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Faso gets flak for moving tax reform to conference; House, Senate have big differences to overcome

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    Courtesy of Congressman John Faso’s office
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    U.S. Rep. John Faso, R-19, supported the House of Representatives’ passage of legislation that reauthorizes the Children’s Health Insurance Program which expired in September. The bill also delays cuts to compensation for hospitals for treating uninsured patients by two years.
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    Gareth Rhodes, of Kerhonkson, who is seeking the Democratic nomination to challenge Faso in the 2018 election, criticized Faso for voting to move the controversial Tax Cuts and Jobs Act into a conference of the House and Senate.
December 5, 2017 - 11:30 pm Updated: December 6, 2017 - 11:47 am

 

After weeks of positioning himself against the controversial Tax Cuts and Jobs Act, U.S. Rep. John Faso, R-19, voted to move the tax reform legislation into conference between the House of Representatives Ways and Means Committee and the Senate Finance Committee, through which the bills will be tailored into one cohesive bill.

Faso’s actions on the bill have been inconsistent as he brought the blueprint for the bill forward to become legislation at the start, but voted against it when it reached the House floor for a vote, where it passed Nov. 16. Faso then spoke out against the bill — specifically about a provision that would eliminate deductions for state and local property, income and general sales taxes.

The Senate passed its version of the bill early Saturday morning, and under the reconciliation process through which the bills were passed, they can now be put together through a conference between two key committees.

The House approved bringing the bills to conference Monday in a 222-192 vote, including support from Faso and U.S. Rep. Elise Stefanik, R-21, who previously voted against passage.

U.S. Rep. Lee Zeldin, R-1, and U.S. Rep. Dan Donovan, R-11, remained consistent Monday in voting against the bill.

“Voting to go to conference is part of the legislative process, and is the last chance we have to make changes that will help New York families,” Faso said Monday. “The alternative to going to conference was to simply take up the Senate bill — that would have been a worse alternative.

“I will continue to fight in support of the SALT and medical expense deductions, among others. If those issues are not addressed in a manner that works for New York and lowers taxes for families in our state, then I will oppose the final bill.”

The Kinderhook congressman took flak for his vote from potential candidates interested in taking his seat in the 2018 election.

“Last night, John Faso voted with [House Speaker Paul Ryan, R-Wis.,] to send the House and Senate into conference to help this disastrous tax scam bill become law,” said Gareth Rhodes, of Kerhonkson, who is seeking the Democratic nomination to run against Faso in 2018. “While seven other Republicans stood up for working people and voted ‘no,’ Faso continues to side with the Ryan-McConnell-Trump attack on New York families.

“Actions speak louder than words,” Rhodes added. “Faso’s vote to keep this bill alive proves yet again that he won’t hesitate to choose Paul Ryan and party elites over working people in NY-19.”

The Democratic Congressional Campaign Committee said Faso’s vote throws his constituents under the proverbial bus.

“Yesterday, Representative Faso betrayed his constituents, voting to pave the way for a Republican tax scam that will hike taxes on middle-class families,” said DCCC spokesman Evan Lukaske. “Once again, Faso revealed that when it gets down to brass tacks, he has no problem throwing his constituents under the bus. Luckily, they’ll get to return the favor next November.”

Faso defended his vote, saying any hint he has changed his position on the bill and certain provisions is false.

“Any suggestion that my position, which is focused on protecting New York families in this tax debate, has changed, is simply political nonsense intended to distract and mislead citizens,” Faso said.

Now that the Senate passed its tax reform legislation, everyone must wait to see how Congress marries the two bills, which have significant differences when it comes to key provisions that will be topics of fervent discussion in the days to come.

Faso recently provided the Columbia County Chamber of Commerce with a breakdown of the similarities and differences between the two bills.

Key similarities

Both bills nearly double the standard deduction, but increase the deduction to different amounts. The House increases the standard deduction to $24,400 for joint filers and to $12,200 for individual filers. The Senate bill increases the deduction to $24,000 for joint filers and $12,000 for individual filers.

Both bills include deductions for state and local taxes up to $10,000 — a compromise that was made last-minute in the Senate to ensure passage of the bill due to the criticism the provision was receiving from Republicans representing high-tax states such as California, New Jersey and New York.

Both bills would expand the charitable contributions deduction while repealing the personal exemptions.

For businesses, both bills would decrease the marginal corporate tax rate to 20 percent — the Senate’s rate change would take effect in 2019, while the House’s rate would take effect in 2018.

Key differences

The House decreased the number of tax brackets to four — 12 percent, 25 percent, 35 percent and 39.6 percent — while the Senate retained seven brackets.

The Senate bill would create a higher child tax credit — $2,000 phasing out after $500,000 — than the House bill would — $1,600 phasing out after $115,000 for single parents and $230,000 for married parents.

The Senate used its bill to try and sabotage the Affordable Care Act by repealing the individual mandate, while the House bill would retain the mandate.

The Senate bill also offers a higher tax credit for non-child dependents, $500, than the House bill does, $300.

The House bill would retain the mortgage interest deduction on principle residences up to $500,000, while the Senate bill would not.

The Senate bill would retain the medical expense deduction as well as the alternative minimum tax — it would also increase the alternative minimum tax while the House bill would not.

The House bill would double the estate tax exemption between 2018 and 2024, and subsequently repeal it, while the Senate offers to retain and double the exemption.

Both houses will have to work out a compromise on how to tax pass-through entities — businesses such as limited liability corporations and S Corporations where profits go to the owners and are currently taxed at the owner’s individual income tax rate.

The House bill would provide pass-through entities a 25 percent maximum tax rate with a 9-percent rate on the first $75,000 of taxable income.

The Senate bill provides a deduction on 25 percent of a pass-through entity’s taxable income.

Both houses proposed lowering the tax rate on money earned by businesses overseas, but the House proposed a 7 percent rate for invested earnings and a 14 percent rate for liquid earnings, while the Senate proposed a 7.5 percent rate and a 14.5 percent rate ,respectively.