House Republican leaders made a frantic attempt Wednesday to keep their aggressive tax overhaul effort on schedule, working to win over members who have balked at a proposal to ditch a key income tax deduction.
The House is scheduled to cast a critical budget vote Thursday which would set out key parameters for the tax bill and pave the way for Republicans to pass it without Democratic cooperation. But some of the Republicans concerned about the effort to eliminate or limit the existing deduction for state and local taxes have threatened to vote no, potentially blocking the legislation’s progress.
Speaker Paul Ryan, R-Wis., said this week that he plans to pass the tax bill through the House by Thanksgiving, and any delay in the budget vote could upset that timetable.
At least four GOP lawmakers from high-tax states said Tuesday that they intended to vote against the budget unless a deal is in place to at least partially preserve the state- and local-tax deduction, also known as “SALT.”
All were dismayed by language included in the latest version of the budget that refers to “reducing federal deductions, such as the state and local tax deduction which disproportionately favors high-income individuals.” They argue that many middle-class households in high-cost-of-living areas take advantage of the deduction.
“That language shouldn’t have been added to the Senate budget,” said Rep. Lee Zeldin, R-N.Y. “Unless I get more concrete information on a reasonable agreement, then I will be a no on Thursday.”
House Ways and Means Committee Chairman Kevin Brady, R-Texas, on Wednesday evening said GOP leaders will “take our time with those members, because we want to see people keep more of their earnings, regardless of where they live, including in high-tax states.” He said he is confident Republicans have the support necessary to pass their spending blueprint, “because this budget vote is about allowing pro-growth tax reform to occur. It isn’t the tax bill.”
House GOP leaders are planning to huddle with the blue-state Republicans on the issue following the budget vote Thursday, a leadership source said.
The committees crafting the tax bill are counting on the elimination of the deduction to generate hundreds of millions of dollars in revenue to offset rate cuts and other provisions in the tax bill.
Among the options under discussion are allowing taxpayers to deduct only their property taxes, not income or sales taxes; phasing out the deduction for higher-income taxpayers; or replacing the deduction with a tax credit that could also be phased out for high earners.
(c) 2017, The Washington Post · Mike Debonis, Tory Newmyer