FULL EPISODE: 11/7/21 Rep. Kevin Brady and Divvy Homes CEO Adena Hefets on President Biden’s economic plans

Published: Nov. 6, 2021 at 6:26 PM EDT
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Washington, D.C. – Greta Van Susteren interviewed Rep. Kevin Brady (R-Texas), the ranking member on the House Ways and Means Committee, and Adena Hefets, CEO of Divvy Homes, for Gray TV’s “Full Court Press with Greta Van Susteren” airing Sunday, November 9, 2021.

On the global minimum corporate tax, Rep. Brady told Van Susteren: “I think the losers would be the American tax base, because those dollars won’t come into our coffers, they’ll go around the world.” Brady continued: “This administration loves high taxes, even if it makes us uncompetitive.”

On Federal Reserve Chairman Jerome Powell, Brady said: “I’m losing confidence in him. I think this Fed has been in denial about inflation for a long time.”

And on the economy and President Bidens’s agenda, Brady said: “Inflation, unfortunately, looks to be persistent, long term, and unfortunately higher. And I think it’s not just COVID here. The policies under President Biden encourage people to stay home and not reconnect to work. That continues to cause real problems, and I think only gets worse if this Build Back Better bill makes it to his desk.”

Divvy Homes CEO Hefets said that the global corporate minimum corporate tax “100% impacts domestic companies.”

On the employee shortage in the U.S, Hefets told Van Susteren “it is definitely more challenging to hire today” because potential employees are being more selective. “What we are seeing is that people are coming to us and they have 20 job offers,” she added.

Rep. Brady and Adena Hefets interview excerpts are below.

Rep. Kevin Brady Highlights

On the global minimum corporate tax

Rep. Kevin Brady (R-Texas)

The Biden White House is insisting on other countries having a global minimum tax, because they plan to raise America’s business taxes to some of the worst rates in the world.

Rep. Kevin Brady (R-Texas)

They know we’ll lose jobs, manufacturing, headquarters overseas, so they’re hoping our foreign competitors will make it a little less damaging. But here’s the problem, America already has a global minimum tax, other countries are happy to take our jobs, and are happy to take a bite out of our tax base with a very minimal 15% global minimum tax.

Rep. Kevin Brady (R-Texas)

And so at the end of the day, what I think the White House will bring back to Congress is a plan that favors foreign companies over American companies, and takes up to a hundred billion dollar tax bite out of America.

Greta Van Susteren

Isn’t the goal to sort of curb corporations, these multinationals with hundreds of thousands of employees, millions of dollars in revenue, from shifting their profits to tax havens and basically avoiding taxes?

Rep. Kevin Brady (R-Texas)

On the issue of moving overseas, we stopped that. In the Trump tax cuts what we did was stop businesses from exporting their income into low tax states, or bringing in their deductions to lower the rates here in America. That’s one of the reasons why companies moving overseas dropped to zero after we did The Tax Cuts and Jobs Act, and why there is no longer gaming of the system.

Greta Van Susteren

In this global minimum tax, who are the big winners? Because I know poor nations are complaining because they might have a lot of production being done in their country, but they won’t be able to cash in basically on the revenue.

Rep. Kevin Brady (R-Texas)

The four regions that come to mind as big winners would be China, Russia, Europe, and Japan, because this global minimum tax is being pushed only because America is sort of self-sabotaging our own competitiveness with higher rates on our businesses, both here and abroad. So I think they’re pretty happy with America’s rising tax rates because it makes them more competitive worldwide.

Rep. Kevin Brady (R-Texas)

I think the losers would be the American tax base, because those dollars won’t come into our coffers, they’ll go around the world. Yeah. I think that’s probably the short analysis of it.

Greta Van Susteren

Well, would Secretary of the Treasury Yellen like this? She’s the one, she supports this.

Rep. Kevin Brady (R-Texas)

Yeah, she does-

Greta Van Susteren

She sees that as something good for America.

Rep. Kevin Brady (R-Texas)

Yeah, I don’t think so. I actually think it’s a race to the bottom of growth and competitiveness. I think, as you know, the Biden administration doesn’t like low taxes and doesn’t like countries competing on that for jobs and growth.

