maria: all right, worker productivity out and better than expected, wasn't it? >> it's been a while since it's been that good. very cool. maria: thanks for joining us, dagen, john. stuart: this is a very big day for your money, we get the full tax plan, was a new fed chair, i know we joke about it but it does affect you and the most valuable company in the whole world will reveal all. what a show. good morning, everyone. heads up, two hours from now the tax plan goes public. 11:15 eastern to be precise. it will happen during this program. in broad outline here is what is expected, top income earners, they don't get much relief, top tax rate at 39.6%. the middle class gets a big break, doubling of standard deduction. business gets 20% tax rate but it may be temporary.

the deduction for state income tax, that's a very big deal, look like it's gone. deduction for property tax, probably stays. middle america gets help and so does business and 1% does not. apple's profit after facebook, amazon and microsoft, warning, don't disappoint, investors would slam apple and maybe the rest of the market too. it was the profits, huge number, $575 billion. that's how much the value of stocks went up in october. wow, indeed, ashley. that's how a rally translates into dollars and cents. and then there's the federal -- [laughter] stuart: i knew it was coming. federal reserve, a new chair to be announced today. we are told it would be jarome powell, that's the judge, by the

way, the most powerful banker of the world. we will leave it at this, powell raises interest rates slowly. got it. [laughter] stuart: done. varney & company is about to begin. ♪ >> because of the sánchez success. here is a ground ball, right side could do it. the houston astros are world champions. stuart: there you have it. the houston astros win series first time ever for franchise. george springer, mvp. by the way, he hit five home runs in the series. ashley: nine weeks after hurricane harvey. stuart: isn't that good news? ashley: amazing. stuart: special moment while being interviewed after the game

shortstop carlos correa using the spotlight to propose to daniela rodríguez, no surprise, she said, yes. [laughter] stuart: that was a great moment. ashley: huge ring. stuart: keep it up. we love this stuff. wipe it off, please, it's time to check your money. let's get to the real world. [laughter] stuart: terrible thing to say. stocks will open higher this morning. 23 -- we are above -- close to 23,500. now, very strong profits at facebook, absolutely no disappointment there at all, but mark zuckerberg says future profit could slow down a bit because he's adding 10,000 people to police facebook posts, down it goes in the very early going this morning. not much, though. okay. look at tesla, talk about losing money and losing a stock price. it's trying, trying hard to ramp up the model 3 production, we will have more on that later.

look at it go down premarket 6% lower for tesla. don't forget am. they report profits at about 4:00 o'clock eastern time this afternoon as you walk up to the profit report, apple is at $167 per share. now, big story of the day, tax reform. two hours from now we get details on the gop plan, congressman jim, republican of ohio who sits on the tax writing committee, frequent guest of the program, there he is this morning. sir, welcome back, this is a big day. >> it's a big day, stuart. like you said, earlier, republicans are going to hit a few home runs also. stuart: okay. we will get to it in a second. there's a meeting, your committee briefs the whole republican party from 9:00 until 10:30, i take it you're going to that meeting? >> yeah, it started -- i'm here first but i will be going to the meeting. stuart: if all goes well, gets marked up, what's a realistic timetable for it to get to the president's desk if all goes well? >> again, the republicans will

mark it up, the republican wills take it to the conference to get approved and then we will take it to the house, hopefully it'll get passed off the house floor, the senate while we are talking is doing their own plan, they will pass that as well. then we are going to have a conference, but the way this is going, i hope that we can get this done by the end of the year and make things effective january 1. stuart: okay, sir, i realize there's a limit of what you can tell us because the full details will be released in two hours, but i'm going to ask you for clarity on a couple of issues, let's see if you can give it to us, number one, the 20% corporate tax rate, we hear might be temporary, your comment? >> well, the goal is, stuart, i know that i have been fighting for it and most members are fighting for it, we are looking to make it permanent. you will continue to see that happening. it's a goal that we want to have permanent. stuart: i have to press this, are you telling us that when we get the details two hours from now it will be a permanent 20% tax rate for corporations? >> i'm telling you that the goal

of my -- i know the goal of the committee and the goal that we try to do is to make sure that we release something that's permanent as possible. stuart: okay, here is another thing that we are hearing. state and local taxes, that deduction for income tax paid locally goes away but the deduction for property taxes locally stays, yes? >> i will tell you this, stuart, i know that's been a big contention, we are trying to make sure everyone is happy including states with high-income taxes. the goal is to do something similar like you said. in many cases it seems that you were sitting in the room. stuart: that's a complement. i will take it. 401(k)'s, now, we are hearing even though president trump said don't touch them, we are hearing that you might be able to put little less money into a 401(k), the advantage will be trend a liting, your comment? >> i will tell you during the camp draft and this draft i'm a

big proponent of 401(k)'s and so we work very hard to hopefully make sure that 401(k)'s stay in tact, that will be released at 11:15 stuart: i should have known better, really. you've been a wonderful diplomat for the last six months. today is the big day and we wish you well, congressman, really well, indeed. >> thank you very much. stuart: yes, sir, see you later. thank you very much. turn to go terror attack, the white house says the suspect should be considered an enemy combatant. president trump said he would certainly consider sending him to gitmo. give me the latest. ashley: listen, he will be facing federal charges but what we do know now that investigators say this was an attack that was a year in the planning, in fact, he carried out a trial run we were told with a rental truck last month. he intentionally chose halloween because he believed there would be more people on the streets. he originally by the way, had

targeted the brooklyn bridge as well. he wanted, he says to display the isis flag on the side of the truck and decided that that would bring too much attention as he carried out horrible plan. we do know also he had some 90 very graphic and violent propaganda, videos on isis on his phone. he's not shown much remorse at all, none at all, he wanted an isis flag in the hospital room. bottom line, this was one guy that was murder. a second suspect also from uzbekistan, 32-year-old, he's wanted for questioning, he has been located. stuart: okay, got it. thank you very much. ashley: you're welcome. stuart: i want to show our viewers exactly what president trump said about gitmo. roll the tape. >> mr. president, do you want the assailant to go to gitmo? >> i would certainly consider that, yes. >> are you considering that now, sir?

>> send him to gitmo, i would certainly consider that, yes. stuart: judge andrew napolitano is here. can the president have him put him in gitmo? >> can i change the subject? can he legally do it, answer no. if you read president bush's executive order, house those arrested in battlefield that were too dangerous to sent back and too problematic to send to trial. that is not the case here. so for that very practical reason nothing would be gained by sending him there. constitutionally, though, he has all the rights of an american citizen but for three. stuart: the guy is in, whether he has a green card or -- he's in legally. >> permanent lawful resident. they can no strip him of his constitutional rights. stuart: he's been offered

counsel. what are we doing with this is criminalizing terror as opposed to making it a separate offense with political consequences. >> why would you want it to be a separate offense? mohamed has been waiting for 16 years to be tried no cuba. this guy will be tried -- stuart: military courts. it's your fault. [laughter] >> i only wish i were in charge of judiciary. >> no, you don't know what you're talking about. stuart: that's true. [laughter] stuart: 16 years, you can't get him to trial. >> that's the military judiciary, the civilian judiciary has tried -- when you calm down -- [laughter] >> 35 terrorist cases in lower manhattan and gotten convictions in 34 of them. the average case from a commission of crime to trial takes 16 months, not 16 years. the president was dead wrong

when he said the american judicial system is a laughing stock. it is a model of fairness, efficiency and doing the right thing. stuart: no, sorry, it's not. you takes 6 -- 16 years. >> i'm not talking about the military system. stuart: i'm talking about the judiciary. >> it does not, civilians have no control except one guy named trump. stuart: there you go again passing words. the man has been in prison for 16 years, you can't bring him to trial and i believe was it a prosecutorial lawyer or defense lawyer had to appear in a full burka to accommodate his sensibility. he's made a mockery of us. >> if he had been brought to lower manhattan which was the site of the crime, 9/11, he would have been tried 15 years ago, but george w. bush said we are going to put him in cuba and nothing will happen. stuart: i think we disagree.

>> which is more such to sit in cuba 15 years or 16 years or him to be tried in two years and convicted in lower manhattan? stuart: neither. he should have been convicted in military court in cuba and put some place, i don't know where. >> what would the crime be? stuart: i don't know. >> there are plenty of civilian crimes. stuart: you lawyers. thank you very much for being with us. [laughter] >> any time. stuart: thank you very much, sir. >> i was hoping for rand paul as chair of the fed. stuart: we will bring you to capitol hill in a couple of hours when they unveil the tax plan. they said the devil is in the details. the suspect told investigators he had been planning the attack for a year. can you believe that? the man who interrogated ksm, the terrorist behind 9/11, james

mitchell is with us next. one committee in britain plans to ban access to nonurgent surgeries until patients improvement health. that means you have to stop smoking and lose weight. government control of your health? >> yes. stuart: yes, doc siegal coming up. unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.

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businesses count on communication, and communication counts on centurylink. stuart: the cybersecurity firm fire eye gave a weak forecast. the stock is down 7%. whatever happened to my information that's been hacked numerous times? where were they? a weak holiday forecast coming from gopro, down 9%, $9 a share. the latest on the new york terror attack. president trump tweeting this about the alleged attacker. here it is. nyc terrorist was happy as he asked to hang isis flag in his

hospital room. he killed eight people, badly injured 12, should get death penalty? joining us now james mitchell, the author of the book enhanced interrogation. james mitchell waterboarded ksm. obvious question, what would you do with this guy if you could? >> do you mean in terms of interrogating him? stuart: yes, sir, i do. [laughter] >> the laws are the laws. there are several different ways that you can interrogate that guy. i would try to figure out belief system. part of what happens with these guys, you know, i interrogated 12, 14 of the most senior terrorist in cia custody and there was never a problem getting confession that wasn't even none of the rough stuff was used for that. i simply say, who are you and they tell me, what should i know about you and they say

indication, i was the amir of cold bombing. what they want to protect is something to prevent future operations or people that are in their network and the difficulty there, basically three different ways to do it. not everybody protects the same information, the same way, right, so they'll talk to you freely about some things and not about other things and the questions for these guys are driven by intel requirements, not by what i want to know, so what you would be asking this guy are the questions that analysts and targetters feel like they need to follow up and you need to that directly by simply asking him or you could use a process called solicitation, becoming a jihadist and in the course of that, you direct his conversation on who he had contact with, where the radicalization occurred and who might have helped him along the

way, it's called solicitation and the final thing that you can do is deceiving. stuart: can you do that when he's in america, american judicial system, he's got a lawyer, i think he's got a lawyer, he's been read miranda rights, i presume, you can't do much with him? >> it's more difficult, it depends on whether he actually waived his right to a lawyer and -- and in that case, the fbi undoubtedly and probably the intel community in new york city, the law enforcement community will continue to try to ask him questions because they will try to figure out whether there's a network or not. stuart: can you deprive him of sleep? can you do something like that? >> i don't know. the last time i had a conversation with an fbi agent about that, they said if it was the same fbi agent asking the

questions, as long as that fbi the agent was the same fbi asking questions, you could keep the person awake. i doubt it. i really doubt it. stuart: where do you stand on that? this is my last question. the man is in the american judicial system, he has a lawyer, whatever, where do you stand on the limits of what you can do with him and ask him. >> well, where i stand is it has to be driven by what's legal and i think the american people have to make hard decisions. the question is are we going to give this man more rights than he allowed those people that he mowed down. stuart: good question. >> he took away their futures and, you know, we are going to try to turn him into some sort of a sympathetic figure. i have a problem with that. stuart: yes, sir. >> if we have a second, could i weigh in on what the judge was saying. stuart: real fast. >> the obama administration set

aside ksm's confession, he would be dead if the obama administration had not done that. stuart: vital information. thank you, sir. we will have you again on the show very soon and we promise that. thank you very much, sir. coming up tesla model 3 in deep, deep in production hell says elon musk making yesterday's loss the lagger nest that company's history. the stock is going down. we are all over it. is this a phone?

