December 4, 2017
Albany, NY

Audio & Rush Transcript: Governor Cuomo, California Governor Brown and New Jersey Governor-Elect Murphy Hold Conference Call on the GOP Tax Plan

Audio & Rush Transcript: Governor Cuomo, California Governor Brown and New Jersey Governor-Elect Murphy Hold Conference Call on the GOP Tax Plan

Earlier today, Governor Andrew M. Cuomo, California Governor Jerry Brown and New Jersey Governor-Elect Phil Murphy held a conference call on the devastating impact of the GOP tax plan to New York, California, New Jersey and the entire country.

AUDIO of the call is available here.

A rush transcript is available here.

Governor Cuomo: Thank you very much and it's my pleasure to join Governor Brown and Governor-elect Murphy, my neighbor. The tax plan has passed the Senate and passed the House. It's going to go to reconciliation, but it's a long way from done and it's a long way from a positive for this nation, in my opinion. First of all, it was a fraud, it is a fraud on the American people. They talked about a tax cut for the middle class and the working men and women of this nation and what they've given us so far is a tax cut for the rich, period. Fifty percent of the benefit goes to the top one percent and that's an inarguable fact, and their theory is not new or novel, it's trickle-down on steroids. You help the rich in this nation, a corporate tax break, and then the corporation will take those funds and raise wages for workers or create more jobs. Yeah, or the corporation is going to put it in their pocket and the rich person is going to buy another house or they'll do another round of dividends, which is a more likely scenario in my opinion.

To add insult to injury, the tax cut is then targeted at twelve states that happen to be so-called "blue states" where they target eliminating the state and local deduction. I don't think people understand what this will do yet, but it will be devastating for the states that are effected. It is, in essence, an increase in people's property taxes and an increase in state income tax. Only on those twelve states. It is going to have a very negative impact, I believe, on those twelve states. I believe it puts them at a structural competitive disadvantage because structurally our taxes will then be higher than other states, which by the way, also raised revenue. They can do it to a value-added tax or real estate tax, but they're raising revenues also. They just don't have a property tax and an income tax, and those states that do will be at a structural competitive disadvantage. Their only justification is, "Well, why should the federal government subsidize those states?" It's very simple, the federal government doesn't subsidize those states. New York, California, New Jersey are donor states, which means we put more into the till than we take out. This actually aggravates and enhances the injustice where we are subsidizing the other states and now you're using New York, California, and New Jersey as a piggy bank to finance the tax cuts in the other states. It's political retaliation through the tax code, and that's why they passed it just with their own votes. With that, let me turn it over to my friend, and my colleague, and a governor who I have tremendous respect for, Governor Jerry Brown, and then we'll hear from Governor-elect Phil Murphy.

Governor Brown: Thank you, Governor Cuomo. Let me say very clearly that the most immediate evil of this cynical maneuver called the tax bill is to further divide America when we're at one of our most divisive periods in history. The idea that a president and representatives holding the majority would use that power to penalize 12 states, I believe mostly who voted strongly against the president, is not going to bring America closer together. Our biggest challenge is that we're divided, while some of our most important competitors are getting more unified and certainly more authoritarian. We need to come together. This bill will divide the blue states from the red, the democrats from the republicans. It is evil in the extreme. That's number one. Number two, it exacerbates inequality. The bottom 40 percent - that's a hell of a lot of people - the hardest working, the not particularly well paid 40 percent of America - they're going to take home 58 cents a week if they don't live in California, New York, New Jersey, or the other nine states that are being penalized. So, that's a pittance, and at the same time those who are affluent will get a lot more. The corporations are going to give it to their shareholders. Shareholders represent, disproportionately, the wealthiest people in America. Or they're going to put it into automation, and new machines, that replace people. So here's a guy, Trump, who ran for office saying, "Oh, our jobs are being outsourced to China and Mexico, and now he's paying off his wealthy donors to automate. That's what the money's going to go for. They're going to replace workers, and he's still not doing anything to bring back jobs. So, that's our problem. The deficit gets worse, 20 trillion going to almost 22 trillion. The deficit is going to do something to the economy, but the most salient point: it's going to divide the hell out of us. It's going to give crumbs to 40 percent of the people, and it's, I don't know, it's not something we need at a time when Congress has about 13 percent popularity, the president, according to Gallup, has 33. So, it's a time to come together. If you can't come together when one team, who has a couple vote majority in the senate, is acting like a bunch of, you know, mafia thugs, it's not right and it won't stand.

