there anything you are aware of that precludes you from reducing local taxes or anything that you know of that would preclude state lawmakers in your respective states from lowering the tax burden to make is there a mandate in there that says you can't lower your tax burden for your folks because i understand the cost is too great and you're probably losing folks. i know states like california and i'm not picking on california with all due respect to the chairman but from 200 2007-2016 they lost 13000 businesses. the chief beneficiary of that was the state of texas. the reason they said they were
leaving was as a result of high taxes, vat lawsuit, climate and heavy regular tray burden. now, let's talk federalism. it gives the state of california the right to do whatever they want to do with the respect of their environment they want to create and apparently it's not a very good environment and at the heart of federalism is the division of power and sovereignty to the state and to your local jurisdictions. the federal taxes are there for federal purposes like providing a common defense. state and local taxes are there for your local and state purposes and i don't think we do anything to interfere with that and to say washington is not giving folks a fair shake, i don't know that their local leaders are giving them a fair shake if the taxes could be reduced and that is in your control to do so but i know i'm out of time, mr. chairman, thank you for your time smack the gentleman's time has expired.
>> portion of this hearing on state and local tax deduction limits. can see it in its entirety at her website, c-span .org the u.s. senate about two in their weekly party caucus break and they are expected back at 2:15 p.m. to continue work today on the 2020 defense programs and policy bills more lives in a coverage when members return right here on c-span2. u.s. house also in session today members working on federal spending for the commerce justice agriculture transportation and veterans of their department. also health leaders still looking for a way forward on emergency aid for the u.s. southern border. eyes are on the house rules committee as they prepare to meet and discuss changes to the order aid bill. some members existing on better protection of children and detention facilities at the border and that rules committee meeting was scheduled for 11:00 a.m. eastern this morning but was pushed until sometime
later today. you watch the house live on our companion network, c-span. as we wait for the senate to return there have been a number of the ministration personal changes announced a short time ago about one hour ago the ap reported first lady melania trump announcing her longtime spokesman and confidant will succeed sarah sanders as white house press secretary, stephanie grisham has been at president trump since 2015 when he launched the presidential campaign shall take on the role of white house medications director and also from "the new york times" acting customs and border protection commissioner john sanders is expected to resign next week. a federal official telling the you new york times earlier today it was unclear whether his resignation is connected to criticism of the agency's handling of the influx of migrants at the southern border and the white house has not responded to the request for comment. the senate set to return for more lives later work on defense