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stuart: tesla very much in the news. reported biggest quarterly loss ever. trying to spend a ton of money. ashley: they lost $619 million in third quarter. it was really quite alarming even to the analysts who realized that there was going to be problems with the production of this sedan, model 3. they were supposed to be ramping up to 5,000 vehicles a week on the model 3. in the third quarter, they made 260, the wall street journal has been reporting on problems with the battery pack in battery factory in nevada. report that is the body shop, this wasn't ready to ramp up production in model 3 and workers have been handmaking some of the parts for the cars. they are burning through cash, negative cash flow has now got

to $1.4 billion. all of this is really going to hammer the stock today. stuart: on the verge of breaking below. ashley: right. stuart: thank you very much, the opening bell is coming up and we will see a flat to slightly higher market. back in a moment ♪ traders -- they're always looking for advantages. the smart ones look to fidelity to find them. we give you research and data-visualization tools to help identify potential opportunities. so, you can do it this way... or get everything you need to help capture investment ideas and make smarter trading decisions with fidelity for just $4.95 per online u.s. equity trade. fidelity. open an account today. ♪

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stuart: opening bell. not sure we will get that much price moving for stocks before 11:15 when we get full details of tax code plan. we are up 57 points right no the get-go. 23,463. now 23 points higher. it's an upside market but not that strong. let's have a look at the dow 30. as you can see on the screen, it's half and half. winners and losers. now we have gone a little bit, we are dead flat, ashley webster is here, sit up straight. ashley: i'm trying. stuart: okay. scott martin and john, big tech companies, they've been on a tear with this latest round of earnings reports, then we've got facebook yesterday, we knocked it out of the park, scott, the stock is actually coming down a little this morning because zuckerberg says he's going to spend a fortune on security.

would you buy facebook at $180 a share? >> i would, stuart, we talked about this on monday about buying it and i will tell you what, i will continue to add to facebook here because you mentioned it, it was the earnings, top line growth is amazing, bottom line growth is amazing, mobile ad revenue numbers were amazing. it's just the fact that mark zuckerberg from time to time actually is a real guy. he's a real ceo and tells it to people like it's straight. so i had a little bit of a cry in the shower this morning to be honest when i saw the stock open because it was up about 5 bucks after hours yesterday, but this is a chance to add because facebook is a major growth engine for the future. stuart: okay, john, do you think that zuckerberg is emerging as a sufficiently matured guy to run a company as big and powerful and rich as facebook? >> i definitely think he is. i think the problem that they have -- scott is right, revenue is up 50% and global revenue is

up 5%, the problem they have right now is fake news and senator al franken asked great question, how do you possible miss that? they have to deal with this. governments when they intervene, compressed margins, you will see some margin compression this year because of adding 10,000 people to deal with fake news. stuart: apple reports after the closing bell. apple is $167 a share. we've got this from morgan stanley f people spend a thousand bucks on the iphone 10 this christmas, they'll spend less or nothing elsewhere. now, i'm not sure i agree with that. ashley: sucking all the air. stuart: yeah, sucking all the air. do you read it that way, scott martin, of sucking the air out of retail? >> i don't, i think it's a sucky production, actually.

back in like the mid-200's i guess it wasled that's when you'd have the killer products, like the phones, when those started going that would get people out to the stores, get people in spending mood. as people look at their job security and 401(k)'s at record highs, i think it makes you spend more at christmas and having a product like this gets you out in the mood. stuart: check the big board because we are up 11 points, again, not expecting a huge market move before 11:15 because that's when we find out details of the tax cut. that's what i think, at least. a couple of individual stocks, we have fitbit to start with, down 4%, their sales fell short. and we have a weak holiday forecast coming in from gopro down 11%. wow, you make a bad forecast and i will take it to the cleaners. kraft heinz, down 1 and a half

percent. yelp, they are looking down the road, they see less money coming in so not exactly a rosy forecast, down they go about 1%. wayfair, that's the online retailer, down big, the company lost a whole lot of money, a lot more than the street was expecting and down 20%. lower profits at avon, the company also lowered forecast down 5%. is anything up this morning? seeing fewer customers, down she goes. 5.8%. how about that? now we have wal-mart, they are planning to hold thousands of holiday parties in the store to give customers a reason to go in the store. the stock is up at 88. john, is that a good strategy, wal-mart store parties? >> it is a good strategy. it's not going to increase revenue that much. you have economy of scale. everybody shops at wal-mart. the biggest growth factor in

wal-mart is online business and that is big. stuart: yeah, but wal-mart, would you say is the best alternative, best competitor to amazon, john, do you say that? >> no doubt about it. they have the infrastructure nationwide specially in north america for same-day delivery of groceries and electronic items, they are a real competitor to amazon. stuart: good-looking chart on wal-mart. has gone up consistently, actually. amazon, they want to let you shop on black friday in augmented reality. ash, i know you can explain this to me. ashley: i think i can. in the amazon app you can click on icon, i don't know if it'll help sales, whatever household item you want, you can take camera and super impose the item as you move around your home. how would that couch look right there and you can actually see the couch and you can try all the different colors and everything, so it's really, you know, i think this is a really good example of augmented

reality being useful when you look as a shopper and consumer to see, wow, that looks -- i can see you walking in the house checking out, that lazyboy looks really good right there. stuart: what you did was make me understand augmented reality. gap, subscription service for kids' clothes, 10 bucks of clothes, is that a way to beat amazon, what do you say, scott? >> no, i like the idea, stuart, the reason they won't beat amazon is because let's face it at the end of the day you are still wearing gap clothes. i will admit, this is probably tmi, i still by my boxers at gap, but the reality is the beauty about amazon is you can get anything and everything there, the choice is what amazon benefits from. stuart: by the way alibaba, just hit all-time high.

talk about online sellers doing well. there you have it. 187 on alibaba. let's get to paid tv. how about this? a million people cut the cord in the last three months. cable companies worried about it, streaming is king. not immediate reaction certainly not from frontier. stream asking king. is anybody -- ashley: how could you? stuart: even i do it. case close. am i right, john and scott, streaming is king? scott, first. >> yeah, you're right, stuart, you know what the funny thing is about streaming, more fun to use and easier, you know what really annoyed me over the years when you think about the cable cord, costs, tacks and fee that is you see on the bill that basically add up to what you're paying for or double for the cable anyway, forget that stuff and just stream, your life away. stuart: john, the cable companies still usually going to supply me with my internet

connection, so they've got me any which way you go? >> yeah, that's one of the reasons i own verizon and great yield, internet connection of people streaming. content is king right here but when apple and facebook started getting into sports, the big four networks, traditional networks, they're in a lot of trouble, that's the only thing that sales right now ad rates live television like varney & company, everybody wants to be on the show. stuart: okay, i've got breaking news -- [laughter] stuart: well said, attorney general sessions speaking in new york, he's talking about the need for tech companies to comply with law enforcement. what do we have on this? ashley: look over the past year and this is interesting, the fbi could not access about 7,500 mobile devices despite court orders and having legal authority, remember the san bernardino attack and trying to get into the apple iphone. he say that is jeff sessions says he supports the president's call and replace it with

points-base system much like australia. he says this, terrorists should know that this administration will use all lawful laws including prosecuting in court and guantanamo bay. stuart: if you have a court to get into the cell phone, you should be able to get into that cell phone. ashley: in 7500 cases they could not get in. stuart: okay. details on tax reform coming in less than two hours now. is this a middle-class tax cut that help it is middle-class, john, first of all? >> yes, i think it is because of the deduction. i think they are doing the right thing. it's politically unpalatable, i think they are going to get this passed specially the corporate tax rate. i hope they make it permanent. stuart: what do you say, scott, this helps middle class class? >> 401(k) attack has me worried specially for the folks that have the savings, only savings they have in 401(k), if you take that away or change rules,

that's not good for middle class. stuart: i really want the detail on that one. ashley: how much does that hurt the market? that's money taken out of the market in many cases. stuart: 18,000 is the limit, if they trim it down significantly, that hurt it is market. ashley: it does. take money out. stuart: there's another proposal. we will find out at 11:15, gentlemen, scott, john, appreciate it. where are we? 10 minutes into the trading session, dead flat as expected. you don't make a big move before you get the details on the biggest tax reform plan since 1986. coming up, less than 90 minutes away, get the details on tax plan, the way it stands now, looks like middle america does get some help and so does business but in my opinion, the 1% does not. big deal. back in a second

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stuart: quickly check, stock market 5 points higher, don't expect much before the tax law comes out. disney laying down the law for movie theaters on the new stars. tell me quickly what's going on, nicole. nicole: disney is really bossing the theaters around even though they had fewer releases, for example, time warner had more releases than disney, but disney is still the behemoth bringing 26% of the box office. well, now what's coming, that's star wars, here are the terms that no other hollywood company is doing. in fact, disney will receive about 65% of ticket revenue from the film, they're also selling the theaters for the first four weeks, you to put it in the biggest theaters, big picture in tend if they don't comply, 5%, they have to pay disney in addition. stuart: okay, got it.

thank you very much, nicole. very important details coming in on the tax plan. here we go. this is what we are being told. the new tax plan has these brackets, 12%, 25%, 35% and, yes, 39.6%. the old highest rate, it's still in there. also it would roughly double the standard deduction and there would be created a new family tax credit. it also maintains the property tax deduction up to $10,000. whoa. congressman eric, republican from minnesota joins us now. sir, i'm sure you heard the details. here how it looks to me. middle-class tax cut, the 1%, they are going to get creamed, what say you? >> i will say the 1% will not get creamed but the tax cut is aimed to middle-income americans.

the folks in upper brackets will do okay, if they are investing, the other good news you should know is that we are putting rates in permanently for individuals, for businesses so the corporate rates at 20%, 25% for small business and individuals are going to see a big tax cut coming home. average family of $59,000, family of four is going to get 1200, 1,300-dollar tax cut. stuart: now, look, we are a business program, our viewers are investors and business people, you're tell mega, yes, for sure small businesses, the pass-through people, their top tax rate will be 25%; is that correct? >> that is correct. they'll be some guardrails with active versus passive income but the most important thing is we are focusing on growing the economy, adding percentages to gdp, getting the economy blooming again for all workers to bring more money home and take-home pay. stuart: you voted no on the budget -- >> i voted yes. stuart: you voted, yes, i'm

mistaken you for somebody else. you're full board, vote yes on the tax plan, no question about it? >> no question. i've been in the ways and means committee, we know how important it is to get the economy blooming again and too many people are living paycheck to paycheck and the economic recovery only help some people. stuart:ly break in for a second, this plan, we are told, maintain it is 401(k) as is, you can put to -- >> no changes made to 401(k) or ira, that continues. stuart: my producer is talking to me in my ear. give it to me, casey. the corporate tax rate does go down to 20%, and, sir, you confirmed that that is permanent; is that correct? >> that's correct. it won't expire in eight years. you had cliffs approaching. predictability for investors and people can count on it for confidence. stuart: it would repeal the

estate tax after six years so the death tax doesn't die immediately, it takes six years to get rid of it? >> but we also do double exemptions, double depositions for -- exemptions. 10 or $11 million, that could be doubled. stuart: double it, you can get up to $20 million, pass it to your estate and you don't pay tax, no estate tax? >> you will not be double taxed. you won't get taxed an put some of your employees out of business just to pay a tax. stuart: as you say, sir, i'm getting the details in my ears, forgive me for hearing voices, it does, indeed, cut the maximum tax rate on pass-through accounts to 25%. you know, we have gone through all details here and we pretty much know what the plan is as of

right now. that sounds to me like a plan which how could a republican vote against it? >> i think you're going to see broad support within our conference, they're going over it right now as we speak. details are going to be released in just an hour and you will be able to pour it. there's going to be interest groups and stakeholders who don't like changes on loopholes, et cetera, but this is what we need to do. it's only 400-page bill and it's going to take a lot of pages out of tax code. we are thinning the herd here. stuart: we are kind of laughing, only a 400-page bill. [laughter] stuart: i don't see how democrats can demagogue this? this is a give away to the rich, it's not. >> it's absolutely not. this is aimed at middle-income america. i would not be surprised. we will have democratic support in the house and certainly in the senate as this process goes forward. we want to get this done before year-end. stuart: forgive me, sir, this is breaking as we speak.

i want to go over details as you're watch to go make sure we have this right. maximum tax rate, pass-through guys, 25%. a new family tax credit, i'm not sure how that works but it's a new family tax credit. double the standard deduction. property taxes which you pay locally are deductible against your federal income tax but -- and here is a big deal, state and local income taxes are not deductible. that's a sticking point for a lot of people, sir. >> it is, but we have gone to that 10,000-dollar property tax cap as well as keeping charitable deduction and a mortgage deduction. so we have try today cover all of our basis here for what's important, the child credit has expanded and enhanced not only if you have a child that goes to 1600 but also $300 for the parents, each parent as well as

$600 for a dependent child. we are giving more aid to folks that really do have an opportunity to spend on higher education or taking care of disabled student or maybe a senior staying at home with their parents, they will get that credit as well. stuart: now, if you get all of this and all of this is in the package, what do you think the rate of growth will be next year? do you think we can get a 4%? >> well, testify get above 3%. i think confidently this will get above 3 and the psychology of the american entrepreneur is just going to be interested and excited about the opportunity with certainty for permnanecy in the code. reagan years to getting the economy booming again. stuart: i'm looking, you can see me moving around here trying to see what the market is doing. the market is pretty much dead flat. i don't think the news that we are breaking now has gotten out there at this point. i don't know which way the market goes when the news does get out there more prominently.

i want to ask you about timing, as we have discussed, congressman, hard for republicans to vote against this so i'm assuming it's going to go through. what's the timetable here? >> well, timetable is next week in the ways and means committee. we will have a four and a half mark-up of the bill, we will take it and go day by day. every day next week, it's probably going to be on the house floor the week after that. the senate may be off a week on their time schedule but we could have this passed by thanksgiving. i think that's the target so it's finalized before christmas holidays. stuart: okay, one more for you if i may, we will double standard deduction, 12,000, goes to 24,000, straight me out congressman, am i right in saying, that you can therefore earn up to 24,000 in a year, you will pay no federal income tax on that first $24,000, correct? >> that's correct. your first $24,000 would be

tracks-free, -- tax-free. we kept the top bracket and the president was confident in keeping the bracket as well. a million dollar level for couple. a million dollar level for couple. stuart: up to a million dollars a year for a couple. up to a million you pay 35% on most of it, over a million, you go to 39.6%, so the top 1% which currently pays 39.6 on 400,000, they get a break on the next $600,000 which is not going to be taxed at 39.6, have i got that right? >> yeah, for an individual i think it goes 470 to 500 for an individual. anyone making that much money will get break at first 12% or first 25% level, a little bit of

reduction in the rates. stuart: it's not quite what we were promised a year ago. we were looking -- everybody gets a tax cut. a massive tax cut. the greatest tax cut we have ever seen. it's not quite that, is it? >> well, i think this is moving in the direction of giving specially nearly everyone a tax cut. there's always going to be circumstances but the reality is that this is aimed at middle-income america. making sure we are boosting paychecks, people aren't living paycheck to paycheck. it's really important for economy and country. this is a historic day november 2nd, this year. ashley: it keeps the earned income tax credit but we understand it would eliminate the amt? >> that is is correct. eliminates the amt which hit a lot of middle-income taxpayers. stuart: have you been authorize today confirm all of this, congressman? >> i am authorized. i'm on the committee, we were up late until midnight last night and it's all being released within the next hour so it's coming straight to you now. stuart: so what you're telling

us is what the republican party is learning about 100 yards away from you where you are now, correct? >> that's correct. right, right. stuart: okay, if i were to characterize like this, would you agree, it's a huge break for the middle class, it's a big brake for business, it's not much good for 1%? >> that's probably a fair characterization and even those people in 1%, if they are investing in a passive income business or small business, they will see some -- some maybe tax reductions, but they are also going to be investing in more equipment for their company, more people, hiring more people and giving raises to employees. stuart: okay, what about the obamacare taxes, they are still in there on upper-income earners? can you do anything about that? >> that is is correct. that's going to be dealt separately and hopefully in the near future but we didn't want to confuse the two and wanted to move forward and making sure that the years of work in tax reform space was completed an was done. stuart: i've said that if you

remove the deduction for state and local taxes, there are going to be screams from high-taxed state, new york, new jersey u california in particular and a max exodus from those people going to florida and texas, what do you say, sir? >> well, i think that even keeping the 10,000-dollar cap for property taxes, we were listening to what the concerns were from a lot of members in those states. minnesota is a little bit like that too. and so we were attentive of that and keep permanency and at the same time address some of those real concerns that some people have with high-property taxes, for instance. stuart: sir, you're an unusual politician, a republican from minnesota. [laughter] stuart: how do you think -- i'm laughing here. how do you think your tax plan will go down with the good people of minnesota? >> well, look, minnesota is a purple state in reality, but, look, i mean, people have been hungry for tax reform.

