Brian Lehrer: It's The Brian Lehrer show on WNYC. Good morning, everyone. If you pay attention to national news, especially about money, you probably know the Treasury Secretary Janet Yellen yesterday introduced the Biden administration plan for a global minimum corporate tax. Yellen and Biden are trying to end the age-old game of US corporations pretending they lived, oh, somewhere in the Caribbean or maybe in Ireland or somewhere else because those countries drop their corporate tax rates so low to attract those businesses.

A global minimum corporate tax is in the headlines today. If you consume national news, especially about money, you probably know that West Virginia Democratic Senator Joe Manchin says he won't vote for any of the tax hikes on corporations or wealthy individuals in the Biden infrastructure bill unless Biden goes a little easier on corporations.

Under President Trump, if you don't know this history, the corporate tax got lowered from 35% to 21%. Biden wants to split the difference and raise it back up halfway to 28%. Manchin wants to split that difference and only raise it to 25. Manchin says he's worried about jobs but more progressive Democrats wonder why he's protecting wealthy corporations. You know this if you're following national news, but if you follow New York and New Jersey local news, here's the Biden infrastructure bill taxation story.

Three House Democrats from our area are threatening to vote no on the infrastructure plan unless it reveals what's known as the SALT deduction cap. The cap is another artifact of Trump. To explain it simply for those of you who don't know about it, SALT is an acronym for State And Local Taxes. It used to be that you could deduct all the state and local tax you pay from your federal income taxes but under Trump, that deduction got capped at $10,000.

The problem is, many people in New York and New Jersey pay substantially more than $10,000 a year in state and local taxes, especially if they own a home because property taxes tend to be so high around here. Many other people pay that much in state and local taxes because they just make a lot of money. While Trump was cutting taxes for most people, let's be clear he raised them this way for those mostly in New York, New Jersey, Connecticut, California, and a few other states that just happened to vote democratic. He didn't have to call it a blue state tax, even though it was, it's a blue state tax because this is where property values and local tax rates tend to be high enough that capping the SALT deduction at $10,000 hurts a lot of people in these blue voting states. [laughs] Hopefully, I made this wonky story clear but one other wrinkle makes it a little more complicated.

Some progressives like Bronx and queens, Congresswoman Alexandria Ocasio Cortez, don't want to go back to the old normal because they say it would be a tax cut for many wealthy people. Why give them a special break, when affluent people should be paying more of their fair share in general. It's a local story, as well as national one on that level too.

The three House Democrats who say they'll vote no on infrastructure unless the SALT deduction cap is repealed are Bill Pascrell and Josh Gottheimer from New Jersey and Tom Suozzi who represents the North Shore of Long Island and Northeast Queens in New York, and Congressman Suozzi joins me now. Hi, Congressman, always good to have you on. Welcome back to WNYC.

Congressman Suozzi: Brian, thanks so much for having me on and you explained it very well. Very clear.

Brian Lehrer: Well, that was going to be my first question, if you had anything to add or correct from my attempt at SALT tax 101, anything to add or change?

Congressman Suozzi: Well, there's a growing number of members of the House of Representatives that are saying that they won't vote for the infrastructure plan unless it includes some reform of the SALT deduction. It's up to about eight of us now that have said that. The bottom line is I support the infrastructure plan. I want it to be big. I want it to be bold. I support President Biden. I was the first member of the House to support him when he first announced his race at seven in the morning, I endorsed him at 7:30 in the morning.

I love what's happening, but I need to get this issue of SALT addressed. It is an existential issue for us in New York, as well as many other states in the country. People are leaving our state. It's been exacerbated by the pandemic and people working remotely but the SALT deduction cap is really crushing our state and crushing a lot of people.

Brian Lehrer: What do you hear from House Speaker Nancy Pelosi or whoever would write the actual Biden infrastructure in tax rate bills, is the repeal of the SALT deduction cap going to be in there?

Congressman Suozzi: Well, Senator Schumer is saying that he's very favorably disposed, he wants to get it done. Nancy Pelosi says she's very sympathetic to the cause. She's got a big problem of SALT in her district as well and she wants to get it done and what she wants to see in the bill. The people that write the bill are the Ways and Means Committee. I'm on the Ways and Means Committee as is Congressman Pascrell that you mentioned, we're talking with the Ways and Means Committee about how important this is to us.