Rep. Kevin Brady (R-Texas)

And so this administration loves high taxes, even if it makes us uncompetitive; we don’t, and we’re fighting it very hard.

On the SALT tax

Greta Van Susteren

Well, that’s sort of curious to me because the SALT tax, the State and Local Tax Deduction, is something Democrats want to get rid of because they say that it hurts people, but Republicans seem to be opposing that. So, I mean, it’s sort of the flip there.

Rep. Kevin Brady (R-Texas)

I don’t understand why Democrats seem to be hell-bent on what will be a huge tax windfall for the wealthy. More than half of the SALT deduction, if it’s repealed, goes to millionaire households or greater, when in fact the current $10,000 cap is very fair, it’s double the national average, it makes sure that those who don’t itemize, 90% of Americans, don’t subsidize the taxpayers who are wealthier and do itemize and-

Greta Van Susteren

Do you not see the irony though? The Republicans not wanting to do away with that provision and the Democrats do? I mean, the irony goes both ways to both parties.

Rep. Kevin Brady (R-Texas)

Well, it seems to me the $10,000 cap is very fair and reasonable. Lifting it is a hundred billion dollar giveaway to the wealthy a year. So the question is, is big tax breaks for the wealthy coming out of COVID your priority? It’s not ours.

On the economy

Rep. Kevin Brady (R-Texas)

I think most Americans have lost faith in the president’s competency on the economy. And almost half believe we’ll see a recession next year. None of this is good. None of this should be happening because 2021 should have been a banner year for the economy.

On Build Back Better

Greta Van Susteren

Build Back Better, is there anything in that bill, if there were standalone parts to that bill, is there anything in it that you would support or you think is a good idea?

Rep. Kevin Brady (R-Texas)

There is one provision that encourages more research here in the United States. It is one out of $2 trillion of these. It’s a bipartisan approach that Republicans and Democrats have been working on together, but that’s literally about it.

Rep. Kevin Brady (R-Texas)

You’ve got $400 billion in taxes on small businesses. They’re going to make the labor shortage worse because they’re removing the requirement to work from the child tax credit, basically chasing a million-and-a-half workers out of the workforce. And I think they’re going to make... I’m confident rising prices, inflation, will go over time, higher and longer as a result of more spending, fewer workers.

On inflation

Greta Van Susteren

Two questions, is the inflation transitory, number one. And number two, are you still lacking confidence in [Fed Chair Jerome] Powell?

Rep. Kevin Brady (R-Texas)

The short answer is I’m losing confidence in him. I think this Fed has been in denial about inflation for a long time; certainly, it was telling us there is no labor shortage when everyone in America, especially on Main Street, knew there was. And so, yeah, I’m disappointed in his performance, not his qualifications, but his performance.

Rep. Kevin Brady (R-Texas)

And secondly, inflation, unfortunately, looks to be persistent, long-term, and unfortunately higher. And I think it’s not just COVID here. The policies under President Biden encourage people to stay home and not reconnect to work. That continues to cause real problems, and I think only gets worse if this Build Back Better bill makes it to his desk.

On the minimum wage

Greta Van Susteren

In terms of how much money is injected in the economy, trying to control inflation, but keeping a robust economy. I don’t think you can ignore the question of wages, minimum wages. How can anyone possibly survive on the minimum wage? And even the one where some companies are raising it to $15. How do these people survive?

Rep. Kevin Brady (R-Texas)

Right now the truth is wages are going up. They are going up for Americans. The problem is prices are going up faster. So even with higher wages, a lot of families are falling behind. I think that’s why COVID and inflation are now tied as the biggest worries for Americans.

Rep. Kevin Brady (R-Texas)

I think the solution here is a stronger economy, better jobs, rising wages, rather than more government checks and more government benefits.

Rep. Kevin Brady (R-Texas)

For example, the paid family leave puts the IRS in charge of your medical time off, which I think is a horrible idea. Some of their programs like on childcare actually raise the price of childcare on families making more than $67,000 a year. So they’re going to jack up the wages for childcare workers, but make it more expensive for average families. It just doesn’t make sense.