this is a big issue that i have worked on for years. it resinates with the public. minnesota wants to grow just like every other state. we want to keep headquarters, manufacturing and innovation, this is a big part of tax reform that's going to make sure that that happens for our employees in my home state. stuart: forgive my if i go through details one more time. please listen to make sure i have this right. four tax brackets, 12, 20, 25, 39.6. top tax rate for small businesses, pass-through people, 25%. the estate tax, death tax repealed after six years, but the exemption has doubled up to that point. ic -- new family tax credit and doubling of standard deduction. thanks for being with us, congressman. you broke news for us. you didn't move the market but you helped us out a lot, sir. >> exciting day. [laughter]

stuart: great stuff, congressman, eric, thank you very much. ashley: the market is flat but we are seeing move in financial and real estate stock which is are moving higher on the news. stuart: got it. there's a whole lot more coming up for you. stay right there, please. ♪ can i kick it? ♪ yes you can ♪ can i kick it? ♪ yes you can ♪ can i kick it? ♪ yes you can ♪ well i'm gone i enjoy the fresher things in life.o. fresh towels. fresh soaps. and of course, tripadvisor's freshest, lowest... ...prices. so if you're anything like me... ...you'll want to check tripadvisor. we now instantly compare prices... ...from over 200 booking sites...

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stuart: we learned important details on the tax cut plan formally released at 11:15 eastern time this morning. here is what we know. i will go through quickly. just the bear bones of it. there will be four tax brackets, 12%, 20%, 25%, and 35%, and the old rate, 39.6 stays. number two, tax rate paid by pass through small businesses is 25%. that is the lowest level since world war ii. number three, you will get a property tax deduction up to $10,000, but the deduction for state and local income taxes goes away.

that is a very big deal. number three, we are going through the estate tax, not immediately. it will take six years. the exemption will be doubled. you have to be extremely rich to die and pay the estate tax. number four, the standard deduction is doubled from 12,000 to $24,000. that means you can earn up to 24,000 bucks a year and there will be no federal tax on first 24,000. what am i missing? anything else in there? new family tax credit. we got that. ash came in with this a middle class family earning 59,000. ashley: will get average of $1182 tax cut from that plan. stuart: tax cut. blake burman joins us from the white house. you have news how the freedom caucus is responding to this, conservatives. what have you got. reporter: talking to a member of

the house freedom caucus, your last point what the person, $1200 back, car repairs, food on table. maybe a trip not planned. i asked member of congress within the freedom caucus, do you like what you saw, what you heard from republican leadership? i was told quote, yes. looks great. brady produced as promised. i followed up by saying are there any objections here? do you like it on the whole? do you have any objections? i was told yes, they delivered on four major pillars. always details that need to be worked out but very solid work. that is one member from congress we'll get reaction throughout the day. one member of freedom caucus i talked to, very good. stuart: that is interesting point. freedom caucus had a big hand in the obamacare reform deal. most didn't like the original proposal. interesting to hear that they are on board pretty much with this tax plan that we have just gone through.

reporter: remember they normally move as a block together. that is just one person. they move as a block. one satisfied, potentially maybe most of the block is as well. stuart: blake we'll be back very, very shortly. thank you, sir. larry o'connor, wml radio show host and mediaite contributing editor. brian bemburg, professor at kegs college. this looks like this is classic middle class tax cut. they get the bulk of goodies in this plan, along with business, what say you? >> between your great reporting and i'm reading richard rubin's from "wall street journal." it looks like a mixed bag. this is not what we were promised. this is not what the president campaigned on, supposed to be tax cut for all. so clean, simple great to communicate about that everyone gets to a tax cut.

now we're back to the federal government picking winners an losers. my biggest take away, the winners and losers president pick something a lot different than the hillary clinton would have picked. stuart: i can't see how republicans vote against it, can you, larry. >> i can't see either but the sticking point with the pins and needle on the budget bill, the deduction of state and local taxes. stuart: larry stay there. brian, you know the details here. i'm characterizing this as flat-out middle class tax cut. forget the 1%, don't come out at well, but the middle class do very well. what do you say. >> business tax cuts are good for the economy. still harder to sell that. yes i agree with you, headline will be business. middle class taxpayers look, tell mow more how this works. stuart: let me jump into this. because the tax top tax rate for corporations comes down to 20%. it is permanent. it is i am med i can't think.

>> it is great. stuart: the top tax rate for small businesses pass-through accounts, 25%. that is the lowest level since world war ii. i have to say that is stimulative. >> this is pro-growth. that will juice the economy. as an economist i love that. long term that's great but for the sales job to the middle class, when you're not bringing down the top tax rate, there is not a lot there you will sell to the middle class. they are worried about getting rid of the state and local reduction. that message gets a little more muddied. they have to believe business tax cuts are good for them. president has to sell that. president has to sell that. there has to be more work jo expanding child tax credit is big one. doing away with the alternative minimum tax. that will help middle-class americans. the 1200 bucks is good. stuart: we detailed the plan. got that early. we started to give you the details. the market was flat at the time.

now the market has moved down. we have a 30 point loss. not a big loss by any means. i'm a little surprised at this. i want to bring in my colleague charles payne who specializes in the market, making money i might add. welcome to the show. >> thank you. stuart: can you explain this? why is the market down 30 odd points, when you have clearly a powerful middle class business tax cut? >> classic to degree. not even sell on the news. really digest the information before acting. this is a a lot to unpack. we will continue to change. perhaps one of the problems with respect to business, repatriation. george bush's was 5.25%. at 12%, this does not -- stuart: breaking news for me. i have not seen that. what is the repatriation tax rate? >> i think i read it would be 12% on cash assets. stuart: oh. >> and i believe, the benchmark was bush who had 5%

repatriation. so president trump has talked a lot, particularly over the last $48. he crunched his numbers of four trillion dollars overseas. i'm not sure you get four trillion dollars come back on top of taxes overseas. that may bother multinationals. apple when they report, they say they have additional quarter trillion dollars overseas. will they bring it back for additional 12% tax? stuart: that is a good sticking point. repatriation, you bring cash back here you pay 12%. >> right. stuart: do you know if it is limited in time? one-year window? >> limited time. i think they're talking about a new tax after that, a new foreign tax that would be, far less than what it is right now, maybe 15%. get rid of it all together. no, i mean really. stuart: i'm with you. >> that is when you get infusion of billions of dollars no one watching this show pays for. everything we're talking, why is

it so complicated? someone has to pay for it. another american or another business pays for the money. we're rearranging deck chairs. fine to rearrange to stimulate the economy? what about people overseas, people overseas paying for american wisdom and knowledge and know how when they buy a whirlpool washing machine? bring it back here to hire another whirlpool worker. stuart: 12% on cash assets. >> you can bring yours back. stuart: moi? you got me. brian bremburg, talk about the 1%. a lot of 1% will pay more. here is how it works. owed top rate, 39.6 is there. not going away. ashley: anything above a million. stuart: get a bit of a break for really high income earners. but also get clobbered by, you can no longer deduct state and local income taxes. if you live in new york, new jersey, california, illinois, connecticut,

massachusetts, rest of them, you well pay more, ain't you? >> i will take unpopular position here. i wish we were giving a bigger tax cut to the 1%. nobody likes to say that we want to focus on the middle class, if you want the economy going, you want to juice investment, you have to cut taxes for people that pay it. ashley: so they will create jobs. >> 70% r paid by the 1%. don't hate the 1%. unlock their capital. i wish republicans would quit running away from this looks like they continue to run away. that will hurt growth. stuart: larry, i can hear you, you're down there in d.c. i hear you agree what was just said there. >> i appreciate that, larry. >> you're absolutely right. we shouldn't run away from that at all. here in washington, politicians put fancy name on the bills. they will regulate length after necktie and call it the pink unicorn act. they call it tax cut and jobs act.

you need to sell the jobs and lower the corporate rate. lowering corporate rate means more people employed. if they freed up overseas funds with better than 12 1/2%, with something better that be charles is reporting, and tax cut for evil 1%ers that will create jobs. historically we know that happens every time. stuart: something i do not clearly understand here. clearly business and small business is getting a very significant boost out of the tax plan. market is heading south. now the market to a large degree represents corporate interests. corporate interests are going to be served by this tax cut that they're all going to get. i don't get why we're down 65 points. ashley: to charles 'point -- stuart: go ahead, charles. >> bottom line, what is growing part of this market? the part driving this market? think about object. s&p 500, over 50% of the move in the s&p came from five stocks. stuart: yes. >> those five stocks, those five companies are generating the majority of their money or majority of their growth outside of this country.

we want to make sure to bring that money back in. that is sticking point. natural down 65 points on a day like today, a lot of earnings misses, not a big deal. the ultimately the street wants to send a message to d.c., maybe you sharpen your pencil. stuart: why are homebuilders, put it back on the board. why, ashley if. ashley: i'm not sure. first they moved higher with the mortgage deduction stayed in there. positive for the housing industry. >> they did change it to $500,000. ashley: put a cap on it. stuart: up to value of $500,000. >> right. stuart: currently more than that. it's a million. ashley: yeah. stuart: so that mortgage interest deduction has been messed with. that is why homebuilders are down, right, brian. >> going after the property tax deduction, preserving this up to $10,000. this is going to negotiation. that could get whittled down a bit. if it is on the table that could

get whittled down. they have to find revenue. we vent talked where they find revenue. no idea how they pay for this. >> no details on that here. i think growth will help pay for it but they're dodging all the big questions. stuart: no, wit a second. if you restrict the mortgage interest deduction, that is revenue. you will take more in, right? >> i wan, are we talking here, we've been talking $6 trillion in tax cuts over 10 years. i want to know how that will get paid for. stuart: if you remove deduction for state and local taxes that is huge. that will bring in a whole lot more. >> not six trillion. that is pay-for. we haven't gotten details. >> what about supplyside pay fors? that is what we need to talk about. particularly the legend of ronald reagan, people talk about ronald reagan seem particularly republicans not to embrace ideas or supplyside success in this

country. i think republicans blinked. supplyside works. we'll get dynamic scoring, and it will go through and don't make draconian changes to appease chuck and nancy. stuart: i think they caved to political pressure. >> amen, charles payne. jack kemp is spinning in his grave. how do we pay for a tax cut? governor doesn't need to justify me how to keep my money. look at all the people dropped out of the job market with restrict tiff taxes and dormant economy. we see 3%, 4%, 5%, economic growth in next few quarters. people get to work, those are people currently not paying taxes at all. they're getted paid by the government to stay off the job market. so that is how you pay for it. stuart: that is true. by the way, the dow is still down. those 60 points. i think i'm right there. no, 70, 81.

we're going down here. we're down roughly, 70, 80 points just at the moment when the details on a middle class tax cut are revealed. and, this is what gets me. it's a huge business tax cut. you imagine, i mean if you were a retailer right now, you're paying a tax rate in the region of 30 to 35%. >> right. stuart: retailers get clobbered on this kind of thing. suddenly your top tax rate comes down 20%. you have a whopping big great boost to your bottom line. that is growth, isn't it? why is the market down eight? >> the market was anticipating those cuts. that is not news to anybody that we'll get 20%, 25%. wait a minute. stuart: there was all kinds of talk it would be phased in. that it wouldn't be permanent. it will not be permanent. it is permanent. >> seen the market go down much, much more if that would have come out. they're looking ahead at negotiations, stuart. this is not the end of it. this is the beginning of it.

as you said, you're already seeing republicans give indications they're willing to cave on high-end earners. market is looking what is next? what will campus, now with the details of the bill. stage two, stuart. this is not the end of the story. stuart: don't want to change the subject entirely, i know my good friend, charles payne, sitting next to me will be gleeful when he sees the rich liberals who have to leave, new york, new jersey, california, head straight to florida and texas because they will be paying more if they don't move. >> you know what? businesses have already left, right? stuart: that's true. in all seriousness. if you make, let's suppose you're really high income earner. five million bucks a year. you're a rich guy, okay? you live in new york city, new york state. ashley: you're getting killed. stuart: new jersey, california, you are about to pay whole lot more than you are already? >> five million might be better than the ones who just crack ad million. you know what i mean?