As matter of fact, there are 11 members of the Ways and Means Committee that sent a letter to the President, in the end of February saying, "We want to talk about SALT. We will do the American rescue plan but the next thing we do, we got to do SALT." Well, one of the reasons that I made this pledge of no SALT, no deal, the reason I started this whole thing was because we weren't getting much attention. Well, now we're getting attention, and we're going to have a meeting soon to discuss this with the White House.

Brian Lehrer: I saw Speaker Pelosi quoted on Politico referring to you and your two New Jersey colleagues, she said, "I would withhold any comment about whether you're going to vote for or not vote for something until you see what the bill is." It sounds like you're annoying the speaker, do you care that you're annoying the speaker?

Congressman Suozzi: I don't think I'm annoying the speaker. I have a great relationship with the speaker, I support the speaker but this is a wrinkle in the ointment and has to be balanced between all the other concerns that are out there by her, by Senator Schumer, and by President Biden. I understand that this is not the smooth rollout they wanted but this is important for my district, this is important for our state. This is important for a lot of blue states and the one thing I'll disagree with my colleague, Alexandria Ocasio Cortez, who I really respect how effective she's been in changing the course of the conversation in our country, is that this is a progressive issue. States like New York have the lowest uninsured rate for children and adults in the country. They have [crosstalk] health insurance in our state, that costs us money.

That's why our taxes are high. We're progressive state when the federal government was just talking about climate change, we were implementing climate change. We are so productive. We're the biggest net donor to the federal government in New York because we have mass transit. All these things cost a lot of money. We pay our teachers well, we pay our police well, we pay people well, it costs money. It's progressive to have a state and local tax deduction. That's the reason it was the first deduction in the federal tax code that was set up in the income tax code was first set up in 1913. It's a very progressive issue to support the state and local tax deduction.

Brian Lehrer: Well, the Politico article says Pelosi and other Democrats like to note that the 2017 tax laws benefits the Trump law mostly went to the rich and to corporations but repealing the SALT cap would also overwhelmingly help the wealthy, households earning at least seven figures a year would get the majority of the benefits according to the Joint Committee on Taxation, says Politico. Why shouldn't we see what you're doing as special pleading for some million dollar income people in your North Shore district when President Biden says the right thing to do is raise taxes on people making 400,000 or more?

Congressman Suozzi: Well, one of the ways to pay for the restoration of the SALT deduction is to increase the tax rate on the highest earners from 37 back to 39.6. I'm all for doing that. The bottom line is though is this is not just about the individuals, it's about the state, if people move away from New York state because they can afford to move away from New York State and go to Florida and go to Arizona and go to North Carolina, and go to South Carolina with their money, then what happens, the rest of us middle and lower-income people are left behind holding the bag, and what happens to us? Either our taxes go up or our services get cut.

This has an impact on our state. We need those wealthy people and those higher-income people and those middle-income people to stay here in New York State because we need their revenues so that we can support low rates of uninsured, so we can support climate change project, so we can support mass transit, so we can support all the different things that make our state expensive to live, but improve our quality of life and make us the most productive state in the country where we again, we're the biggest net donor to the federal government, we send more to the federal government than we get back than any other state in United States of America.

Brian Lehrer: Listeners who wants to tell a SALT story? 6464357280. Are you one of those people with a middle-class income by high New York and New Jersey who pay I should say high New York and New Jersey property taxes on your home, and who got socked by the Trump tax law capping this deduction? Because it does hurt million-dollar owners, but we know it also hurts a lot of middle-class owners who just happen to pay ridiculous property taxes because that's the way it is in a lot of counties around here. Tell us your thoughts story 646-435-7280, or anyone else with assault tax deduction cap comment or question, or anything else for Congressman Tom Suozzi from Northeast Queens, and the North Shore of Nassau and a little of Suffolk County 646-435-7280.

