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House GOP passes $1.5T tax cut overhaul that limits deductions

Rep. Kevin Brady (R-Texas), head of the committee

Rep. Kevin Brady (R-Texas), head of the committee that crafted the House-passed GOP tax bill, is congratulated Thursday, Nov. 16, 2017, by Majority Leader Kevin McCarthy, center, Speaker Paul Ryan and other House Republicans. Credit: Getty Images / Alex Wong

WASHINGTON - WASHINGTON — House Republicans on Thursday easily passed their version of a sweeping $1.5 trillion tax overhaul that sharply cuts taxes for corporations and small businesses and lowers many individual rates in a bid to spur economic growth and boost paychecks.

In a 227-205 vote, the Republican majority approved the tax legislation despite opposition by 13 of its members, including both Long Island GOP congressmen, over the removal of significant state and local tax deductions. All Democrats voted against the bill.

With that vote, President Donald Trump’s top priority passed its first major test of the legislative process, as Republican leaders in the House and Senate rush the complex tax legislation in a bid to put it on the president’s desk before Christmas.

“This is nothing short of extraordinary . . . getting 227 members to agree on something as complicated” as federal tax legislation, said House Speaker Paul Ryan (R-Wis.) in a celebratory news conference afterward, praising the bill’s tax cuts for business and the middle class.

“We’ve got a long road ahead of us,” Ryan said. “And this is a very, very big milestone in that long road.”

House Minority Leader Nancy Pelosi (D-Calif.) said before the vote that the Republican bill “is pillaging the middle class to pad the pockets of the wealthiest and hand tax breaks to corporations shipping jobs out of America and drastically increasing the national debt.”

The action now shifts to the Senate, where Republicans have fashioned a version that differs significantly from the House bill — notably adding the elimination of the individual mandate for health insurance. The Senate bill faces cloudier prospects with a narrower path to passage.

The Senate bill, if passed, would go to a committee of House and Senate members to hammer out the difference between the two versions for the final legislation that both chambers then must once again approve.

Already, though, the Senate bill is facing difficulties. One senator said Wednesday that he would vote no on the legislation, and at least three or four others have not said they are ready to vote for it. The Senate bill was approved late Thursday by the Finance Committee and sent to the full Senate on a party-line 14-12 vote.

Trump gave House Republicans a pep talk on Capitol Hill Thursday morning.

After the House passed the bill, Trump tweeted: “Congratulations to the House of Representatives for passing the #TaxCutsandJobsAct — a big step toward fulfilling our promise to deliver historic TAX CUTS for the American people by the end of the year!”

The House bill’s elimination of the deduction for state and local taxes, except for property taxes up to $10,000, prompted 13 Republicans to vote no, including five from New York, four from New Jersey, three from California and one from North Carolina.

Reps. Peter King (R-Seaford) and Lee Zeldin (R-Shirley) vowed to keep fighting to restore that deduction. “This is a process that is not done today,” said Zeldin ahead of the vote. King added, “We have a long way to go.”

Asked about Trump’s view on the state and local tax deduction issue, his press secretary Sarah Huckabee Sanders brushed it off, saying most taxpayers don’t itemize.

IRS records show that nearly half of Long Island filers itemized their deductions in 2015. The state and local tax deduction was taken by 43 percent of Nassau County filers and 39 percent of Suffolk County filers — and 63 percent of filers in both counties with income between $75,000 and $100,000.

New York Republicans voting against the bill were King, Zeldin and Reps. Dan Donovan of Staten Island, John Faso of Kinderhook and Elise Stefanik of Willsboro.

Voting in favor of the bill were GOP Reps. Tom Reed of Corning, Chris Collins of Clarence, John Katko of Camillus and Claudia Tenney of New Hartford.

Both Long Island Democrats, Reps. Kathleen Rice of Garden City and Thomas Suozzi of Glen Cove, voted no.

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