As the final language for the GOP tax reform bill rolls out to the public Friday afternoon, Rep. Bill Flores (R-17) sits down in the KBTX studio for First News at Four to discuss the details.
The corporate tax cut
Flores confirmed the corporate tax rate would be cut from 35 percent to 21 percent.
"Everybody that has ever been looking for greater economic activity and more jobs and better paycheck wants to see that rate cut," said Flores. "America has the least competitive corporate tax rate in the world, so we're going to go be right at the most competitive end of the tax scheme."
At odds with the Congressional Budget Office
Three weeks ago, the non-partisan Congressional Budget Office (CBO) released a report saying the tax plan as it stood at the time would give a big break to the wealthiest Americans and hurt the poorest.
Flores shifted focus to the middle class, saying that group would see a significant tax cut.
"The median income in this country is about $59,000, and today that family of four pays about $1,600 in taxes," Flores said. "With this tax cut, they're going to go down to $400... I don't know how anybody can say that that family is getting hurt when their taxes are getting cut by 75 percent."
The CBO, which has not yet had an opportunity to analyze the final version of the bill, also said the plan would expand the national debt $1.4 trillion over 10 years.
"[The CBO] reported a static number," said Flores. "They didn't go into the feedback loop when people get to keep that money... or businesses get to invest it."
Flores says this "positive feedback loop" increases economic activity. He said the Treasury was able to quantify that effect this week, placing it not at a deficit but at $300 billion more in revenue over the next decade.
The fight for grad school tuition tax credits
Originally, the tax credit for graduate school tuition had been cut as part of the tax reform bill.
But Flores, after calls from the Texas A&M system and the University of Texas system, went to bat for the program.
"If we suddenly did something to hurt [grad students] economically, then you have fewer grad students, less basic research," said Flores. "And you hurt the economy 10 years out in the future, 20 years out in the future."
Texas A&M University System Chancellor John Sharp released this statement to KBTX:
“Bill Flores did a remarkable job keeping the proposed tax on graduate students out of the final bill. The entire Texas A&M System owes him a debt of gratitude.”
Saying goodbye to 12th Man refunds
Donors to the 12th Man Foundation received an email encouraging them to make their charitable contributions for seats at athletic events before the end of the year. That's because, in the final version of the bill, those donations will no longer be tax deductible.
It's a move Flores defends.
"I know I'm going to have about 100,000 Aggies argue with me on this, but that was more of a high-income problem," said Flores, "and we were trying to help working-class families."
Flores says he's the one who told the 12th Man to send out the aforementioned email so that as many Aggies as possible could get the deduction for this year. However, moving forward, he says cutting the deduction is the right move for the country.
"It's just something we couldn't justify, is getting the tax deduction for the right to buy a football ticket," Flores said.