I'll give you a little gauge of the interest in this topic, Congressman, almost all of our 10 lines will already full before I gave out the phone number and that happens less often than not. Let me go back to AOC. Maybe she comes in in a potentially constructive way here. As you know she represents a Queens district, New York Queens district, but yours is much wealthier on average. She voted against repealing this cap in the 2019 House bill because she sees it as too much of a tax break for the rich.

She told New York One at a time, "There are ways to restructure soft deductions to provide relief to middle-class families and there are several different SALT repeal bills in the House. With another pass," she said, "I think we can get this done." That was AOC to New York One in 2019. Could you support a version of a SALT deduction cap repeal that targets relief to middle-class homeowners who just pay ridiculous property taxes, but still to not lower taxes on million-dollar earners who can well afford it and probably made out really well during the pandemic to boot?

Congressman Suozzi: I don't want to negotiate against myself until I meet with the White House until the Ways and Means Committee has a chance to talk about this some more. I'm pushing for the full repeal but I could see a phasing. I could see something happening over a period of years, especially focusing on those people that are making $120,000 a year or $150,000 a year between a husband and wife that are getting crushed. To be in the top 20% of the wage earners in America, you make $150,000 a year approximately.

Well, $150,000 a year in New York, in my district, in many parts of New York City, you're not flourishing. If you're making $150,000 in Oklahoma, you're on top of the world, you belong to a country club, and you've got a brand new house in a gated community with granite countertops. It's just different in different parts of the country.

$150,000 person here in New York, is a teacher and a police officer and they're not exactly living the high life. They're making ends meet and the SALT deduction hit them hard. I texted Alexandria the other day and I'm going to try and meet with her and discuss this in more detail. I have a few progressives that are really well-known progressive, that are very interested in supporting restoration of the SALT deduction. I'm going to try and persuade her that this is actually good for progressive policies here in New York.

Brian Lehrer: The thing that you just brought up, the cost of living in different parts of the country came up on yesterday's show when we were talking about various issues like this with Washington Post economics columnist Catherine Rampell. You're a good person to ask. Yes, the cost of living is so much different in general, around here than in other parts of the country, and yet the income tax rates are the same. Is it possible if we're going to talk about reforming taxes to look at somehow accounting for the cost of living in different places when figuring out what income taxes people pay, not just the pure income, comparing New York to somewhere in Wyoming or something?

Congressman Suozzi: Academically, it's a great idea, but I just don't see it happening. Based upon the time that I've been in Washington D.C, I don't see it happening. My predecessor, Steve Israel, used to push for changes in tax law and in the way people are paid and contracts with the federal government based upon the cost of living in different areas. He worked on that for a decade, and really couldn't get it to first base. You have to just understand and we all have to understand the country is just so different from place to place.

There's 105 million full-time jobs in America according to the 2016 census. It's different now because of the pandemic, et cetera but 105 million full-time jobs in 2016. Of those 105 million full-time jobs, 89 million people make less than $75,000 a year. $75,000 a year you're not doing great around here. $75,000 a year in Iowa or North Dakota, you're on top of the world. Our colleagues in Washington D.C. don't really understand that difference from place to place from region to region. It's a constant educational exercise. Academically, it's a good idea. I just don't see it happening, certainly, not in the middle of where we are in now, which is still a crisis.

Brian Lehrer: I'll take our first listener question for you from Twitter. Someone writes, wouldn't the obvious compromise on SALT be a higher cap? I guess maybe instead of your state and local taxes are only federally tax-deductible up to $10,000, maybe it should cap at $20,000, or whatever.

Congressman Suozzi: There are bills out there to do that. There's Lauren Underwood from Illinois who has a bill to cap it at $30,000. That would fix what's called the marriage penalty. Right now, it's a cap of $10,000. Well, it should definitely be $20,000, where you have a married couple that are both working or 30,000, 15 and 15, or 50, 25, and 25. That is an answer to the problem for a lot of people in New York. We have to understand, we don't want people leaving New York. We don't want those $500,000 year people, those million dollar a year people, those wealthy people leaving New York because they can no longer deduct their state and local taxes, which is happening.

