Rep. Barbara Comstock, a Republican, said she is a strong supporter of tax relief but couldn’t support the plan because of its negative effects on the federal workforce, a key constituency in her Northern Virginia district. It includes lower tax rates on corporations, other businesses and individuals.
House Republican leaders signaled today they’re willing to work with GOP members from NY and New Jersey to address their concerns about eliminating the federal tax deduction for state and local income and property taxes. Budgets represent our values, and if this represents Republican values, then shame on you, ” said Rep. Jim McGovern (D., Mass.) “That, to me, is what this budget represents – it’s about making things worse for people.to pay for a tax cut for wealthy people”. They’ll be taxed at 35 percent. It may soon enough be rearing its head on tax reform. “We want the leadership and the tax writers to consider alternatives that will treat everyone fairly”.
“In the meantime, we are working with them, listening very closely to all our lawmakers, Republicans and Democrats alike, who are in high-tax states”, he said.
Democrats have assailed it as benefiting the wealthiest Americans while raising taxes on the middle class and cutting spending on social programs, including the Medicare and Medicaid healthcare programs for senior citizens, the poor and the disabled.
The GOP’s go-it-alone mentality is a recipe for still more failure. Big blue states still have Republican lawmakers in the House who will fight to preserve the state and local tax deduction.
Katko said GOP leaders in Washington understand the importance of the deduction to NY, and expressed a willingness to work together to find a solution in the tax reform package.
“There are going to have to be some tough choices here”, the Kentucky Republican said. “But I don’t think he sets out to be disruptive” to GOP leaders.
Compromise, however, can stand in the way of a top goal of the tax effort: simplicity.
“It’s a concern for every state – some more pronounced than other states”, he said of the state and local tax deduction.
Simply put, the federal tax code is broken.
For example, members have discussed ideas for maintaining some of the state and local tax, or SALT, deduction, a move that seems necessary to keep members from high-tax states such as NY and New Jersey from voting against the larger tax bill. The idea is to clear the way for tax cuts by trimming from the two entitlement programs, which together consume a quarter of the federal budget. Vote for me again, and I’ll come up with a good healthcare plan, and do you know the sick, sad, twisted part about this?
Will the Republicans’ tax cuts make up for the loss of these deductions?
In trying to broker compromises on issues like SALT, tax writers will likely be giving up some of the revenue potential of various pay-fors they’ve been eyeing.
One proposal in the plan doubles the standard deduction, a major cut for many middle-class income tax filers.
“A lot of House members trust a lot of senators to introduce their own tax reform bills”, said Rep. Steve King (R-Iowa), alluding to how senators seek to show independence by offering their own bills. “If we simply look at this as being deficit-neutral, you’re never going to get the type of tax reform and tax reductions that you need to get to sustain three percent economic growth”, Mulvaney told Fox News.
As one might expect, top Democrats have been vocal in their opposition to the tax proposal. It’s time to have a tax code for the 21st century.