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House narrowly OKs budget resolution that would cut tax deduction

Rep. Kevin Brady, R-Texas, right, listens as President

Rep. Kevin Brady, R-Texas, right, listens as President Donald Trump speaks during a meeting with members of the House Ways and Means committee in the Roosevelt Room of the White House in Washington on Sept. 26, 2017. Credit: AP

WASHINGTON — The U.S. House narrowly approved a budget blueprint that will enable Republicans to enact sweeping tax cuts but also will scrap taxpayer deductions for state and local taxes, which some lawmakers warned will be a blow to high-tax states like New York.

The budget plan passed in a 216 to 212 vote, with 20 Republicans joining Democrats in voting no, including Rep. Peter King (R-Seaford), Rep. Lee Zeldin (R-Shirley) and others from New York and New Jersey where state and local taxes are higher than many other states.

All of the House members representing Long Island and New York state voted no except two upstate Republicans.

The close final tally suggests that Republicans still face struggles within their own party over key elements of the 10-year, $1.5 trillion tax cut — the top priority of leadership that is set on passing it this year as President Donald Trump’s first major legislative accomplishment.

Trump celebrated the House vote in a tweet: “Big news – Budget just passed!”

House Speaker Paul Ryan (R-Wis.) said, “This budget that we just passed in the House today brings us one step closer to historic tax reform. That means more jobs, fairer taxes, bigger paychecks for Americans.”

Rep. Joe Crowley (D-Queens), chairman of the House Democratic Caucus, called the approval of the budget plan “a precursor to a massive tax giveaway to the wealthy.”

The budget resolution, now approved by both chambers, will be the framework for negotiation on the final tax legislation and allow the 52 Senate Republicans to approve that bill with a simple majority vote instead of 60 votes to break a filibuster by Democrats.

The outline of the tax plan said it would cut the corporate income tax rate from 35 percent to 20 percent, eliminate the estate tax, set a 25 percent tax on so-called pass through entities, and lower taxes for corporations’ overseas profits.

Ryan said Rep. Kevin Brady (R-Texas) and the House Ways and Means Committee that he chairs will reveal the details of the tax plan next week.

The tax plan now eliminates the long-standing deductibility of state and local taxes, which Rep. Tom Suozzi (D-Glen Cove) said would be devastating to New York homeowners, who would pay $5,400 more per filer on average and whose home values could drop 10 percent.

Brady and other GOP leaders met with King and other Northeast Republicans and promised to offer a compromise on the SALT deduction before unveiling the tax plan, King said. King said so far they have offered no details.

King conceded it might be hard to block the removal of the SALT deduction that New York Republicans and Democrats said is crucial to their home-owning constituents. “We can stop it if they believe they won’t get the 218 votes, that they won’t get a majority,” King said.

Suozzi called that shift “patently unfair” because it represented “double hit” of taxation on personal incomes.

To Republican arguments that states with lower state and taxes are subsidizing higher-taxing states, Suozzi said, “New York state taxpayers are huge net donors to the federal government. We give a lot more money to the federal government than we get back.”

All New York representatives of both parties except two upstate Republicans voted against the budget resolution.

Voting for it were Rep. Chris Collins (R-Clarence), an early and staunch Trump supporter, and Rep. Tom Reed (R-Corning), a member of the Ways and Means Committee who has proposed replacing SALT tax deductions with SALT tax credits.

Four upstate New York Republicans — John Faso of Kinderhook, John Katko of Camillus, Elise Stefanik of Willsboro and Claudia Tenney of New Hartford — waited until the resolution had the necessary votes to pass before casting their own no votes.

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