When I was born in 1962, there were 45 members of Congress from New York. Today, there are 27 members of Congress and it's going down to 26, or 25 with the next census. This has been exacerbated by the cap on the SALT deduction, and by the pandemic, and by people working remotely. If we lose these people in New York, we lose our system. This has been a philosophy of the Heritage Foundation and the Conservative Think Tanks for years. They've wanted to undermine the blue states, they want to undermine the Democratic states because they don't want us doing our progressive policies because we are the laboratories for democracy.

We're leading the way. When they don't do stuff with the federal government, we still do it in New York. We still lead the way and they still do it in California, and they still do it in Illinois, and Massachusetts and Michigan and other places. This is hurting our ability. When they first set up the federal income tax code, this was a major debate, because of the fact that we didn't want the long arm of the federal government coming in and stopping state and local governments from doing the policies that they thought were best. They didn't want to hinder them by taking away their tax dollars.

Brian Lehrer: I guess it does raise a fundamental question in the way you're suggesting. I'm sure some people scratch their heads and say, "Wait, why are my state and local taxes federally tax-deductible in the first place?" The federal government could set its tax rates, if New York City or state or the state of New Jersey wants to set high local taxes it has that right but why at all should the people of Idaho or North Dakota or anywhere else subsidize our high local tax rates?

Congressman Suozzi: Well, it's not fair. It's just not fair that you're paying taxes on taxes you've already paid. The idea they're subsidizing us is the biggest phony baloney argument of all. New York state because we are as productive or because we have a mass transit system, for example, that makes the engine of New York City work that costs a lot of money, we're the most one of the most productive places in the world. We produce the income that subsidizes the rest of the country. We are the biggest net donor to the federal government of any state in the United States of America, as is New Jersey as our other blue states, huge net donors.

Kentucky where Mitch McConnell's from, or South Carolina where Lindsey Graham is from, or Florida, these are huge net takers from the federal government. We are subsidizing our own demise. We're paying for them to kick our butts. We have to figure out how can we get our fair share of our money back. We were hurt by the cap on the state-local tax deduction that made our state even less competitive and therefore less attractive, which is forcing people to move out.

Brian Lehrer: I think we have a SALT story from Patrick in Sussex County and let me make sure I have your location right, Patrick. You're calling from Sussex County, New Jersey, not Suffolk County, New York, which congressman Suozzi represents, right?

Patrick: Correct. I'm in New Jersey, right. I'm a single father of two college-aged daughters. I pay over $10,000 in property taxes. I work a public employee job making just over $80,000. I'm neither progressive nor conservative. I think for myself, but it's killing me. I can't wait to leave New Jersey. Soon as I can retire, I'm out of here.

Brian Lehrer: Would the repeal of the SALT tax deduction cap change that for you?

Patrick: Well, probably not because there's so many other taxes, but it would help right now that I'm trying to pay college, and my taxes are over $10,000. Every little bit helps when you're trying to put kids through college.

Congressman Suozzi: Patrick's case is like a lot of people. This helps them make ends meet. The other point that Patrick is making is it's just too expensive around here, for a lot of people in New York and New Jersey. We have to figure out, especially here in New York, how to make ourselves more competitive, how to make ourselves more attractive so the people who go to work every day can actually afford to live here. That's a big challenge for us. What's going on in the state right now with increasing taxes is going to chase some of the other people out of the state. We had to figure out how--

Brian Lehrer: I was just going to say, Patrick is your poster boy, right? Says he's making about $80,000 a year, but his property taxes alone are more than 10,000. This deduction matters to him. Patrick, can I ask since obviously, your property taxes are the primary tax burden here, why do you think they're so high? I know this is a perennial issue all over New Jersey, but why do you think they're so high? Is there something wrong with the fact that they're so high that can be fixed?

Patrick: Well, two-thirds of them go to the schools roughly, and I know that there are ideas out there to consolidate school districts. There are more school districts than there are municipalities in New Jersey. I'm in a K to eight district that we send the high school students out but like I said, two-thirds of the money goes to school taxes and Sussex keeps getting more and more their share taken out. It's setting to the Murphy sending to the city schools and taking more and more. Only two towns or two districts in Sussex County got an increase or that stayed the same this year. Every other school district got money taken away from the state by the state.