On Glenn Youngkin’s victory in Virginia

Rep. Kevin Brady (R-Texas)

Yeah, a huge win. I think not just for the State of Virginia, but for the country as well. I think it’s clear that America’s rejecting these policies of just tax, and spend, and stimulate, and subsidize, and they want the Democrats to stop lurching to the left.

Rep. Kevin Brady (R-Texas)

What’ll be curious … is if House Democrats, who’ve already been abandoned by their speaker, the president, and their colleagues, I think recognize they’re now being abandoned by the voters, see if they stand up against some of these tax hikes and spending programs.

Adena Hefets Highlights

On the global minimum corporate tax

Adena Hefets, CEO, Divvy Homes

It 100% impacts domestic companies. I would say, I’m in Silicon Valley and have a tech company, and unfortunately, most tech companies don’t produce any net income, so we’re not going to be super affected by it. However, I do think that there are obviously, Google and Apple, much larger incumbents who will be impacted by this. My view on it is, clarity is everything, so if you know, you can plan accordingly. And so I think that just clarity around what’s going to be happening with the global corporate tax rate is the most important factor.

Greta Van Susteren

Well, those companies are sort of in trouble, I use that word lightly. In Europe, for instance, because they’re not getting taxed in Europe, it’s like the tax here. And so Europe and many countries are mad saying, “Look you make a lot of money in our country, our nations, but you’re not paying taxes”. So there is that controversy across the pond.

Adena Hefets, CEO, Divvy Homes

I do think that there’s this idea of where are you paying taxes, where the goods are sold, right where they’re actually being created. And there is going to be changes to the way in which they do business, right? I mean, they aren’t going to be optimizing for cashflow, and so if you’re not going to be paying 50% taxes, and you weren’t before, in a certain country in which your product is being distributed, for sure you’re now going to rethink hiring. Do I think it’s going to impact the U.S. and hiring here? I’m not so sure that’s going to be the case.

Greta Van Susteren

Divvy has raised a lot of money, been very successful, are any of your investors impacted by the global minimum corporate tax, assuming that it goes into effect?

Adena Hefets, CEO, Divvy Homes

I don’t know what all their positions are. I’m sure in some way, shape, or form they might be impacted by that. We have raised almost about $400,000,000 worth of equity from some of the top investors. I’m positive that some part of their portfolio might have been impacted but like I said, for tech companies with negative net income, it’s not as widely talked about in the tech community. But I think that we recognize that for a lot of other companies it will be more broadly impactful.

On the employee shortage

Greta Van Susteren

When you talk to your friends who are also in the business world, are you hearing that they have problems getting employees? Is there really an employee shortage for them?

Adena Hefets, CEO, Divvy Homes

Definitely more challenging to hire today than it has ever been in my four years…

Greta Van Susteren

Why? Why?

Adena Hefets, CEO, Divvy Homes

What we are seeing is that people are coming to us and they have 20 job offers, and they’re being selective and picky about where they ultimately want to work. And we’re really fortunate that we have a strong mission, we pay up to the 75th percentile for cash and equity. We offer benefits, we offer you pathways, and we let you work remotely. But if you’re not going to offer all of those things to your employees, you will be selected out of that job market.

Greta Van Susteren

Is this incrementally, has this been a problem that’s been creeping up? It’s almost like we woke up one day and all of the sudden, we hear all these companies are having a hard time getting employees, the employees don’t want to work at certain companies. Or is it just the media now putting attention on it?

Adena Hefets, CEO, Divvy Homes

Well, I think what happened is we were reset during COVID. Right? You were stuck in this day-to-day rut where you were going to your office every day and doing your job and all of the sudden, COVID one, changed the way that you had to work so you could be remote, two, subsidized unemployment for a pretty significant amount of time and three, gave you something that is time. The ability to sit back and think, is this the place where I want to be working? Is this the career that I wanted? And ultimately, I think even going a level deeper, I like to believe that it also caused people to reflect on what they are actually doing and if the company they are working for is actually having an impact on the world.

