Were seeing a battle between red and blue states. Lawmakers from blue states like california and new york, that they are furious that the plan eliminates local and state Tax Deductions. I am from new york. Here is the thing. It is not fair places like new york, california, and others effectively getting a free pass. They are subsidized by money from every other state in the america. We need a level Playing Field, to make it fair for all states. Texas republican congressman brian babin, sounding off on that in just a few minutes. First were going to adam shapiro. He has very latest on path forward for the tax plan. Adam, is it going to happen . Reporter if i could answer that question i would be a millionaire and not in this job. Whether tax reform happens this year or next year, that is up to mitch mcconnell, who keeps saying this congress. Talk about issue you brought up, repeal of state and local Tax Deductions. Democrats would say to you, that you point out other states subsidizing new york and california. They say it is other way around. States like new york and california send more money to the federal government than they get back. It is not fair to their citizens to. Gary cohn wouldnt say whether places like new york would see their taxes go up. Here is what Chuck Schumer, Senate Minority leader had to say about it, trish. President trump said his plan would create a middle class miracle. I think it would be a miracle if it helped the middle class. Reporter now the big deal for the middle class in this proposal is the doubling of the standard deductions from 6 to 12,000 for Single Person, 24,000 for a married couple. Here is what Vice President pence said about helping the middle class. Nothing could be further from the truth. We look at the changes in tax rate for individuals. Doubling the standard deintroduction for families to 24,000 a year. That means the average American Family can look at the first 24,000 a year they make and it is completely taxfree. Reporter so the fight is going to come down in part to, are you helping the middle class, trish and issue over the repeal of state and local Tax Deduction. That will be a big one. Trish adam shapiro, thank you very much. We have columnist with the financial types and columnist, liz peek. Where to start. Chuck schumer trying to say this will not help the middle class. It will only help the wealthy. Let me point something out here. The wealthy in new york, the state that mr. Schumer hails from, will actually pay more under this plan, because the idea youre not going to be able to get the state deduction or the local deduction anymore. So what, what is going on . Schumer had his talking points ready for the plan even came out. He would bash this as handout to the wealthy and big corporations no matter what. Lets go back to the state and local Tax Deduction. If you look, kind of diabolical honestly. If you look at top 10 places they could have gone for revenues, top 10 biggest deductions only one that doesnt hurt workers and Union Employees or the Real Estate Industry which employs tens of, millions of people across the United States. Is the state and local Tax Deduction. If you look top 10 states in terms of tax rate that their inhabitants pay, every single one voted for Hillary Clinton except for iowa. I dont know how iowa got on that list to be honest. Theyre the only one. It is politically acceptable thing for trump supporters. You can slice it a lot of ways but that is the reality. Trish look i live in new york. Yeah. It is horrible. Trish im not psyched about this, it will mean taxes are going up. I say, okay, let me step aside from the fact i live in new york, if i live in texas, florida, New Hampshire where there is zero income tax. Places like that, you say how is it fair new york state or california or any of these places with very high taxes basically allow those people to deduct that from what theyre paying federally . Because it is effectively like texas and florida and New Hampshire are subsidizing new york. Exactly. State has are generally profligate to the eyes of the rest of the country, spending, on their Public Employee programs, et cetera, again if you look at states really hurt, california, new york, new jersey, illinois, massachusetts, all that have very high income tax, state and property taxes too, because they have overspent their budgets. Now, the flip side as adam i think was referring to or someone was mentioning, is that new york will claim that they send a lot more to d. C. In terms of tax revenues than other states. Trish they do. So, wall street journal economics editor, fox contributor Jon Hilsenrath is joining us as well. Yeah, new york does send a lot more. I will wonder if new york politicians and californias politicians and other high state taxed areas, cant actually drive those rates down, might you see an exodus of people saying, i dont need to live in this very high taxed state, i have to pay 35 for income taxes and another nine and four in new york and similar situation in place like San Francisco . You might start to see behavioral phases and which means other states contribute more to the coffers . You might see that from retirees. I dont think you will see it from younger people because the states were talking about are homes to cities like new york, San Francisco, los angeles which are really