Governor-elect Murphy: I will jump in. Phillip Murphy from New Jersey. Thank you, Governor Cuomo for your words, just a couple of brief comments. There's devastating impact in New Jersey just as in California and in New York. It goes a long way as both Governors have stated to lightening our inequalities and continuing down this awful path of us versus them leadership from Washington. We've seen this time and time again. We know this doesn't work. We know the executives get paid better and the gap between them and those on the factory floor widens. Shareholders get the benefit of shareholder buybacks. Wages and jobs for the folks who need them are neglected. We've seen this before. It is a scam at the ultimate extreme. On more than one occasion we've all heard when was ask what's the rationale, why are you doing this, the awful answer has been "our donors and our donor base will dry up if we don't do something." And I'm sure everybody listening saw the chaos of Friday night literally handwriting in pen amending the bill. It's as bad as it gets. I would say in a glass half full sense, Governor Cuomo started with this comment and I want to reiterate, it's not over yet. We're in the 9th inning. Each of our states have Republican members of the house. And I would say this is beyond Republican or Democrat. This is a clear cut question: are you representing your constituents who elected you, who claim to represent, or are you in with President Trump's wrongheaded leadership in Congress? It's black and white. We have five Republican members of the house in New Jersey. The last time this came up they voted the right way. We need all of them to vote the right way and I'm sure Governors Cuomo and Brown agree with their delegations in New York and California, respectively. I just remind everyone, as I turn it back over, that the SALT deduction, that has been particularly problematic in our states, has been part of the tax code since the income tax became legal in 1913. So this is back over 100 years that Congress recognized that taxing people twice was unfair and unsound, and as was already stated we are the three biggest donor states already in the United States in terms of the federal dollar give and get and this will only make it worse. I'm honored to stand with these governors. And I would say this, that the stronger we are together, the more locked arms we can be on issues like this and we fight together as a team, I think there's a lot to be said for that and a lot we will accomplish and I'm honored to be on this with you gentlemen today.

Governor Cuomo: Here, here. Well said. Congratulations again.

Governor-elect Murphy: Thank you, Governor.

Question: Yes, Governors, I'd love to know since you've already pointed out how a minority of people, a strong minority of people favored this thing, it actually doesn't help. So what more can you do, for example, can you sue for the unconstitutional elements of the tax bill, like the provision for personhood, can you withhold the excess money like New York's $48 billion into some kind of escrow account like a landlord tenant type of fight, and pay for services that should have been subsidized by Federal Government from that, or what do you do that is more than just asking for majority of Americans who've already expressed that they expose this thing, what can we do, what can you do?

Governor Cuomo: Governor Brown, Governor-elect Murphy you want to take?

Governor-elect Murphy: Defer to Governor Brown.

Governor Brown: Alright, well, maybe some legal action. This is a quintessentially political challenge and our job is to communicate the fraudulent and nefarious character of this tax bill and the way it is proceeded, which John McCain has said that it follows no normal pathway and we want to make sure our members of Congress know that they're hurting California and New York and New Jersey and the other nine states, but they're also hurting America because these states, just the three that we represent, are key elements of the American engine of prosperity. And when Trump and his Senate allies attack California, New Jersey, and New York, they're attacking the vital engines of the American economy. And it's really stupid, and they will regret it and we will do everything we can to convince our Republican Representatives that the right for thing for America is to defeat this bill.

Governor-elect Murphy: I would just add that one of the big benefits of working together across states is in particular with Attorneys General, Karen, and going to the fullest, I used the phrase a couple of days ago, we tear up all the floorboards going to the fullest extent of the law to the highest levels and challenge this. And I think when you have a bill that has 500 pages of amendments, a lot of it hand-written, I'm not a lawyer, but I'm betting there are some holes and flaws in this bill—we're going to have to be vigilant, if we don't succeed in the next few days, I'm still optimistic we will. That we're going to have to take this to the limit.

Governor Cuomo: Yeah, I'm not even, this is Andrew, this is double taxation. And I'm not even sure it's legal. And we're going to find out whether or not it is. And Governor Brown's point about how its counterproductive - the 12 states are 40 percent of the GDP. You're going to help the American economy? How do you do that by assaulting 12 states that represent 40 percent of the GDP? And this will be negative for our states and regional economies. There is no doubt about that.

Governor Brown: Let me jump in if I can. Governor Cuomo made a very good point. There's 40 percent of the American gross domestic product and when you assault that, how do you think there's going to be a net gain at the end of the day? They're say there's going to be a net gain to the economy but that isn't clear. I think there's a good chance this will be a minus, not a plus. And attacking the innovation of New York and New Jersey and California and the other states, it's just a dumb move and you can only explain it by the desperate situation the Republican leadership find themselves. They've got a president who is the most unpopular in American history. They themselves are riding a very dead horse in the form of this tax bill, so they are acting irrationally and certainly not in the interest of our country. They're throwing a wrench in the engine of our economy. That's the way I'd summarize it.