Brian Lehrer: Interesting. Patrick, thank you so much. Please call us again. We really appreciate your story and adding to the conversation. Sussex County for people who don't know the County and the Northwest corner of New Jersey. Let me go to another caller.

Congressman Suozzi: Brian--

Brian Lehrer: Go ahead, congressman.

Congressman Suozzi: Brian, you and I talked about this 15 years ago, 10 years ago, because we talked about property taxes. I was the County executive in Nassau County. I ran for governor of New York against Eliot Spitzer, got my butt kicked in the Democratic primary, but I fought for the property tax cap in New York state because people like Patrick and other people can't afford for their property taxes to keep on going up every year. We have a cap now in New York state, that's been pretty effective at slowing down the rate of growth but there were two other recommendations that I made.

When I lost for governor a year later, Spitzer appointed me as chairman of the New York state commission on property tax relief. Patterson kept me in that job when he took over Spitzer's job. We wrote a report and said, we need to do a property tax cap. We also need do a circuit breaker, which is that you don't pay above a certain percentage of your income and property taxes. Third is that there needs to be more state aid to our school districts because the way schools are funded is either through state aid or through property taxes. The more state aid you get, the less your property taxes will be. I have other recommendations related to all the mandates that we have, that we should go back to guidelines instead of mandates.

Brian Lehrer: You anticipated that I was going to bring up our conversation from 2006 when you were running in the Democratic primary for governor against Eliot Spitzer because of something that's being reported about you and potentially something next year, but as a little tease for the listeners, we'll get to that in a couple of minutes.

Let me acknowledge that there are a good number of people calling with similar stories to Patrick's, the caller that we just heard. There were a lot of people who feel that they're out there in that situation. Middle-class people, not even six-figure earners at all, paying more than $10,000 in property taxes who really feel ripped off by Trump and the last Congress that passed that cap but because our time is limited, I'm going to take a call of pushback from your district. Anne in Greatneck, you're on WNYC with Congressman Tom Suozzi. Hello.

Anne: Hi. Can you hear me?

Brian Lehrer: I can.

Congressman Suozzi: Yes.

Anne: Long time, first time. Congressman, I'm a constituent of yours, I actually feel somewhat differently. I understand the reason why, and I feel very badly for the people who have called in with these terrible stories, but your constituents, for the most part, don't need this. My taxes went up considerably. I can afford to pay it, most of the people in the North Shore can. This bill is too important to scotch. This bill is going to save this country and we need that right now. I understand you need to negotiate this but it is very, very important that we get the 1.9 trillion to do all of the work that is in the bill.

Brian Lehrer: Anne, let me clarify your question for the rest of the listeners. I think the Congressman gets it but let me make sure I'm hearing you right. You're saying if the vote on the whole infrastructure bill is so close in the house that it goes down because congressmen, Suozzi won't support it because it doesn't include SALT repeal then, "Oh, my God. What are you doing, congressman?" Is that basically your question?

Anne: Yes. Thank you.

Brian Lehrer: Thank you. Congressman.

Congressman Suozzi: The bottom line is that I support the idea of dueling a big bold infrastructure bill. When you're talking about a $2 billion from this first traunch-- I'm sorry, $2 trillion for this first traunch and another trillion dollars, or even more, maybe another $2 trillion for the second traunch and all the money that we're spending here, we can fit into this, the $300 billion it will take to restore the SALT deduction. I've been in politics for a long time, most of my adult life off and on. I was first the mayor of my hometown, Glen Cove, 27 years ago. I want to get this deal done, but I need to look out for my taxpayers and I need to look out for those people that are making $150,000 a year or a hundred thousand dollars a year who can not stay here because they're getting crushed.

I'm happy that you can afford to take this and you're willing to be generous in this and pay more taxes, but there are some people, this is existential for them, and I'm going to fight for the people that I represent and I'll negotiate and I'll get a deal done. There's already been tremendous movement with more members of my caucus joining me in this pledge and saying, "No SALT, no deal."