put away champagne, honey. it doesn't matter. go back to 900,000. [laughter] stuart: let me be clear here. you pay 35%, that is the tax rate, on incomes up to a million dollars. ashley: up to million. stuart: i think it would be 350,000 to a million, you pay 35%. that is down from what you pay now. but over a million, you will continue to pay 39.6. so you get a little bit of a break on some of your income. this is high income people. a little bit of a break, but don't get that much of a break when you throw in deductions that you lost, state and local taxes. i'm waving my arms around a lot. larry, take it away. what have you got? >> i had a terrifying nightmare flash before my eyes as big rich democrats move down to florida and texas and turn them blue. stuart: it is going to happen. >> all of those states with low or no income tax are run by republicans. what does that tell you?

and that is part of the problem here. really, republicans who are concerned about the deduction of the state and local income taxes, should use this as political weapon to change the statehouse in albany, get cuomo out of there. get tax relief in new york. don't whine about it. fix it. stuart: dream on, larry. when new york city goes republican or when california goes republican, i will expect to be dead. >> ruddy jewel, stuart varney. it can be done. good old rudedy, remember him. stuart: i remember it well. yes i do indeed. we're down 60 points on the dow jones industrial average. we had bullet points up on the screen. we keep those up as long as we can. bottom line, we had preannouncement, a huge leak, got it from ourselves, congressman eric paulsen republican from minnesota, about a half hour ago, that is the tax plan you're going to get. i would have thought it would boost the market. it has not at this moment.

it is still down 60 points. what do you say? what do you say, brian? i say the market end higher, what do you say? >> i say not on this i think market was already anticipating this. again the message to the middle class is muddier than you say it is. look at this as middle class -- something will happen with property taxes and state and local taxes. what does that mean for me? where does my tax bracket go? i don't see massive individual tax cut i was promised. looks more like tweaks on the margin. i like this stuart. i like the business tax cuts but i'm very sorry, those do not sell to the middle class, unless politicians sell them the way middle class tax cuts do. that message is too muddy. stuart: i say market ends higher, charles payne? >> i think ends slightly lower. but i agree with brian, not much on the tax thing. i think the street, most part, big money managers will not make

major moves based on this yet. it is not complete. the big surprise, repatriation. i thought single digit number. it is 12%. all the other stuff, even though it was messy was sort of conventional wisdom. stuart: are we getting any reaction from democrats at this point? usually some kind of a statement from someone? not seeing it at this point. >> got to love child tax credit. you know one thing i thought was interesting, $300 for parent in the house or non-child dependent. we have the boomerang generation. we have some folks, have parents and kids at home. that was interesting. that is more along the line of something a democrat would have done. that is something is in president trump's playbook, that helps him win over some of these purple states or some of these, i guess used to call them reagan democrats. stuart: we have congressman matt gates, republican from florida.

we understand that the state and local income tax deduction, that goes away. i expect you guys in florida will get a bunch of rich democrats coming down from new york, new jersey, california. are you looking forward to it? >> hey, we have 600 people moving into the state of florida. i just walked out of a with my republican colleagues. >> i'm with you long as you need. stuart: we have open mic. you walked out out of a meeting. what was it like? >> sure. a lot of enthusiasm and unity for the great tax cut that will revitalize american economy. as to the local state and local tax did he ducks, here is what i expect. every american claims up to $10,000 against state and local property taxes.

it won't be higher than that this is incentive for high-taxed states to cut taxes to supercharge the value of our economy. stuart: congressman, congressman. are you kidding me? do you really think that in california, oh, they're going to cut taxes? in new york state, they're going to cut taxes? >> stuart, they should. state of florida we have more people than the state of new york but have half the budget. they have so much waste. time in washington we send a message in high-taxed states you're not going to have the same competitive advantages that you have in low taxed states like the state of florida. i have happy for some deductions included for folks. people in state of florida should not subsidize deductions for people in new york, california, new york and illinois and new jersey. stuart: i'm with you. you walked out of the meeting of house ways and means committee. republican leadership briefing rest of republican party when is in this tax package. you say that it was greeted

almost unanimously favorably, very, very well-received. can you see any group of republicans or any individual republicans voting against this? >> well i think there is a key distinction between the tax bill and the health care situation we went through earlier the leadership understands this will be evolving process. i expect there will be changes made to this bill. we'll refine it through amendments on the ways and means committee and on the floor of the house. i see no major group lining up against this this is what markets are doing, excitement over tax cuts do to investor confidence and consumer confidence. after eight years of obama economy that trapped people. we have rescue plan for middle class and small business i think will unite all republicans on capitol hill. time we do that. stuart: here is problem i see, includes the 1%. top income earners, especially living in high-taxed states will be paying more tax.

that will not be stimulative. that is a problem. you need those people, all the money they got to get out there and spend it an invest it. you probably can't if the taxpayer, if the federal government is taking more off of them. does that concern you at all? also, congressman, this is broken promise. we were all supposed to get a tax cut and it is not happening. >>, no, we all will, stuart. remember on the first, first elements of income, there is still a tax reduction. as people go up the tax elevator, of income, they will be receiving same tax cuts that all americans are receiving. every american will see reduction in their taxes of this bill. i'm confident of it. remember also a lot of high earners pay the death tax. we're repealing death tax. that will give people incentive -- stuart: six years. >> phase it out over six years, but immediately, immediately we'll double the exempt sun that exists in the death tax.

so there will be immediate relief in the death tax right now. and then over the next six years, we'll see it completely abolished. that will be real, real opportunity for us to perpetuate the american dream by passing on small businesses and family farms. insuring the next generation of americans are more successful. stuart: have you heard from any estate tax lawyers, they're a cottage industry escaping estate tax, they will not be happy about this, congressman. there are a lot in florida. >> i'm sure they are. we haven't drafted this bill for lawyers and accountants. we drafted it for the american people. frankly one of the most exciting things, nine out of every 10 americans will fill out taxes on postcard. getting rid of compliance costs and compliance challenges that burden american families. stuart: okay. >> no reason why in america we can't have a fair, simple tax system. this is a great step in that direction. stuart: congressman matt gates, republican from florida.

larry, are you still with us in d.c.? no, we lost larry. brian bemburg, do you have any reason to believe this package as is will not go through and pass the senate? >> it will not go through as he talked about. stuart: this is the outline? >> i think it will go through. this is exciting incentive for blue states to cut state and local property taxes. good luck with that. stuart: do you have any reason to believe, will not pass, broad outline? >> no reason. it should pass. stuart: okay. down, given this news, is down 65 points. this could be, you sell on the news. buy on the rumor. sell on the news. maybe a bit of that. maybe there is also waiting for apple results after the bell. ashley: banks have been dragged lower. apparently lose deduction on deposits made with fdic. that is little-known detail

contained in this. that could be hurts banks. stuart: that could hurt. ashley: always devil in the details. >> stepping on a lego. stuart: i'm almost out of breath. we'll take a short break. we'll be back after this. whoooo.

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stuart: right here, "varney & company" on the fox business network, we probe the details on the forthcoming tax plan. we got it about half hour ago, in broad outline, here it is. this is a break for middle america. it's a really big break for businesses, small and large. no break, almost no break at all for the 1%. i'm going now to blake burman, there in d.c., who has reaction of president trump. what have you got? >> coming from the white house, speaking with senior

administration stuart, a little while ago. here is what i was told. there was a red line from the white house. 20% corporate tax rates. middle income, middle class tax breaks. they feel what the house ways and means committee produced today, delivers on that. that is a message they use going forward. that is a message you should expect to hear from the white house going forward. but on other side of this as well there appeared to be a little bit of relief that the house ways and means committee delivered on this. you can have all the talk and theory that you want but at the end of the day you need legislation. what was pointed out to me today, house ways and means committee moved that forward. they clearly feel that is good thing. they know reality this is one step after very long process. stuart: you make a good point, blake, they did it. they got it done. that is very important thing. blake, stay there. we'll be back to you shortly. dan holler is with us, heritage guy. dan, welcome to the program. good to see you. i'm not sure your mic is open.

say hello, again please. >> hey, stuart, how are you? stuart: there you go. we know the broad outline of the deal. you've been watching this show you know what is going on here. do you think this produces three or 4% growth next year, if it is implemented pretty much as is? >> i mean we're already at 3% growth. you can see this plan as known right now, coming out of the house ways and means committee it, may well get us to 4% growth here, what the president stated his goal being all along. we'll have to dive into the details obviously. details matter, especially something this complicated. there is a committee process that will happen. there is a senate process that will happen. we do have legislative texts. that is huge development. there are really good things there. there is a lot of work left to be done. stuart: what jumps out at me, we get immediate 20% tax rate for big corporations, and i believe an immediate 25% top rate on

small business pass-through accounts so to speak. that seems to be a big jolt, a big, what is the word for it, big stimulus for business to go out and spend and make more money. that to me is the highlight of the whole deal. what say you? >> yeah. those are two hugely-important provisions. very important to see that the house is committed to making sure they're permanent. the other thing also in there is expensing. that has not been talked about as much on top rates. allow businesses to deduct money growing their business. that is important thing as opposed to complicated depreciation schedules. stuart: dan, repeat that. i have not seen that. what is the deal on expensing for business? >> so there will be about five years of expensing. not full expensing but it is pretty substantial expensing for businesses. again we don't have the legislative language yet so details matter but will allow businesses to write off immediately a lot of investment in near term they do over the next five years.

stuart: hold on a second, dan, grover norquist with americans for tax reform. he released a statement on the tax plan. ash? ashley: he is pretty happy. he says this, the tax reform bill is a tax cut and a jobs bill. growth, growth, growth. long overdue. great news for taxpayers and those left behind by eight years of slow growth under obama. stuart: okay, back to you, dan. if this is, if this is, this tax package goes through, pretty much as is, with the main points staying as is, do you think it will be politically acceptable to across the board republicans? >> by and large this is where the direction we're heading. this is the direction the republican party is heading. i heard you mention earlier, the top rate staying the same. there is a millionaires bracket. that will be troubling for a lot of folks. but overall the package seems fairly solid. when you think about populist era we're in. managing to get conservative

policy and tax reform in populist other a, there will be concessions. we have to see what they will weigh overall. what you're seeing from the republican party as a whole there is a lot of excitement. i think the country as a whole will be excited because it will benefit hard-working men and women across the country. >> the market is going down a little. we were down before this news 70 points but now we're down 30 points. >> i haven't seen anything about carried interest or populism? ashley: that's a good question. stuart: hold on a second, dan. charles payne has a very good question here. it is about carried interest. that is the special tax rate paid by hedge fund managers and others. their income is not considered income in the classic sense. it is considered a capital gain. they pay very low rate on it. is there any change to that in this package? ashley: i don't think so. >> i have not seen any change in this point.

may be subject to change as committee marks up as we go to the senate but that does not seem top of mind of tax writers at this moment. stuart: dan, i would like to see that changed. i don't see how hedge fund can get away with 20% tax on income and it is income. are you with me? >> you talk about democrats voting for this with that unchanged? i can't see a single democrat voting for it. stuart: i think that goes away. i think they to very like everybody. dan, it is busy day. appreciate you being with us. all good stuff. anymore points to raise, brian bemburg? >> "wall street journal" did polling, how people thought about this. more thought taxes would go up, not down on this plan. americans are pessimistic. republicans need to sell it. how business tax cuts help the average person. i don't think they have done that. that is the opportunity. this is pro-growth. you can't take it on its face.

you have to tell the story. stuart: understood. it has to be solved. there are very easy things to sell here. especially the top 25% rate on small businesses. that would seem to me to be easy one to sell, because there are literally millions and millions of very small businesses which will have a tax cut. >> very true. republicans have been talking about that for a while and hasn't moved the needle with public opinion. >> i don't think they articulate this well at all. that is a great point. you look at small businesses, they are the highest ranked group, along with law enforcement in our country. people still believe in small business owners admire them a lot. ashley: yes. >> they would love them getting some sort of relief. stuart: larry o'connor. i think larry is there? larry, are you there? >> hi, stuart. stuart: i expect you run out of studio and start your own small business. larry o'connor incorporated. whatever you want to do. >> we're all c-corps, aren't we? what about llcs? where do they fit in?

stuart: are you still disappointed, larry. >> i heard your great interview with a florida congressman, the way they spin whole idea there was supposed to be tax cuts or all, on paper it is true, even if the top rate is not adjusted down of the these are marginal rates as you know. not just like everyone that makes that much money, pays 39.6. they pay the marginal rate as income comes in through the year. that rate is adjusted to 30%. technically they get a tax cut until they make the million dollars. no way that gets offset by lack of deductibility of state and low income taxes. i don't know if that bird will fly as they say or dog will fly? >> dog will hunt, bird will fly. americanism. i'm familiar with it. >> if that is their spin, that is share spin. i agree with all of the you if they're smart, messaging about

corporation and small business tax cuts that translates into jobs, jobs, jobs. stuart: we have kevin mccarthy making a statement. ashley: one of these statements made in the hallway as all this goes on. he was asked, who is giving you the hardest time in there? no one. these people are excited. this is according to mccarthy. i heard other comments. i will leave that aside. this is why they came to congress says mccarthy. this is most substantive bill people will move the country forward going in the right direction. kevin mccarthy, republican from california. stuart: i have not heard any republicans with reservation at this point, have you? ashley: one sly comment, one of the producers saw them, he said this sucks. maybe not everyone is on board. stuart: we'll leave that one out on family show. why not. if you're just joining us look on left-hand side of your screen.

