WASHINGTON – The powerful Republican leader of the House tax – writing committee said he won’t accept the Senate’s…
WASHINGTON – The powerful Republican leader of the House tax – writing committee said he won’t accept the Senate’s plan to fully eliminate the state and local tax deduction that’s vital to states like New York and New Jersey.
Rep. Kevin Brady (R-Texas), chairman of the House Ways and Means Committee, said he believes the final tax bill will include his compromise to keep some property tax deductions.
“I’m convinced that this is where we’re going to end up, ” Brady told “Fox News Sunday.”
State and local tax deductions (SALT) have been a sticking point on tax reform legislation that President T rump wants signed into law this year.
The House is expected to vote on its plan this week that would eliminate the deductibility of all state income and sales taxes, but preserve property tax deductibility capped at $10,000.
The compromise was needed to get enough moderate House Republicans from high-tax states like New York, New Jersey, California and Illinois on board.
But in the Senate, where the states most affected are represented all by Democrats, the plan would fully eliminate SALT deductions.
Minority Leader Sen. Chuck Schumer (D-NY) warned House Republicans that if the Senate passes its version, it’s unlikely the Brady’s compromise plan will be adopted when the two chambers work out the final product in conference committee.
“The House’s so-called ‘compromise’ would be saying to the middle class we’ll only chop off four of your fingers instead of all five,” Schumer said in a statement Sunday. “Both the House and the Senate bills would raise taxes on millions of middle-class families, particularly in the suburbs, while providing a huge giveaway to corporations and the wealthy.”
The Senate Finance Committee begins its mark-up on the tax bill this week.
A vote on the House bill is expected before Thanksgiving.
Chief White House Economic Adviser Gary Cohn said he’s “confident” the plan has the votes .
Asked whether he expects a mass exodus from New York if the tax reform plan passes, Cohn told Fox News’ “Sunday Morning Futures” that he won’t be surprised if people move to states without incomes taxes.
“That’s been happening already,” Cohn said. “If you look at the Texases and the Floridas – those states have been growing at a much more rapid rate.”
Rep. Peter King (R-L. I.) said Brady’s so-called compromise plan isn’t good enough and he wants state and local tax deductions restored.
King accused the Republicans of engaging in “class warfare” by asking the “rich” to pay more, but defining wealthy as households that could make $400,000 as civil servants and first responders in areas around New York City .
“They weren’t born with a silver spoon in their mouth,” King told “Sunday Morning Futures.” “These are hard-working people and they are going to get screwed by this bill. I’m not going to vote for it.
“I didn’t run for re-election so I can go to my constituents and say I raised your taxes to help people living in other states that already get subsidized by New York.”
Last week Treasury Secretary Steven Mnuchin told the Economic Club of New York: “For people who make over $1 million in the high tax states, there will be a tax increase… this is not about tax cuts for the rich.”
Mnuchin said Sunday on CNN’s “State of the Union” that “most” of the middle class will get a tax break, but acknowledged “it may not be 100 percent.”