Greta Van Susteren

There are just so many new jobs and there just aren’t people to fill them. These people can’t just stay home, they’ve got to do something.

Adena Hefets, CEO, Divvy Homes

There was a long period of time where the jobs were being subsidized but we’re seeing, actually in our customer base today, is that those savings are running out. So we are actually seeing that in a day today, over the last three months, we’ve seen it more than we have ever before. Right? And when those savings run out, they do need to get a job. And you don’t wake up and say boom, I’m going to have a job the next day. You have to go out and have an interview. You have to get trained up, you have to get staffed, you actually have to be able to do the job, and that all takes time. So I think we’re kind of in this in-between period, where people are being subsidized before folks are going back to the workforce, it’s not going to happen overnight. I think it is going to happen over the next 6-9 months, we’re starting to see that in our customer base.

On Divvy Homes

Adena Hefets, CEO, Divvy Homes

Divvy creates homeowners, so we are a way to finance the purchase of a home if you can’t access a mortgage. So the way it works is Greta, you come to our website the same way with a mortgage you would go to get approved, you would get approved by Divvy. We would give you a budget and say, “Go out shopping for a $350,000 home in Dallas, Texas”. You would go out shopping, find the home of your dreams, you come to Divvy the same way you would say to your mortgage provider, “I’m ready, I found the home”. You come to Divvy, Divvy puts out an all-cash quick close offer for you, you move in technically as a renter, but we actually let you build equity in the property.

Adena Hefets, CEO, Divvy Homes

And at any point in time you can get a mortgage, refinance and take Divvy out and roll your equity or walk away and we’ll cash you out for the value of your equity.

On people having problems buying homes

Greta Van Susteren

You know with the property going up in value, and people’s wages not seeming to keep up I mean, what’s happened here? A lot of people really can’t buy it and I don’t think they even qualify for Divvy.

Adena Hefets, CEO, Divvy Homes

You’re actually hitting on one of the biggest problems that we’re seeing that underpins so much that is happening in the U.S. which is bureaucracy massive asset inflation and we are not seeing income inflation. And the result of this, is that across the board, what used to be you got married and had a nice starter home and you are able to afford a car and then go grocery shopping, is now feeling quite out of reach.

Adena Hefets, CEO, Divvy Homes

And so I think that this is actually a major problem and I think that Divvy tries to help us get in the right direction, but I don’t think that the economy is going to be changing very soon, so I do think this will perpetuate.

Greta Van Susteren

All right, so Divvy can try and address the problem in the markets that you are in, do you have any advice, how does the nation get out of this problem? Because people do want to own homes and I realize we can’t have Divvy in every neighborhood.

Adena Hefets, CEO, Divvy Homes

So, there are probably two ways that this gets solved. The easy answer is income increases, raise the minimum wage, pay people more, let income increase with inflation. Now that’s a little bit of a politically tough pill that might be a little bit hard to push through.

Adena Hefets, CEO, Divvy Homes

The other way is to increase supply .... Give people the income that they need, or it’s actually what I think is probably the better answer, is we need to find ways to increase the supply of housing. Right? And the way to increase the supply of housing is by bringing down the amount of regulations that you need in order to actually build a house. If we take it and we simplify and say, “Hey, you don’t need to go through three years of regulation to build a house, you need to go through six months of regulation.” All of a sudden more coal builders can build more homes.

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About Greta Van Susteren:

Greta Van Susteren is the Chief Political Analyst for Gray Media and host of Full Court Press. Ms. Van Susteren is a veteran of Fox News Channel, MSNBC, and CNN. Her prime-time Fox News Channel Show, “On the Record,” was number 1 in its time slot for 14 1⁄2 years. Before joining Fox News, she hosted CNN’s prime-time news and analysis program, “The Point with Greta Van Susteren,” and co-hosted the network’s daily legal analysis show, “Burden of Proof.” Her legal analysis for CNN’s coverage of Election 2000 earned her the American Bar Association’s Presidential Award for Excellence in Journalism. She continues to host the weekly 30-minute program “Plugged In with Greta Van Susteren” on Voice of America, which broadcasts exclusively outside of the United States.

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