we'll be rotating these panels with bullet points what is in this tax plan. we got this almost an hour ago. we got the graphic ready. so you can see exactly what is proposed it will change. it has to go through a committee or two. it will go through the senate. it will be adjusted and changed, et cetera, et cetera. that is the bare bones outline what you see. the timetable is, republicans hope to have this signed, sealed delivered and take effect on january the 1st, 2018. that is what we to got. what would you like to add? >> i want to serious sell 2000. that is small businesses. see if that outperforming large indices. that would be good if we take a quick peek. stuart: good luck with that. see how fast they are? >> slightly, but it is up. only indices is up.

that is reflective of small is businesses. that is domestic businesses. this is cheered on by domestic, american-based businesses than the multinationals who may be reluctant to bring money back at 12%. stuart: bremburg? >> that is lightest shade of green -- stuart: not there. the dow industrials. we were down 70 points when we got into this news. it is coming back. you're down 15, 16 points, 23,400. i would call that a comeback. modest, but a comeback. ashley: maybe details are being digested. stuart: we're trying to digest the details, that's a fact. some things may not be on the screen in particular. charles, you mentioned repatriation tax. let me explain this. there is around, i know there is 2 1/2 trillion dollars of

american corporate profits lodged overseas that has not come back to america. at least 2 1/2 trillion. it is probably more. this tax proposal is for a 12% tax on that cash. you bring it back now, you only pay 12%. >> that is one-time deal, right? stuart: one-time shot. instead of 35%, you pay 12%. incentive is, bring those trillions back, stimulate the american economy, put americans to work. >> just so people know, we did this once before under george bush. it was 5.25%. started in fourth quarter of 2004 into three quarters of 2005. we saw a sharp jump, drop in unemployment. gdp was 3.8 last time. ashley: 12%. 12% is disappointing then. >> i would hope it would be lower, much lower. stuart: 12%. 1/3 of 35% if you do it now. ashley: true. >> the dow industrials did turn

positive. we're right on the cusp of up and down. we're down a point. that's it. we were down 70. i think that is worth remembering. one other point i want to make about this deal here. the maximum, there has been a restriction on the mortgage interest deduction. at the moment you can deduct the interest on up to a million dollars worth of mortgages. in future, it will be, you can deduct up to a maximum of $500,000 worth of mortgages. so if you own a few properties, and you got mortgages on them, your deduction will be limited. the homebuilders hate this. all homebuilder stocks are down. ash? ashley: we have a statement from the national association of realtors to that very point, stu. it says in part, at first glance it appears to confirm many of our biggest concerns, eliminating or nullifying the tax incentives for homeownership puts home values and middle class homeowners at risk, from a cursory examination, this

legislation appears to do just that. that is the other side of the story from home building industry. stuart: be quiet, brenburg. no more cold water from you, thank you very much. we have to take a commercial break but after the break i want to detail some of the ideas within this tax package which will directly and immediately affect middle income families. back after this.

stuart: got this news development just coming to us from the new york stock exchange. time warner, the stock, its trading has been halted. that usually occurs when there is news. ashley: reports of an investigation regarding the doj. stuart: reports of an investigation involving the department of justice. the stock has been halted. it was halted at $92.31 a share. that was down what, six bucks. >> considering antitrust lawsuit we're told. to block the at&t deal. stuart: the at&t deal. ashley: that is where this is coming from. stuart: so the time warner stock was at 93.31. halted and now, it is halted, when it was down six bucks. there is an antitrust item involving time warner. with the doj.

that is the point. this is very big news, ladies and gentlemen. not affecting overall market but affecting time warner. back in a moment.

stuart: we have confirmed that jerome powell is president trump's pick for the new chair of the federal reserve. brian bemburg is with me? >> very smart move. continuity on monetary policy. ally with regulatory policy with financial institutions. very good move. stuart: really no change.

charles? >> more in line with president trump socioeconomic issues and regulations than yellen was. stuart: i'm reading this interest rates will go up, steadily, slowly. ashley: yes. >> he does want to remove accommodation but doesn't want to be crazy about it like taylor might have been. stuart: continuity. ashley: not a massive hawk. stuart: by the way the dow industrials now on the upside. when we were first breaking news of the tax package we went down over 70 points. now we recovered as market digested exactly what is going on. what have we got now? have we blake burman at white house? he is not there. i have brian, charles, larry, to go through this extravaganza. i promised, here is what i want to get to, i want to make sure, everybody knows there are elements of this package directly affect and help middle america, specifically, a child tax credit, the child tax

credit, okay. this is a tax credit, not a deduction. it's a tax credit. it goes from $1000, to $1600. furthermore, there is new and special dependent credit, $300 a pop. now we got more on mortgages? ashley: yeah. this is from adam shapiro, who has been hunting down more details. apparently with regard to the mortgage tax deduction, existing mortgages not affected. which is really interesting. but new mortgages, new mortgages going forward will be limited at 500,000. stuart: [laughter]. >> cut the balloons, baby. point out one other thing. in light of the response from the national association of realtors, i think last month, new home sales hit a record average 385,000 or so. we're still long ways off even at 500,000 threshold. stuart: let me recap. ashley: let's breathe. stuart: very important. ladies and gentlemen. as of now, you can deduct

interest on mortgages valued up to a million dollars. okay? it's a million. in future, under this tax package, it is going to be $500,000. so you could have mortgages up to the value of 500,000. deduct interest on all of that lot, but no more. ashley: right. stuart: now we find out if you have a mortgage already, you're in that mortgage, that thing is grandfathered in. so you can have a million dollars worth of mortgage, and you can still deduct all of the interest even after this tax package. larry, o'connor, you must be breathing a sigh of relief? >> thank god for that. that is basic fairness. you can't change rules of the game. people made smart, mortgage, economic decisions based on deductibility, now to say you can't deduct over half a million. that is smart. i like that. what we haven't hit on, how 401(k)s was looming large.

president drew a line in the sand. they didn't go through. that is very good and smart. stuart: relate to the news on left-hand side of the screen, the department of justice may sue to block the at&t-time warner deal. when that news broke, time warner stock was halted for trading. it is trading again now. it has come back a little. ashley: it was down 6% prior to the halt of the trade. stuart: now down 4.7%. there is antitrust action involving time warner on deal with at&t. time warner, bottom line, on the downside this morning. now i want to get back to this direct help for middle america. i want to bring you into this. you're telling me there is enough help for middle america. try this? the child tax credit goes from one this to $1600. there a new, non-child dependent, taking care of elderly relative in your house, you get 300-dollar tax credit.

>> for a guy like me. i have three kids. i will lose state and local tax deduction. i will get a little help. to be clear, especially with the mortgage thing as well, we're losing principle of simplification. can i say that? the congressman came on said with simplified tax code. no you are not. accountants and lawyers will have plenty to do. this is crazy. stuart: what else have you got. ashley: from adam shapiro. repatriation rate to charles's point, 5%. >> good. ashley: profits overseas at 5%. stuart: if you bring it back as cash. ashley: if you bring it back as cash. originally was 12%. that was the rule more. stuart: this is big deal for the future growth of america's economy. we have at least $2.5 trillion in american corporate profits lonned overseas. they don't want to bring it back here. because they pay too high of a tax rate. this tax plan propose as 5% tax

rate, not 35%. but just 5%, if you bring that money back in cash. you do that, you pay 5%, that is it. i would have thought, charles, this is a big stimulus to bring it back. >> that we were down 70 making rounds on the street to cause some of loss. >> he is a negative one. >> but i will say now, i will say now, be on the look out, folks for dems to say bush did this didn't work. will look at specious report created by senate democrats from 2011, measure 2004, to 2007. the dems will say it did not work. it worked big time. stuart: important news. not moving market yet. because we haven't said it yet. >> we were down 70 points. there is no saying, folks and goldman and other places didn't hear about it, before we got it on the air. stuart: we have it on the air,

it is 5%, special low tax rate. you bring the cash back from overseas. just imagine that you pay only 5%. larry, come into this. >> huge for jobs. stuart: bring it from overseas and only pay 5% when you bring it back here. that is huge incentive, isn't it? >> that is what we were hoping for, charles. to entice jobs from america. when you bring cash back, everybody knows that is what you do, when you have that cash playing with in america, start hiring up again. thank god. we're waiting for something like that. in terms of sim islyification, question with regard to mortgage deduction. understand something, doubling the standard deduction is enormous. there are a whole lot of people will weigh whether they itemize, spend all of that time, all that money, cost of compliance, keeping all receipts, doing all the falderal. where with the doubling standard deduction, i'm done. that is huge. stuart: we should look at

h&r block and their stock. >> right. stuart: if you really can, don't itemize, take the 24,000, you don't need h&r block. hold on we have reaction. tom mcarthur, republican from new jersey, who yesterday did not like idea of getting rid of state and local taxes deduction. ashley: this is from brian schwartz, our producer. look it is not enough. elimination of amt will soften blow of eliminating state and income tax deduction but the property tax deduction is still too low. i'm working on it. stuart: let me explain this. the original proposal -- ashley: 10,000 cap. stuart: you would get rid of all state and local taxes deduction there for. that is not the case. they will get rid of the deduction for state and local income taxes but they will keep the deduction for property taxes, up to 10,000.

congressman mccarthy says, that is not enough. ashley: too low. not enough. needs more. stuart: this is where the horse-trading is. you have to make sausage here. larry, you're expert at this. this whole package you're in d.c. the sausage factory. >> they talked about a two to three week committee process, relatively open process. you are pretty good supply-siders in influential committees. whole bunch of people from the freedom caucus. there will be horse-trading and may be some changes. can i make one point? why we always hear congressman say how will we pay for the tax cut but they never ask how will americans pay for this tax increase that we'll put through? that never ends up being a conversation in this town. stuart: you're right. that has been continually attack against these proposals as we heard so far, who will pay for

it? they reject the idea that growth pays for it. now, wait a minute. you're an economist, brenburg i remember tax cuts of early 1980s, ronald reagan put me in the american middle class an fulfill the american dream. those tax cuts brought in a lot more money from the treasury because it stimulated growth. you will tell me that this tax plan doesn't do the same thing? >> look, stuart, that's all true, yet debt went up and up and up and up and up. it will go up another $10 trillion over the next 10 years. all i'm saying, i love the growth story. this will create growth. >> that is question about spending, brian. that is not on the table anymore. >> that is my critique of congress, they're not even tabbing about that. there are both issues. we can't ignore one and talkgrowth. stuart: left-hand side of your screen. homebuilder stocks. ceo of national association of

homebuilders on this program tomorrow morning i think in the 10:00 hour. sorry, 11:45. 11:00 producer got in my ear. we turned positive briefly. now we're down briefly. we're coming up on 11:00 hour. we're not taking a commercial break. we're going all the way through. around 11:15 eastern time this morning you see the republican leadership line up. they will detail themselves the tax plan that we've already got details on, by the way. you get it from, dare i say the horse's mouth. you get it directly put it up on the screen again, please, because i want to go through it not in great detail,

but here's what you're getting. if you're just joining us, it's 11 eastern time almost. if you're just joining us, this is the plan that's going to be outlined officially 15 minutes from now. okay. no changes to your 401(k) or your ira. i'd say that's good news. >> yeah. stuart: a 20% corporate tack rate, no phasing in. a repeal of the alternative minimum tax, thank heavens. double the standard deduction. okay, that's important. it goes from 12,000 to $24,000 a year. in other words, if -- you don't have to itemize. if you're a reasonably lower-middle income person, you don't need to go to r h&r block or someplace. you just sign up on your 1040 and get your first $24,000 tax-free. that's very important. then you're going to create a new family tax credit. i think that is the $300 tax credit given to you if you are taking care of an elderly

relative, a non-child, non-child dependent in your house. >> the tax credit itself goes from 1,000 to 1,600. stuart: indeed, it does. directly affects middle america. >> correct. stuart: okay. it is now 11:00 eastern time. bang, there we go. welcome to the show if you're just joining us. i know a lot of people tune in at 11:00, especially our good friends on the west coast. next case, the tax brackets. there will be four of them. 12%, 25%, 35% and 39.6%. important point. at the moment high income earners pay 39.6 on incomes over $400,000 a year. in future it's going to be 39.6% over a million dollars. so there's a very tiny tax break for those upper income earners but not much. we're going to allow a state and local property tax deduction up to $10,000. but we've got a new jersey congressman who says he wants it to be more than that.