thriving right now. Where were seeing a lot of tech jobs, a lot of finance jobs growing. You know, part of the problem, in this economy right now is that, it isnt growing in rural areas and exurban areas. It is really thriving in big cities like new york and San Francisco. I think it will be tough to drive people out of those places. Trish let me turn to this. As you heard Chuck Schumer earlier saying this basically will help those that already have something, you have the talking points that the left already has, and show you moments from howie kurtz sharing from the media, how this will just help the rich, liz, what do you say of that . The whole genesis of that tax reform effort was to create jobs. No one is talking about that. Heavens knows Chuck Schumer will not talk about that. Make u. S. Companies more competitive. To want to invest and expand in the United States through lower Corporate Tax rates, and Small Businesses appealing for them to hire and create jobs. The ultimate answer to middle class income stagnation, obviously is more job growth. That is what this is all about. None, no one on the left will talk about that. That is what its for. Trish more job growth will can i Say Something about this . Trish sure. Can i Say Something about the, the critique that the democrats have, that this is just benefiting the wealthy . You know, it is kind of like theyre pressing the button they pressed in the 80s and 90s and 2,000s hoping it will replay. Frankly if the democrat want to critique President Trump and republicans on this, i think is different one might be more effective, the president and republicans are promising more Economic Growth out of these tax cuts and it is not a certainty, and it isnt obvious cutting taxes like this are going to create 3 , 4 , 5 growth theyre promising. That is where i think republicans need to be held accountable. This idea that trish you know i disagree with that . You know i disagree with that. I explained to everyone yesterday. Look at jfk, cut tax, 91 was top income tax rate when jfk came into office. It only went down into the 70s. Trish 30 points. Went down to the0s. Trish better than 90, thank you very much. President reagan did same thing. Saw very nice growth, average of 4 annually after the tax cuts. 4 hey, i take it versus one to 2 , liz. I would argue already happening. The day of the election, Business Optimism began to soar. Business investment is now beginning to chug along. That was the missing economic wheel for the last eight years. So i think it is happening. Trish thank you very much. Liz, jon, thank you very much. Many in the media using new tax plans to launch accusations not only at wealthiest americans and President Trump himself. Listen to question from abcs george stephanopoulos. Here is what he said about the National Economic director gary ebb cohn this morning. I was talking about the elimination of estate tax, alternative minimum tax, cut in capitalgains tax, that means millions of dollars for President Trump. He says believe me, i wont be getting a tax cut. Can you guarranty President Trump wont get a tax cut under this plan . Trish what else is the Mainstream Media getting wrong about the tax plan . Why are they leaving it out . Mediabuzz host howie kurtz. Good to see you here. Same here. Trish we can go through the headlines. One after we show yous, one after another they are critical saying this is one big fat giveaway. I would qualify this by saying, if you cut taxes for corporations, it could be perceived as a giveaway but lets not forget that corporations and Small Businesses are the ones that actually employ people. So you need them to succeed if you want to actually have jobs. The other thing is, half the country, doesnt pay any tax at all. So you cant give them a tax cut, howie. That is true. Every time republican cut taxes there is media debate, too much, dis proportionally benefit wealthy. I dont get this whole, is President Trump benefited from tax cut . Havent previous president s benefited from tax cuts . It seems to be a side issue, morning paper, this will blow up the deficit. That is a fair question to raise, except the media didnt seem to care that the deficit exploded under obama ball. Trish the word deficit intimidates them. I told you this before, there is bias against reporting actual news when it comes to the economy. Theyre intimidated, big words like deficit scare them. Wishlist for tax cuts to wealthy, would do little or nothing to improve working class. That is new york times. Washington post says accept enormous deficits, worsening inequality if the price of giving wealthy a big, beautiful, tax cut. Theyre really, theyre hanging on to the lefts talking points here. But i think there is hypocrisy on both sides because republicans traditionally complain about the deficit being out of control which it is, and administration has not yet explained how it will pay for this tax cut because they havent tackled more tricky question, which deductions you will take away. Democrats do the same thing when theyre in charge, except they bust the budget with increased spending as opposed to reducing taxes. That said, i maintain it is political. Doesnt need to be political. Everybody should be joined to do the best thing for the economy. Youve seen president s on both sides of the aisle cut taxes. Talk about