Question: Hi gentlemen, how are you doing? I'd just like to circle back with the litigation part. Governor Cuomo said it amounts to double taxation. Have you folks looked in more detail about specifically how you could fight this legally? Or is that something you have yet to do, and also a couple of you are expressing optimism that in the next couple days over the next few hours this is something you can push back?

Governor Cuomo: This is Governor Cuomo. We are looking in to the legality now. As Governor Murphy mentioned, this has been in the tax code since it started - over 100 years. This is double taxation. They are taxing taxes. That's what they're doing. This from the party that is against taxation, right? This is the party that is against redistribution. This is redistribution in an expedition form. It's not taking from a rich person and giving to a poor person, which is what the Republicans say the Democrats are always trying to do. This is taking from the richer states and has them subsidize a tax cut in the less wealthy states.

So it is totally hypocritical on an ideological framework. It is everything they said they were against. Double taxation. Taxing a tax for the first time in history. A re-distribution state to state, so it very well may be illegal and unconstitutional and that is something we're looking at. I think the more people understand what this is? The more people understand how unfair, divisive and harmful it is to them individually. The problem nowadays is, there is so much news and so much happening, and this is so apparently complicated - elimination of state and local taxes - you know, it's a complicated few words. But the more people understand it, the more people are against it, the Congresspeople and the Senators ultimately have to go home. And if they vote for this, they are voting against the interest of their constituents, period. And they have an election next year and ultimately democracy works, and a Congressperson who votes for this? There's no going home again in my opinion.

Governor-Elect Murphy: Matt, I'll say from New Jersey, we're still studying the legality as Governor Cuomo said on his side, since I saw you on Friday. And I'm an optimist for the simple reason - I guess we all believe in a different America than this bill articulates. And the more people, as Governor Cuomo said, the more people who understand what's in this thing, the more we have the potential of folks waking up and saying, "wait a minute." And really actively pushing back. We haven't even talked about what it could potentially do as an example to higher education, by repealing the tax deduction of student loans, or stripping tax credits for renewable energy, or opening the arctic for drilling, or you know - on and on and on. The individual mandate inside the affordable care act. The more people realize what's at stake, I think we're collectively hoping they're going to say, "You know what, this can't go forward."

Governor Cuomo: One more quick point if I can. This will be, you know how the Republicans, once Obamacare passed, so called Obamacare, the next day they started repeal and replace Obamacare? If they do this, if they do this, the next day we're going to start the repeal and replace the divisive tax act.

Question: Hi, for Governor Brown in particular. What about they have now an exclusion for $10,000 in property taxes, does that help? And have you estimated any costs for the state of California to this?

Governor Brown: Say that again?

Question: Yeah, the $10,000 property tax exclusion that they've added to this? Does that help?

Governor Brown: Well, I suppose it helps somewhat, but the problem is in California, we have relatively low property taxes and we have high income taxes. So look, the bill keeps changing, so we have to speak somewhat cautiously, but almost $40 billion taken out of the California economy by this increase in taxation by virtue of elimination of 100 year old deductions. So we're looking at the net here and obviously having some deductibility is better than none but overall if the millions of people who are paying income tax, and by the way, 40 percent of our income tax goes to schools. So more than that, you're hitting the schools, too. So I'd say the whole thing is very nefarious.

Governor Cuomo: Yeah and you know, this is Andrew, $10,000 property tax exclusion is great for those people who pay $10,000 and less. $500,000 as a limit on mortgage interest deductions is great for those homes valued $500,000 or less. But it gets back to Governor Brown's point. It's divisive. In our states, many people pay over $10,000 in property tax and those people are out of luck. Many homes are valued over $500,000 and those people are out of luck. That's why it's targeted to the richer states with higher home values and people pay higher property taxes in those states. Our states are among them. That's why it is redistribution, it's unfair, and it's divisive and it is counterproductive. Again, as we said, 40 percent of the GDP. Alright. You think you're targeting blue states. First, to make policy through a political lens is repugnant to the whole concept. But you're targeting 40 percent of the GDP and then you're going to say that's how you're going to spur the economy? By putting an arrow in the economic heart of these 12 states? There are suggestions that it will drop the value of homes in our states because those property taxes now are in effect going to go up 20 percent, 25 percent, overnight. If you drop the value of homes, you'll disrupt the whole financial system. You could see mortgage foreclosures. I mean, I don't even think they understand what they're doing.