okay. double exemption for estate tax on inherited assets. let me explain that one. they were going to kill the death tax stone dead. they're not going to do that. they're going to phase it out over six years, but during that time the exemption -- that's the amount of money you're allowed to leave without paying tax -- goes, it doubles. i believe it's going to be doubled to around $20 million. don't quote me on that directly. okay. hold on a minute, there's more. [laughter] i can't do it until i've gone through this one. it allows the immediate expensing of new equipment, a huge plus for business. you go out and buy yourself a computer system, expense it, deduct it now. big deal. it allows small businesses to write off loan interest. okay, not bad. calls for modernizing the corporate tax system. i don't know what that means. one other point, and this is important. small businesses, the so-called pass-through people, they'll get

a maximum tax rate of 25%. down from, currently, 39.6. that's it. brian, charles, thank you very much, indeed. [laughter] we got through this thing. deputy whip, congressman patrick mchenry, is with us now, chief deputy whip, i should say. sir, do you see any problem getting this accepted by the entire republican party in the house and the senate? if this is the basis of the tax plan that goes forward? >> well, you're going through the checklist there, and you've got very good information. yes, this is a basis for us to pass this bill and get it done before thanksgiving. i think we'll see not unanimous support, but you'll see more than 218 republicans support this on the house floor in two weeks. it's a good plan. it focuses on keeping american jobs and at the same time giving middle class families a real tax cut, a substantive tax cut. it's a good plan. stuart: i'm sure you were at

that meeting this morning where the whole house republicans, all of them, were briefed on the details of this plan. i'm told that the atmosphere was pretty good. it was pretty solid, it was not exactly gung ho, rah, rah, but there was widespread approval. is that accurate? >> absolutely. what members want is more and more detail. the ways and means committee has been hard at work for weeks getting the details right, and we took another day to make sure that everything was as it should be. so members want to see the tax and get into the specific provisions of how this is implemented. we're all really well bought in at the top line though. stuart: okay. if i were to characterize the whole package as follows, i want to see if you'd agree with me. first of all, it does help middle america. number two, it gives great help to american business. number three, no help at all to the 1%. what do you say? [laughter] >> this is what the president said --

stuart: why don't you come sit with me and simplify these things, for heaven sake. >> no, you've simplified it better than i could. the issue is i personally think everyone should receive tax relief, that we have americans that are earning to the federal government more than they should. historically, that is true. we're paying a higher percentage into the government -- the federal revenue than ever before outside of wartime. but president trump has put his influence behind this, and he says, look, you're not going to touch people's retirement savings, you're not going to have a gradual stepdown on corporate tax rate. we need a jump for the american economy, and we need middle class families to win in this. truly, the president's influence has gotten us to this point. stuart: okay. sir, thanks very much for being on the show this morning. we appreciate it, we really do. this is a very big deal. it's the most important tax reform legislation or plan since 1986. congressman, we appreciate you

being with us. thank you, sir. >> thanks. stuart: yes, sir. david mcintosh, the president of the club for growth, think tank in washington. david, welcome back to the program. it's good to see you again, sir. >> great to be with you, stuart. stuart: again, i character i'd this as a big -- characterize this as a big help for the middle class, a huge help for american business, not much help for the rich, the 1%. what do you say? >> from a pro-growth standpoint, it's better than nothing, but there's also a lot of disappointment in there. stuart: yeah. >> they've caved to this class warfare and, frankly, we believe if you want to grow the economy, you incentivize people to get rich, and you should have tax cuts for everybody. stuart: yeah. it seems the me, i mean, look, i'm trying to go through the details here, but it seems like if you're in the top 1% and you live in a high-tax state -- new york, new jersey, california, etc., etc. -- you could end up paying, actually, more than you're paying now. that's not good. >> i think it's true all across

the board because of the various deductions they're removing. but also on the business side, the fine print, the details as they call them, they take away some of the real benefits. that small business cut, they take away 70% of it by saying only 30% of your income will be treated as business income, the rest you've got to pay that top 40% rate. so it really has taken away some of the pro-growth incentives. better than nothing -- stuart: i just want to jump in because they're going to come up and announce this formally shortly. what do you make of this 5% tax rate on profits that are currently lodged abroad, but you bring them back in cash, and you get a 5% tax rate. that would seem to me to be pretty stimulative. what say you? >> it is. that's a very good provision. but parallelling that, they put a new 10% rate on goods that are sold by foreign -- u.s. companies back to the u.s. we've got to look at all the details and clean it up.

frankly, my view is, stuart, this is like that budget vote. we need to pass it to get on to the next step, but the senate's going to write the real pro-growth tax bill. they blinked, they caved to some of the whole incentive and class warfare, and it could be greatly improved. stuart: sir, you think we could make big improvements in the senate? i mean, more stimulative -- >> yeah. stuart: you really think you could improve it like that? >> oh, i do -- stuart: and still get 50 votes? and still get 50 votes? >> interestingly, some of the holdouts on the health care like the senator from maine care a great deal about small business and the incentives there. so i think it's in some ways easier to get 50 votes in the senate, and then you'll get some democrats to come with it for a good pro-growth tax bill. stuart: keep talking, david, you're going to get that market back up again. sir, thanks for joining us on the show today. much obliged to us. >> my pleasure. stuart: scott shellady is with us. scott, are you in america or

london? you're in london, okay. there you go. [laughter] now, if you've been watching us, scott, you'll know the broad outlines of this plan. i understand that it can be changed in the future by the senate, but the broad outlines is what we've got. do you think that this stimulates the economy? >> yes. with a real broad brush, stuart, listening to what you've had to say and watching the program and reading it myself, i would say two big things. number one is remember those states, those blue color states that really changed my mind, i think trump's rewarded a lot of those people with this tax plan, right? he's rewarded his base, number one, and he's rewarded america, number two. that 5% repatriation tax is a lot bigger than i think we're even talking about right now. i mean, think about it, it's over $2 trillion. our economy in the states, our gdp is $18 trillion a year. so it's about 12% of our economy sitting abroad that we can bring back in at 5%?

i think that's huge. stuart: but the left will demagogue it and say it's a giveaway to big corporations. >> right. stuart: and when the money comes back, it'll just go to the executives of those corporations, it'll go to the stockholders, and they'll buy back stock. they won't employ more people. that's what they're going to say. >> that's what they're going to say, and i'd say back to them, okay, then leave it there. what's your alternative? >> right. >> think about it. you can have a big stimulative project, or they can just keep it there. i don't understand what they're arguing about. it's just common sense. stuart: the top rate on small businesses, the pass-through accounts i guess you could say, that's going to be 25%. that is the lowest level since world war ii. there's going to be an immediate 20% top rate for corporations. i see both of those as enormously stimulative to american business. am i going overboard on this? >> i don't think you are, and i want to see what happens over the next few days or weeks with

the russell 2000 because the small businesses getting that type of tax break and the benefit from those numbers you just reported, it's going to be interesting to see how that reacts because that's the life blood of america, those middle income, middle america, the small businesses that we know about every day and we visit and use every day, that's going to be what gets us out of this may laze we're in -- malaise we're in. very significant for them. stuart: you trade stuff. you trade commodities, stocks, futures. you know what you're doing in the trading arena. can you explain why the dow industrials are are pretty much dead flat despite what looks like a very stimulative tax plan? >> yeah, two things. number one, i think that the market and the folks i would speak to say let the horse trading begin, right? this is just the opening salvo. so we're not going to get too excited about anything just yet. it looks okay, and i think that because it looks okay that buy the rumor, sell the fact. this would have been a fact you would have sold, and we did a little bit, right?

now that they've seen what's really in it, the stimulative effects, they've brought the market back to unchanged. because it looks halfway different, we're unchanged on the day, that's the way i read it. stuart: scott, thanks very much for joining us. come back to america soon please, sir. [laughter] you really should. you're getting a british accent. [laughter] senator tim scott, member of the senate finance committee, joins us now. sir, welcome to the program, mr. senator. it's great to have you with us. >> thank you. it's good to be back. stuart: i'm already hearing from the left that this is a giveaway -- your shaking your head -- a giveaway to rich corporations. answer that one, sir. >> it's absolutely ridiculous. here's what we all know whether you're an economist on the left or the right. we all agree that the corporate tax is a burden borne by three groups of individuals; investors, consumers with higher prices and employees who have lower wages. so the fact of the matter is that the corporation might write

the check, but the tax revenue comes from individuals. so you want to help your employees get raises, one of the fastest ways to get there is to lower the corporate tax rate. if you want to help the consumers pay lower prices, one of the fastest ways to get there is a corporate tax reduction. stuart: got it, sir. [laughter] >> it's that simple. stuart: when this goes through the house and it gets to the senate, i think you'll probably have a hand in rewriting some of the provisions or changing maybe some of the provisions. is there anything you can tell us about now that you would like to see changed? >> well, there is going to be a robust conversation over the lowering of the amount of interest that can be deducted from your taxes on your individual side. it was a million, it's coming down to $500,000. i prefer around $750. so the preservation of as much of the interest, if you think about the average cost of a home and the average home loan, $500,000 is a threshold that some will take a look at and

raise eyebrow. this one area. i'm happy that the preservation of the retirement portfolio seems to be intact. i look forward to seeing the bill in its entirety and looking through it. but for the most part, i think we're heading in the right direction. we'll be able to say to the average american you get to keep more of your money and say to the future employees that we're going to create those jobs here by the way we treat pass-throughs and by lowering our corporate tax rate to be competitive in the oecd. stuart: here's a big sticking point, state and local income taxes. >> yeah. stuart: at the moment, you can deduct them against your federal return. the plan says you can't do that anymore, no more deduction. this really hurts wealthier people in high-tax states. would you make any change to that? >> well, there's no doubt that when you look at the s.a.l.t. as we call it, the state and local tax, there's a $1.3 trillion pay-for, and the fact that citizens in south carolina are subsidizing the tax rates for

taxes in connecticut, new york, new jersey. so the question is, and it looks like what the house did was they created a $10,000 property tax benefit, $10,000 deduction so that they would be able to solve the problem with some of their members. in the senate i think we're looking at eliminating the entire s.a.l.t., so it will hopefully, the changes that will happen will happen after thanksgiving, before christmas so that we can get this package to the american people so they can start enjoying lower taxes and greater benefits as soon as possible. stuart: senator, did i hear you correctly? in the senate you're looking at this whole s.a.l.t. thing, state and local taxes, at the moment the plan calls for getting rid of that deduction in its entirety? are you looking to restore it in its entirety? >> no, we're looking to eliminate it. what we're saying is that if you today have the deduction, tomorrow you would not under the senate proposal.

now, we're still working through the process. i'm on the side that using the $1.3 trillion to lower taxes is more important than preserving it. obviously, the house has come out with a hybrid plan that is not where i am, and perhaps the senate won't be where i am, but it certainly is the place i think we should find ways to do no harm to the average taxpayer throughout the country. stuart: senator tim scott, thank you very much for joining us on what i think is going to be an historic day. >> absolutely. yes, sir. stuart: thanks very much, indeed. ash, you've got reaction from a new york congressman. >> yes. congressman tom reid. he'll be on our show tomorrow, by the way. his reaction to s.a.l.t. being mostly eliminated except for that property tax deduction being capped at $10,000. i think we're close to sport, may -- support, may still be some movement on that cap size upward, but also we understand there's not much room to go further higher. so seems generally positive on it, although we need that deduction to go a little higher

on the property tax. stuart: i think it hurts new york and california republicans. >> of course it does. how could it not? stuart: now, i'm going to introduce to you someone who you know very well. he's a democrat, he's a former clinton pollster. [laughter] he makes a decent amount of money, and he lives in new york city. poor guy. >> yes to both. stuart: his name is doug schoen, by the way. >> thank you, stuart. stuart: welcome back. for folks like you and a lot of other people in new york, new jersey, california, etc., etc., this is bad news, indeed. >> very bad news. the republicans have said that every american will get a tax cut. not true. for people like me, people in california, connecticut, new jersey who are self-employed, this -- the elimination of the deduction for state and local taxes is a disaster. stuart: yep. >> it's going to lead people like me to seriously consider moving to places like florida or nevada, low-tax states. the e-mails i've been getting

from my friends and colleagues have suggested how serious self-employed people take it, high wage earners take it. stuart, i'll make a prediction here. i think we're going to get very few republicans in those high-tax states voting for this plan for a couple of reasons. one, they're going to hear from their constituents and, two, it could be an existential threat to their political careers if they vote yes. stuart: at the moment they're going to get rid of the deduction entirely for state and local income taxes. >> yes, sir. stuart: but there's word they will keep the deduction for property tax payments up to $10,000. >> right. stuart: that's not much of a -- >> it isn't. i was surprised to hear congressman reid's initial reaction because, again, i think there are 20 republicans in california and new york. >> right. stuart: 30. >> 30, okay, i stand corrected.

i think it's going to be very hard except those in the most rock-ribbed republican districts -- stuart: in low income districts. >> yep. stuart: we've talked to a congressman out of new jersey, they are republicans, they represent a relatively low income district where it wouldn't have that big an impact, especially if you keep the deduction for property taxes. >> fair point with one caveat. stuart: yes? >> the donors are all high income. they live in new york, california, connecticut, new jersey. they're going to be howling like i am. stuart: that's such a good point, because the donors control the money flow into politics. >> precisely. stuart: and they will have their way. >> i ultimately believe they will, especially with house members who are much closer to the people, much closer to the grassroots and much more in need every two years of campaign funds. stuart: now, if you had to move out of new york city, would you go to texas or florida? i know the answer, florida. >> florida, absolutely. stuart: what's wrong with texas? >> >> well, i have a place in

florida already -- stuart: okay. [laughter] >> it is a hospitable environment, and it's only two and a half hours away from getting to the set. so i think i could find my way to do the that once a week if you'll have me. stuart: we will consider opening a bureau in florida. >> there is one in miami, but being face to face with you and ashley is hard to replicate. stuart: oh. i'm joking -- >> no, you're not. >> it would be, and that's a huge issue for new york city. one of the things having a left-wing, almost socialist mayor in new york, bill de blasio, i'm surprised we haven't heard him howling about this because he needs the tax base. stuart: yeah. and california -- >> yes! stuart: -- they'll go to texas. >> texas or nevada. stuart: texas or nevada. new yorkers and massachusetts folks, they'll go to florida. >> absolutely. stuart: i'm kind of joking about it, but i'm serious. >> i am too. i mean, i have to tell you when you look at the implications for those of us self-employed, have

had great success, very proud of it, the cost of running a business is such that it makes an almost un-- stuart: it's not profitable. >> right, yes. stuart: you don't make anything, for heaven sakes. >> correct. stuart: guys like you work 12, 13, 14 hours a day every day, you always do. >> right. stuart: why should you not earn some income which you keep? >> stuart -- stuart: why are you a democrat? i don't get it. why the devil are you a democrat? >> because there used to be a democratic party that was committed to social justice, capitalism and a strong national defense. you're looking at what's left of that party, me and maybe four or five others. stuart: you're going to leave. you will -- >> give me a centrist alternative, and i'll be at the head of the pack. stuart: the centrist alternative is donald trump's republican party. >> don't see that at all, stuart. stuart: yes, it is. he came out with a middle class tax cut. it's nothing to do with the