republicans, typically being fiscal hawks, howie. This is what jfk was up against. Republicans didnt want him to cut taxes but he did, because it was right thing to do for the economy at the time. Ronald reagan cut taxes. Interestingly enough, the Freedom Caucus is for this plan. Why do you think so, when they have been so hawkish about the deficit in the past . Well it seems to me, that the easiest thing in the world for politicians to do should let people keep more of their own monies as opposed to taking it away. So many special interests and benefits entrenched in the tax code, this always turns into a messy beltway fight. The challenge for the press to keep a close eye, hawkeye on the substance of it, not get totally caught up in the politics. Trumps and republicans need to do this to put a win on the board. That may be true but there is a lot of money at stake. Trish the problem, they never want taxes to go down for those paying them because they think there is a bias in the media. And they have a lot of appreciation for places like venezuela and cuba. As a result, they dont want the middle class and the upper class earners to not pay less. They want them to pay more, more, and more. Take that money, to redistribute it to everyone else, howie. Isnt that sort of whats at play here . The idea that somebody who is actually earning a living can get a tax cut is something that makes some of those folks on the left pretty angry . I dont want to say everybody in the media has that view. There has been some honest reporting about Unanswered Questions in this tax plan but this is why we have elections. Barack obama was elected. He did increase taxes on wealthy as part of a tax deal. Donald trump made clear what he was going to do. Now comes the fight. Trish now comes the fight indeed. I would end it by saying it is pretty unamerican to want to penalize prosperity. We want to see every Single Person out there working as hard as they can, keeping as much as they can. That is what would incentivize growth. Thank you so much, howie kurtz. Watch howie on mediabuzz on Fox News Channel 11 00 a. M. Eastern every sunday. The republican tax plan setting up a battle between high state taxes that are blue states and low taxed states that are red states but is this plan to eliminate the deduction, state and local taxes really just leveling the Playing Field . Well ask texas congressman brian babin. His state has some pretty low taxes. What exactly is this all about . He is next. I will see you here. My experience with usaa has been excellent. They always refer to me as master sergeant. 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Trish thats interesting, huh . That was treasury secretary Steve Mnuchin defending the elimination of state and local Tax Deduction notice republican tax reform plan. Mr. Mnuchin, i hate to say it, because im a new yorker, and i live here and i get a deduction because of state and local taxes but he is right. It is not fair that states like new york, california, new jersey, all which by the way happen to be blue, have been getting a free pass all these years. Maybe if the states lowered their state income tax, they wouldnt be dealing with this issue, right . My next guest says the state of texas, which by the way has no state income tax, shouldnt be subsidizing the rest of the country. Welcome congressman brian babin. Good to have you, sir. Good to be here, trish. You heard me. I admit i like what i can deduct living in new york. Under the republican plan, i wouldnt be able to do that anymore. People in San Francisco wouldnt be able to do that anymore. People living in new jersey wouldnt be able to do that anymore. It wouldnt matter to you, would it . We get to deduct our taxes as well on property taxes. You like paying them too. We have no state income tax. That actually makes a lot of difference. Again i heard you say in your previous segment, why should the american taxpayer be bailing out state has have high taxes . You know, the people can vote in those high taxed states. Elect folks that will get rid of that income tax, they will drop your taxes. You know what . Trish im with you. Im with you. I dont want to be because it will cost me but you think about federally, right, you have a federal income tax. Right. Trish how is it that you can deduct your state income tax, what you pay to your state and say, well i can pay less federal tax because i paid this much to new york or california . That doesnt seem right . Youre cheating the federal government out of that money and it is going into new yorks covers instead coffers. No question about it, it is a subsidized payment that helps these hightaxed states out. Of course you know, trish, were being accused of having special interests with tax cuts for wealthy but we, we have one special Interest Group and that is the American People. The American People have not had a tax break in a long, long time. In fact the tax code is so big now, it is twice as long as the bible, with none of the good news. It is absolutely time to change. That is what were going to do. Trish this would be a big deal. We havent seen any kind of meaning meaningful tax reform since ronald reagan. Do you think it will get done . Will you see a bipartisan effort . I cant tell you well see a bipartisan effort. I hope we get democrats on board but i think we