Governor-elect Murphy: I'd just add that in New Jersey, about a quarter of the folks who pay property tax pay over $10,000. We have 21 counties in our state, four counties, four big ones I might add, the average property tax bill is well over $10,000. So it helps but it leaves a whole lot of other folks on the outside looking in.

Question: Governors, can you hear me?

Governor Cuomo: We can hear you.

Question: Okay. My question is about the tax that the [audio cuts out] progressive say [cuts out] the more they make and the more the property is worth, so why are progressives like yourselves opposed to that?

Governor Cuomo: Patrick, you went in and out on my phone. Can you repeat that question please?

Question: I'm having trouble here. The deductions that they would take away here, they are progressive on their face because the wealthier people are, the more they're paying, by progressive ideas, so why do progressives [cut out] not like the idea of taking it away from so many affluent people?

Governor Cuomo: Patrick, I think, to the extent it is progressive it is taxing richer states and transferring the money to poorer states. When we talk about progressive within this state, I have no problem where we share resources and share benefits and share burdens, which is the essence of the progressive philosophy. But when you say, "Well I'm going to hurt New York and New Jersey and California and these twelve blue states and devastate their economies and transfer that wealth to a different part of the country." That is a theory of redistribution that we've never heard before and I believe it's going to hurt everybody. You hurt this economy, you're going to hurt everyone. And frankly, you're going to hurt the middle class and the working families even more. And their tax plan is the opposite of progressive. Fifty percent of the cuts are going to the top one percent. So you have a plan that is fundamentally not progressive with a targeted assault that will be devastating on certain states.

Governor Brown: Yeah can I jump in here a second? You make a point about the appeal of richer people having more property tax and all that. I get that, but let's skip the pay point. They're creating a trillion and half deficit and then the rules are gonna start squeezing Medicaid and other programs that affect the poorest people. That's number one. Number two, they can increase by giving so many breaks to the wealthy, the income gap, that is already a contributing factor to divisiveness that is dividing Democrat and Republican and the whole nation of America. And the third point is that very moderate people pay income tax. So on all scores we are disadvantaging the less advantaged people while way disproportionately paving the wealth and worst of all is it's creating a division, an income gap that's growing, and it's ripping the country apart. And I want to emphasize that. Ripping the country apart. There's never been a plan where Republicans have been so far from Democrats. You cannot govern a country with that kind of divisiveness. At the same time, other competitors like China and Russia are becoming authoritarian, more focused under central control while we're becoming more divided, unable to make long-term decisions. It's very dangerous, very bad and I just want to emphasize it. This is not just a little moving around of tax money. This is potentially a ratcheting up of the undermining of our country.

Governor Cuomo: Yeah. Jerry provoked me now. One other point. You know, we talk about this like this is a new concept. This is not a new concept. They proposed no local deduction during President Reagan's time. At that time, Democrats and Republicans both said it was wrong and defeated it. The difference now is the political extremism and their willingness to divide, as Jerry says. And the political extremes that they'll go to to do that in the first place. Also, this is only step one of their plan. And again, we know what their plan is because it's not new. We've seen the playbook. Step one is tax cuts for the rich. Step two is drive up the debt and drive up the deficit and then come back and say, "Oh, we have a $1.5 trillion debt that we created by the way by cutting taxes for the rich but now we have this debt and we have to address the debt and the way we need to do it is by cutting government spending." And where are they going to go? They're going to go right to Medicaid. They're going to go right to healthcare for poor people. They'll go right to CHIP health insurance for poor children. Right to the housing programs. I'm the former HUD Secretary, they'd love to go right for affordable housing and low income housing and food stamps, et cetera. That's step two and that is inevitable. They are creating the debt that will then justify their second philosophical step, which is cut government spending and do it by hurting the poorest Americans. Phil, I'm sorry, I think I cut you off.

Governor-elect Murphy: No, not at all. You're on a roll. I agree by acclamation with everything each of you said. Patrick, I think if you look at this in its entirety, you know beyond just SALT and you look at the implication both Governors have outlined, this is their way to get at cutting Medicaid, Medicare, social security. These so-called deficit hawks. It's the height of hypocrisy. But if you look at what this will do to higher ed and student loans, what it will do to health care with the individual mandate. We've already seen the trickle down movie before, we know how that ends. Lowering taxes on businesses, taken in its entirety, it is far from progressive and it's exceedingly damaging not just to our states but to our country.

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