upper class, as promised. >> and it's probably good for corporations, i'll say that too. stuart: yeah. >> but you know what -- stuart: what's wrong with that? they're doing well. >> what's wrong with that is you shouldn't have a las-based program -- class-based program that takes the job creators and slams them. stuart: i'll tell you one problem that i do see here, and that is that you're now concentrated -- this deal will concentrate taxpayers in a very small minority of the country. at the moment, what is it, the top 20% of income earners pay 95% of the tax. >> correct. stuart: that's going to change. it's going to be the top 10% of income earners who pay 90% of all the tax. >> right. stuart: that's very dangerous. you don't want to get into that situation, do you? >> no, because you want the people who earn the income, create the jobs, grow the businesses, form finish engage in capital formation, you want them to have an incentive, not a disincentive. stuart: okay. just stick around new york for long enough to make a few more appearances on "varney &

company." >> absolutely. [laughter] stuart: okay. look who's with us now. it is thursday, it's 11:21 eastern on a thursday morning, therefore, wheel in dan henninger with "the wall street journal." >> hello. stuart: i don't mean wheel him in -- [laughter] bring him in. look, you know the outline of this plan. i'm saying it's good for the middle class, it's great for american business, it's terrible, not great, for the 1%. would you agree with that? >> yeah, that's basically right. the middle class is going to get a tax cut. i don't think it's a big tax cut. it's my candidated. yes, on the business side and the corporate side, it's excellent. and incidentally, stuart, we heard yesterday that the corporate rate 20% was going to be phased in and then phased out in year eight and year nine. that was what we were hearing yesterday afternoon. stuart: yes. >> whoever in these negotiations got this corporate rate permanent really deserves a lot of praise and credit. that was a big deal. stuart: go ahead. >> but the top rate, stuart, is

going to stay at 39 for all time. that will never come down if this tax bill gets passed. it will always be 39% because of the huge cuts down there -- stuart: you don't like that, do you? >> i don't like that very much at all for the reasons doug was saying. these are producers, people who aren't just putting this money into second homes and yachts, these are the people you want to incentivetize to work hard to make that kind of money. stuart: now, that top rate, 39.6, that now applies or in the future will apply for incomes over a million dollars. so over a million you pay 39.6 -- >> i think for individuals it's 500,000. stuart: for individuals, yes. if you're not -- if you're filing singly -- >> right. stuart: -- it's 570,000, i think it is. you're right, there's no break there whatsoever. how about this, the 5% tax on cash repatriated from overseas? there's $2.5 trillion over there, 5% tax if you bring it back now. you like that? >> it's 5% --

>> we have an update from kevin brady on this, it breaks it down. it says the corporate profit repatriation rate of 12% for cash equivalence and 5% for illiquid investments. 10% minimum tax on foreign profits for corporations. stuart: so 12% cash -- >> yep. this is according to kevin brady. >> that was higher than we expected. >> it was. $12%. >> 12% is. stuart: why is the market down after all this good news? we were down 80, now we're down 2. >> this bill is as far from clean as we had hoped. i want to make one point here. what is going on is basically being driven by the byrd rule, the idea they can't increase deficit over ten years, and so they're constrained by that rule otherwise they can't go through reconciliation. and all this pushing and shoving and all this math that they're trying to do to make these numbers come out is a result of

the byrd rulemaking sure -- insisting that they can't increase the deficit after ten years. we've had this conversation on the program weekes ago. they should have increased it to 20 years or even 30 years, and i think we would not have had a bill as complicated as this one looks, and i think that's probably what the market is reflecting. this is going to be difficult to negotiate over the next two weeks, especially before thanksgiving. a lot of tax lawyers and accountants are not losing their jobs, and a lot of businesses are going to be focusing on the details of this bill, and i think they're going the find that some of it, it just rubs them the wrong way. stuart: good point. >> what's the price tag of this thing? according to brady, $1.5 trillion over the course of a decade. that is slightly above, higher -- which would not make it qualify for that fast track budget resolution in the senate. [inaudible conversations] stuart: is that what they do? >> they do, yes, but they have to come up with a number no matter who does it.

and if this is $1.51, i believe that's just over the threshold for that reconciliation. so they may have to scale back some of this. stuart: well, on the left-hand side of your screen that's the floor where they're about to announce the full details. that's what's going on left-hand side of your screen. maybe they're hassling over -- >> as we speak. stuart: -- $1.51 trillion over five years, they're got to get it down to 1.5. okay. everyone, stay right there, please. we're still waiting for the formal announcement. republican senator john thune joins us now from south dakota. welcome to the program, great to see you. >> good morning. thanks, stuart. stuart: i characterize this as a plus for the middle class, a big plus for american business, not much for the 1%, they're coming out. can you answer that briefly, sir? >> i think that's absolutely right. you've described it pretty well, stuart. i think it's a big win for middle income families and american workers. i think it's a big win for small businesses who are going to have incentives to invest and expand

and grow their businesses which means better paying jobs and higher wages for american workers. so this is a, you know, the framework that's been laid out, the bill that the house is working on, the one that we're working on here in the senate, if we can get those across the finish line, it'll be a big win for the american economy and a bigger win for american workers and -- stuart: i'm sorry, i've got to interrupt you, senator. speaker ryan is about to start -- >> okay. all right. stuart: mr. senator, thank you for joining us, sir. >> all right, you bet. stuart: here is the speaker, raul -- paul ryan. >> good morning! first, i want to thank these families for taking out of their day to join us. welcome, it is great to have you here with us today. fantastic. [applause] you are who this is all about. this plan is for the middle class families in this country who deserve a break. it is for the families who are out there living paycheck to paycheck who just keep getting squeezed. you know, about half the country

today is living paycheck to paycheck, and a lot more people are about a paycheck away from living paycheck to paycheck in this country, and this is going to help give people relief. the tax cut and jobs act will deliver real relief for people in the middle, people who are also striving to get there. with this plan the typical family of four will save $1,182 a year on their taxes. for many families, having an additional $1,182 more will make a real difference. that $1,182 more covers about a year's worth of gas for your car, it covers your family's phone bill for the year -- depending how much data, of course, your kids use. [laughter] that $1,182 more, that could help you pay down your debt faster, it could help you start and renovate your home faster. that $1,182 more for the average family, that will help you put more money away for college, it'll help you save for

retirement, it'll help you save for a rainy day. with this plan we are getting rid of loopholes for special interests, and we are leveling the playing field. we're making things so simple, we're making things so simple that you can do your taxes on a form the side of a postcard. with this plan we are making pro-growth reforms so that, yes, america can compete with the rest of the world. we're also making it so that families like these that are here can have more take-home pay. this is it. this is a very important and special moment for our country, for all americans. are we going to let the defenders of the status quo win and see our country continue down this downward spiral, or are we going to realize the promise of our country? are we going to revitalize the american idea? this is our chance to make sure that generations to come don't just get by, they get ahead in this country. let me turn this over to the person who has led this effort.

i am so proud of this man and this committee in this room. i want to turn it over to the chairman of the ways and means committee, and i want to thank all of the members of the ways and means committee for getting us to this point. ladies and gentlemen, the leader of this moment, kevin brady, chairman of the ways and means committee. [applause] >> thank you, mr. speaker. thank you, the american families standing with us today. and thank you as well, the ways and means committee members who have been listening and traveling across this country for this historic day. this is an exciting day, and i can -- think we all feel the excitement here in this room and here in this country. i know the american people have got to be excited as well. real relief from today's complex, costly and unfair tax code is on the way. with this bill there's relief for real american families.

there's relief for american workers, and there's tax relief for hard-working job creators of all sizes. and with this bill, we will grow our economy by delivering more jobs, fairer taxes and bigger paychecks to americans of all walks of life. that's especially true for low and middle income americans who are just sick of today's broken tax code, its impact on their jobs, their lives and their paychecks. under the tax cuts and jobs act, that's going to change, and it's going to change right now. for a middle income family of four making $59,000 a year, as the speaker said, this bill delivers tax cut of nearly $1200. for that main street business making $62,000 a year working day and night and weekends, a tax cut of over $3,000 for that main street business. that's your money. you earned it.

you deserve to keep it. and you should be able to use it for whatever you want. that's exactly what this bill will do, and that's why the tax cut and jobs act has president trump's full support. this is it, america. this is our opportunity to make tax reform a reality and deliver the most transformational tax cuts in a generation. so let's not let washington special interests, the tv pundits or the pessimists fool you. none of them thought we'd even get this far with tax reform, and they're wrong. now, working together with president trump, our colleagues in the house and senate and you, the american people, we're going to prove them wrong once and for all by getting pro-growth tax reform to the president's desk this year. thank you. [applause] >> all right. thank you, chairman brady, for your tremendous leadership, all the members of the ways and

means committee. the speaker said that this is a special moment. we are going to make our economy boom. for the average family of four, that median income earner in america making $59,000, we're talking about $1,182 in your pocket. you think about the holidays right around the corner, what that means in your life. you know, as i travel around eastern washington and visit towns and communities and just recently i was down in north carolina and in michigan, you think about $1,182 for someone who's living paycheck to paycheck, someone in kettle falls, that's making a big difference. or families like dee cook's from sterling heights, michigan. maybe they can put a little bit more money towards their mortgage. or victor, he's a restaurant owner in michigan, and he says, quote: we pay our taxes first, we pay our people second, we pay our bills third, and then if

anything's left over, we get paid. our plan's going to help people like victor. our plan also means more peace of mind to spend more time with your kids or maybe your aging parents or maybe just hang out with your friends. our plan is pro-family, and it's pro-economic growth because we value hard work and family. so if we're going to have a tax code that puts families first, i think we also need to recognize that today's working american family has really changed since our tax code was last reformed. with that comes big change for the realities that our families face every day. for one, women today are are making history in the work force. two out of three businesses are being started by women. and this means a lot of things. it includes an increase of working moms like some that are represented here today. we too are the faces of tax reform, and that's why i'm

pleased that our plan includes an expansion of the child tax credit, a family credit. it's going to help families have more money in their pocketbooks. pro-family, pro-growth. that's what this plan is all about. it's so that you can plan if more your future, realize your -- for your future, realize your fullest potential and empower american families to start dreaming again. and to see how, text tax reform to 50589. [laughter] >> i like it. >> well, this is an important day, and i hope you understand the significance of it. for every member, this could really become the most significant bill they ever make a decision in their term in congress. more than three decades for the last time we had tax reform this size. the american public has been asking for it, and i think it's a little ironic that today is the seventh anniversary of republicans being elected to the

majority in the house and then moving to the senate, and now we have a president who has pushed to make sure hard working americans get to keep more of what they earn. three major points i want to make. when i was 20 years old, i started my first small business. small business creates more jobs than any other thing in america. in this bill they'll get lower taxes, go to 25%, the lowest it's been in 40 years. more small businesses, more jobs. second, every single american is going to keep more of what they earn. the single american when you talk about a standard deduction, instead of the first $6,000 you earn tax-free, it's 12. for these families and couples, the first $24,000 you earn, tax-free. you get to keep it. you get to determine what's best to invest.

we're going to bring the money that's sitting overseas back to invest in american businesses. even before this bill goes into effect, i believe you're going to hear from businesses saying they want to come back to america. the cornerstone of what ways and means, of what president trump has worked so hard about, at the end of the day is that middle class family able to get more. as you heard from every other speaker up here, almost $1200 in your pocket. that's the difference. this is about tax cuts, this is about america first, and this is about the future. not only will america grow, we'll show the rest of the world how to lead. i want to introduce one of those individuals who got elected accept years ago, who -- seven years ago, who became a leader on ways and means and has really shown the direction of so much in this bill.

>> well, thank you, mr. leader. some time ago i was grocery shopping at about 11:00 at night in south dakota, and a woman came down the aisle towards me, and she had her hand full of coupons, her cart full of generic food, and she's like, christy, when is it going to get better? health care costs have gob up, my electricity has gone up, i had to carpool into town tonight to go to work, and i'm waiting for my friend to give me a ride home, but that means i missed my son's basketball game and my daughter's doctor appointment. i haven't had a raise in years. today this bill, i know, is going to bring relief to her and help things get better. she was on the forefront of my mind while we were working on all the details of this package. the lower rates for everybody, the simplicity, the mortgage interest rate deduction, the family tax credit. i hope you understand how much it's been expanded to not just take into account the child tax credit, but add benefits for also elderly dependents who may be in the home, children who are

living in the home going to college and really provide relief for those families that are struggling. and also starting january, their paychecks are going to be bigger, and that's going to make a huge difference for them. i became passionate about tax reform years ago, and it was because when i was going to college, my dad was killed in an accident on our family farm. he was 49 years old, he was my hero and my entire life all i had wanted to do was to grow up and farm with him. when he was killed, about a month later we got a bill in the mail from the irs that saided we owed -- said we owed death taxes. we had land, cattle and machinery, but we didn't have money in the bank, and i could not believe that the federal government would come to a family that had already paid taxes an all that income and said because you had a tragedy, now you have to pay again. we took out a loan, but it took ten years to pay off that loan, and it was very difficult to have our family operation. the only option that would have been able to us if we had a gas

station or grocery store would have been to sell that family business to pay those taxes. so i ran for congress on a lot of issues, but repealing the death tax is incredibly important to me because it's the most unfair tax in our tax code. it's a double tax, and if we're going to really get back to a tax code that helps people and doesn't harm them, that's fair, that doesn't have special provisions or penalties by us picking winners and losers, then we have to repeal the death tax. so i'm excited about the provisions in this bill and what it does for people in all walks of life. but its focus on bringing relief to to low and middle income individuals and also for farms and ranches across the state and other provisions that will allow them to expense and bring down their rates while they're being successful and helping our economy grow again. this is a unique opportunity for me, it's a unique opportunity for you, and it's a wonderful opportunity for our country, and i'm thrilled to be a part of it.