Very positive words from Senator Schumer, who actually I introduced a bill to restore the SALT deduction in January, the same day, Senator Schumer introduced a companion bill in the Senate to restore the SALT deduction. Again, Brian noted earlier that Speaker Pelosi has spoken favorably about the SALT deduction. Even, treasury secretary, Yellen, and others from the White House were saying they're willing to negotiate. We're going to get a deal done and we're going to help the people that we represent.

Brian Lehrer: Are you with Senator Joe Manchin the centrist West Virginia Democrat, who wants to limit the corporate tax hike to a 25% rate, not that 28% that Biden wants?

Congressman Suozzi: That's not my fight, my fight is about SALT. I think that the corporate rate has to go up. I think that the rate for the highest earners should go up to 39.6. It's absurd that they reduced it from 39.6 to 37. The economy was very good at the time as people remembered. It didn't make any sense to reduce the top rate from 39.6 down to 37. I have no problem with raising the corporate tax rate. I have no problem with raising the individual rate because if it's at the national level, it doesn't hurt New York. No matter where you go in the country, you're affected the same way. I don't want it to be that it's something that hurts my state specifically so that we are hurt here while we're subsidizing the rest of the country,

Brian Lehrer: Congressman Tom Suozzi for another two minutes before we run out of time. Before you go, I see two local politics reports about you in the press. One is you've endorsed Brooklyn borough, president Eric Adams for mayor. The other is that if Cuomo doesn't run for reelection next year or is sufficiently weak, you might run for governor. Can you confirm either of those stories?

Congressman Suozzi: I endorsed Eric Adams formally yesterday. I think that he'd be a great mayor for the city of New York. I really enjoy my job in Congress right now. I think I'm being pretty effective. I changed the course of the debate on the SALT issue, for example. I'm on the Ways and Means Committee, it's a very effective committee. You know that I ran for governor back in 2006. Didn't work out too well for me. It didn't work out too well for Eliot Spitzer either, but the reality is that right now I'm focusing on doing my job and fighting for my district and we'll see what happens next year.

I'm obviously interested in being the governor. I ran for governor once before, but I liked the job that I have now. My wife said to me, during the pandemic, we had a lot of time to talk about a lot of things, she said, "Anytime, you try to plan ahead, it never worked out. You have to just let things happen the way they're going to happen. Just focus on what you're doing now." I'll take all my political advisors' advice, but my wife's advice is the most important [chuckles].

Brian Lehrer: That's very candid, not only about your wife's advice, being the most important but also that you're exploring it and you're saying right out front, you're exploring it and you'll see what the conditions are next year. Just in case, are there any lessons from your own earlier run or from the legacies of Cuomo and Spitzer that would inform a Suozzi '22 campaign?

Congressman Suozzi: Well, when I was younger and I was really just very full of myself and very cocky and, I was a world leader. I was the mayor of my hometown, the youngest mayor. I was the youngest County executive. I won a primary I wasn't supposed to win against Tom DiNapoli at the time, now our New York state comptroller. He was endorsed by everybody. I was endorsed by my wife and my mother and I won that race [crosstalk].

Brian Lehrer: They say he could be one of your opponents in the Democratic primary for governor next year, but go ahead.

Congressman Suozzi: Right. Who knows? Then I did the Six Albany campaign where I battled with Sheldon Silver and Joe Bruno and tried to change the culture in Albany. I got the Medicaid cap and then I was like, "Wow, I'm just going to fight for what I believe in. Keep on fighting, fighting, fighting, and I'm just going to lead with my chin on the things I think are right." I got smashed. I didn't know what I was doing in statewide politics.

I've learned a lot since then. I understand the importance of the five boroughs and really three of the boroughs in a Democratic primary. I understand the idea of working together with people and you can't just go it alone. I won't run for anything if everybody says, "Are you crazy? Don't do it." Which is what I did last time. I'll listen to people. I had a little bit of humility beaten into me. It was a good learning experience for me. I have no regrets. I've had a great life, I love public service and whatever happens, happens.

Brian Lehrer: Queens and Long Island Congressman, Tom Suozzi. It's always great to talk to you. Thank you very much for coming on today.

Congressman Suozzi: Thank you, Brian. Thanks for giving me so much time.

 

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