>> this is an exciting day for american families who are tired of paying too much in taxes, who are fed up with the tax code that's so complicated that if you call ten different irs agents, you're going to get ten different answers. people were fed up with an economy that's not growing, where they see their wages stagnant. and the good news is that changes today with this tax cut plan that finally puts money back in the pockets of working families. the if you look at what was done here, chairman brady and his committee at ways and means have worked incredibly hard to make sure that hard working families are going to get more of their paychecks, they're going to be able to keep more money. you're going to see wages grow by getting our economy back on track. and, look, every time i see a company moving jobs overseas, it makes me angry. now, we can be angry, we can be mad, but today we do something

about it by changing the tax code. we actually bring those jobs back to america. you're going to see tens of thousands of high paying jobs come back to america because right now america's dead last in the industrialized world because we have the highest tax rate. that needs to change. let's make america competitive again. that's what our bill does. and by making america competitive again, we have an opportunity to rebuild the middle class, to bring good jobs back to america and grow our economy. and just like these families behind me, they want to see more money in their pockets. they deserve to have more shots at the mesh dream. you're going -- the american dream. you're going to see more people have a real chance to get their piece of the american dream by having more money in their pockets and by seeing things like the death tax eliminated just like kristi talked about. this is an exciting day not only because we're standing here today as republicans in the house moving forward, but president trump is standing with

us. president trump campaigned on doing this exact same thing of putting money back in the pockets of hard working families and to make sure we can rebuild our middle class and get our economy back on track. so it's exciting to be working with president trump to do something that's truly going to grow our economy and give more people a chance to have their piece of the american dream. now i'd like to turn it over to peter roskam who's been a leader on the ways and means committee and helping make sure we can simplify this tax code that you can actually fill out, over 90% of americans will be able to fill out their taxes on a postcard. that's what similar police -- simplicity means, having more money in your pocket and being able to do this. peter roskam. >> well, thank you, mr. whip. you notice the children were becoming impatient with tax reform. [laughter] she's become a table pounder,

get me this action right now. look, what we're going after is we're directly attacking the status quo. the status quo of the tax code, the status quo of the internal revenue code is the problem. it's the few that benefit under the status quo. and it's everybody else that basically feels crushed by this and overwhelmed by this. and we act as in historically this is a natural disaster that we can't do anything about? it's not a natural disaster. the internal revenue code is a statute. it was created by congress, and it can be changed by congress. and what you sense right now, the optimism here on this podium, the sense of forward-lookingness across the american public is people are longing for something that gives them relief. they're longing for something that will bring back sort of the competitive nature. look, there's two views of the economy that are competing for the affections of the american people right now. one view is wrong.

it's the zero sum game view of the economy. it says if somebody is successful, that comes at someone else's demise. we reject that wholeheartedly. the other view says, no, no, no, when people are successful, it inures a benefit to everybody. now, we're sensitive to making sure everyone can participate, and that added structure -- these changes that we're proposing are transformational for everyone. so i think what we need to do now is to be diligent, to be convincing, to be invitational and recognize that opportunities like this are few and far between. and so i want to thank our speaker and our leadership team and chairman brady especially for being tenacious and being willing to listen to changes and to hear criticisms and critiques. but ultimately, to be incredibly disciplined and persevering to make sure that we have the opportunity to determine our

future. >> first, i've got to say, these kids are behaving better than my kids do at church. [laughter] fantastic job, guys. any questions? ken, come on up here. >> [inaudible] you guys worked hard last night to make sure you could make the corporate rate deduction permanent while parts of the individual/family credit are temporary. how do you square this? >> so we are focused on increasing paychecks in a major way. and we know the families who struggle the most have seen their paychecks leave for other countries. so we drove toward a 20% rate so our local businesses can compete and win anywhere in the world, especially here at home, so they can compete and create jobs beating china, europe, canada and mexico, can create jobs here in america as well. it was critically important the

rest of the world understand we're not going to be the door mat any longer. we're not going to stand still for 30 years as they leave us in the dust. we're going to compete, and we're going to win, and our jobs and paychecks for the middle class families are going to grow. and so permanence for businesses, permanence for families matter. we did create in this new family credit -- which i think you ought to take a close look at. look at our neighbors, you know, not only getting more help with their child, getting more help for themselves. and that college kid, and i've got one at home, you know, or that parent coming back to live. and the most important thing about that family credit, it doubles the amount of americans who can finally get help with their kids. this is a family-friendly tax code. and so i'm very excited about what this brings middle class americans, and i think permanence and certainty drives that growth.

>> [inaudible] >> thanks, mr. speaker. can you talk about the -- [inaudible] republicans compromise among themselves -- [inaudible] the health care bill even though you didn't ultimately pass that, and secondarily, for years you and other republicans have argued that all americans that pay taxes and work should get a tax cut. but with some of the elements of this bill and where your rhetorical focus today is clearly on people in a certain position on the income scale. and it's steered away from the sort of argument you've had with democrats over the past 104620 years -- 10-20 years. >> first of all, the political will is strong, and you can see it right here. we have not reformed the tax code since 1986. we're losing jobs and companies as a result of it. so the political will among the members here in the house, as shown by the members of the ways and means committee, is ironclad to get this done, because if we don't do this, we will not get

the kind of economic potential that we know we can reach. and the fact that people are living paycheck to paycheck in this country, about half the people, they need a break. so, yes, the focus is on middle class tax relief. the focus is on directing that tax relief to the people in the middle and the people trying to get there. and that is why we put our emphasis on that tax relief for those people who are in the middle, who are working paycheck to paycheck striving to get ahead. and what kevin just said, we've got to modernize our tax code so we can be competitive again so we can keep jobs in this country, keep businesses in this country. we have seen a flurry of u.s. companies moving overseas and becoming foreign companies. that will only increase if we stay at the back of the pack. that is why we have to work quickly to fix our tax system, clean it up, level the playing field, make it more fair so we can get bigger paychecks, more jobs and keep businesses in america and get businesses coming back home. we're the only country that says to a business if you make money overseas, keep it there because our tax laws basically don't let

you bring it back. this levels the playing field and gets that money back in our country to invest in our jobs here. that's going to help paychecks and competitiveness. and that is why republicans are absolutely committed to doing this. yeah. >> the bush tax cuts did not result in growth or higher wages or more jobs. why are you so certain that this will be different? >> so, first, can i just comment, did the speaker just sound like a former chairman of the ways and means committee? [laughter] i'm pretty sure. >> [inaudible] >> i know, you were getting ramped up. [laughter] >> getting going. >> so the question was what? >> our last experiment with -- >> oh. >> -- didn't lead to growth or higher wages or more jobs. we had quite the opposite. so why are you -- >> yeah. so this is a complete redesign of the code so we can simplify it so much that nine out of ten americans can file using a postcard-style system, lowering the rates, protecting more of

the first dollars you earn, making sure you have of strong middle class relief. but it's more than that. we're not just putting higher octane fuel in an old clunker of a tax car. we propose to drive a newer tax car that can compete and win against any country in the world. so that redesign for simplicity, fairness and competitiveness i predict under this tax reform plan america will vault from 31st in the world among our competitors to the top three as the best places on the planet for that next new job, that next new manufacturing plant, that next new research headquarters. that's what's different. >> casey. >> [inaudible] if republicans can't get this done, do you deserve to control congress? [laughter] >> what's your second question? [laughter]

we're going to get this done. you know why? because the american people are counting us. we told the american people this is what we're going to to do ife get this majority, and guess what? we're doing it. thank you, everybody. appreciate it. [applause] stuart: well, they kept it going for about a half an hour. the republican leadership stepped out and explained -- not in detail, but explained the rationale behind the plan. prior to this big reveal we'd said, essentially, it was good for the middle class, it was great for american business, not so good for the 1%. we didn't hear anything to contradict that. congressman sean duffy, republican from wisconsin, joins us now. congressman, what do you say? great -- good for the middle class, great for business, hopeless for the 1%. >> well, i think it's spot on. the sun is shining a little brighter today with this package finally rolling out. again, just to reiterate, if you

make $59,000 and you're a family of four, you'll have a 75% reduction in the amount of taxes that you pay. and the fact that we go to a territorial system which is going to allow overseas profits to flow to america, reinvest back in america, is a really great thing. the fact that we get to a 20% corporate rate is fan tastic. again, we're -- fantastic. again, we're going to make america competitive again. i think the naysayers aren't seeing how important this issue is for american prosperity and growth looking forward. stuart: okay. do you expect significant change when it gets to the senate? >> stuart, i'm done predicting what the senate is going to do. [laughter] i would tell you this, there's been a a lot of coordination and cooperation. unlike health care, between the house, the senate and the white house, so they have been fully abreast of where we're going and what we're doing. i think at least at the leadership level they've bought into the changes that we made in the package that's rolling out today. but, you know, we have a lot of senators -- there's 100 senators that think they have a better tax plan than the one that's

coming out today because they're the smartest and have the biggest egos of anybody i've ever met. if they can keep the egos in check and look at what's good instead of what's perfect, i think we can get this through the senate. and by the way, the biggest issue is the state and local tax issue. stuart: yes, it is. >> and that's a house issue because we have house members that have districts in high-tax states. we don't have senators from those high-tax state, so the biggest issue in the house is not remarkably going to be an issue in the senate which is a good thing for its passage over there. stuart: okay. congressman, hold with us for a second. i have a democrat still with me. he's fit to be tied, by the way, his name doug schoen. [laughter] your tax rate, you live and work in new york city -- >> i do. stuart: -- and because you can probably no longer deduct state and local taxes, the amount you pay is going to go straight up. >> i'll be close to 60% because we still have the medicare tax at 3.8%, thereabouts, that plus 39.6 plus 13% state and local, then you add in payroll taxes

and health care charges, why should i be in business, and why should i be in new york? this really discriminateds against us -- discriminates against us who create jobs, earn money and, frankly, live in states that are blue not red. so i'm really adamant. stuart: i do think we should remember that it is the democrat party that has insisted at almost every turn on raising taxes; federal, state, local. democrats want those taxes up. don't blame republicans for this. you blame democrats. >> stuart, this is a republican proposal with no democratic support. so i think it's fair, obvious and clear -- stuart: democrat taxes which you can no longer deduct. >> i admire your zeal in making an argument for which there is no support. [laughter] stuart: congressman duffy, what is it that you particularly like? pick out one item on this plan that you think is really, really >> this is a, this is the child deduction going from 1000 to

$1600, me with eight kids, that is great for me, stuart. >> i just remembered that. >> democrats are chomping at the bit to play economic warfare. they say the rich would pay more. guess what the rich, live in boston, new york and san francisco, doug just said. they argue for higher taxes until higher taxes are on the horizon. wait to see what democrats do when we deliver what they have asked for, paying a little bit more. they are going to hate it. on talking point but on policy side they will freak out. stuart: one question about the meeting this morning when the ways and means committee, republicans on it, outlined the plan to the rest of republicans in the house, you were at that meeting i do believe. >> i was. stuart: i am told it got a pretty, good, solid reception. it wasn't exactly, fist pumping it will kill them. we like this, it is good.

is that accurate? >> whether you heard about the 401(k) issue, mortgage interest deduction, a lot of issues we weren't sure the way the ways and means committee would go. all in all, people were pretty happy how they navigated issues house members had. i think there was pretty resounding applause for kevin brady, tax reform team. they did pretty good job leading concerns that many of us had. we're well-positioned to pass this through the house as paul ryan earlier said in the press conference. stuart: quick question about the property tax deduction. it will be capped at $10,000. we hear congressman from new jersey, which has very high property taxes want to raise that above 10,000. what is the chances of that happening? >> you know this came in, weren't going to write that off on the state taxes. that was included in the salt, state and local taxes. as a concession that provision was allowed back in up to

$10,000 of those property taxes. i think this is more about, what members from high-taxed need to get back to 218 vote total that can pass this if we don't have enough members, it might have to be increased. this come out a day late. so a lot of those issues i think have been worked out with ma "of those republican members from those states. i think we don't need to make too many additional reforms to that, that property tax issue. might hold at 10,000. stuart: sort of being cornered here because parliamentary house and senate rules. you have to get this thing marked up monday. you have to get it before the senate, before the end of the year. there are rules and regulations how you have to do this. it will be very tight. do you think you can get it done? >> i do. from the feeling i had in the conference today as this was rolled out, i do i think we're on track especially in the house

to get this done. stuart, the timeline is important. if we want to make it retroactive, we have to get it done before the end of the year. that is an important provision for us. to do tax reform and let people see benefits immediately. stuart: congress, hold on a second, retroactive to january 1st this year? >> we'll going to shoot for it. stuart: really? >> that will put me in the poor house. that was based on current law. to tell me another 6, 8, 10%, goodness, stuart i have to go and get back to work. >> stuart, if doug would come on, listen to have tax reform for everybody this would be a lot easier his rates would go down. because they want to play economic warfare, he is reaping that. stuart: congressman sean duffy from wisconsin, dream on.

ash, historic day. stuart: came out a lot sooner than it would. broke one hour ago. neil, it is yours. neil: stuart, thank you very much. this is what we're looking at. something better than we had before, that is the way republicans sell it. we'll taub to a whole bunch of them. something reshape the tax policy, crunching seven tax brackets down to four. there is a high one for very richest among us, still at 39.6% for couples earning a million dollars or more. what is permanent here, is the move to lower the corporate tax rate to 20% from 35%. that will not be phased in. it will also keep contributions to 401(k) tax plans and like, tax deductible. they did not touch the third rail. for now they are leaving it alone. so too with $300 per person credit f