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Democratic attempt to restore state/local tax deduction fails

Rep. Peter Roskam, R-Ill., chairman of the House

Rep. Peter Roskam, R-Ill., chairman of the House Ways and Means Subcommittee on Tax Policy, joined at left by Ways and Means Chairman Kevin Brady, R-Texas, describes the GOP's far-reaching tax overhaul, the first major revamp of the tax system in three decades, on Capitol Hill in Washington, Thursday, Nov. 2, 2017. Credit: EPA-EFE/REX/Shutterstock / JIM LO SCALZO

WASHINGTON — A Democratic bid to restore the individual deduction for state and local taxes in the Republican tax overhaul bill failed on Tuesday in a party-line vote in the Republican-controlled tax-writing committee working on the legislation.

The amendment, proposed by Rep. Bill Pascrell (D-N.J.), lost in a 23 to 16 vote. The amendment would have restored the full state and local tax deduction that the tax bill scraps and lifted the tax bill’s $10,000 cap on property tax deductions.

The rejection of the provision, which was expected, narrows the options that lawmakers from high-tax states have to influence the final bill, but does not close the door, according to Long Island Reps. Lee Zeldin (R-Shirley) and Peter King (R-Seaford).

“I’m continuing to work with colleagues in Congress to advocate for that change [to restore the SALT deduction] to the current draft,” Zeldin said in a phone interview.

The most effective leverage for proponents of restoring what’s known as the SALT deduction in the bill remains having enough Republican no votes to threaten the tax bill’s passage, forcing House Republican leaders to negotiate to form a majority.

King also sees an opportunity to bring up the issue again in the House Rules Committee, which sets the terms and conditions of floor debate and amendments on each bill, according to his chief of staff. King also is talking with other members of the House.

The vote came on the second day of the House Ways and Means Committee’s work on the tax legislation introduced by House Republicans last Thursday, with a plan to pass it next week. The Senate plans to introduce its version of the tax bill on Thursday.

Senate tax writers are considering significant changes to the bill. Senate Republicans would eliminate the deduction for state and local income, sales and property taxes, according to Republicans speaking on condition of anonymity to discuss internal deliberations.

The Senate measure would retain the medical expense deduction, which the House plan eliminates. And the Senate would retain today’s seven personal income tax brackets, not collapse them into four like the House bill. The Republicans said the provisions might change before the bill is released.

The nonpartisan Joint Committee on Taxation said Tuesday that 61 percent of taxpayers, including many from the middle class, would get a tax cut in 2019 and about 8 percent would pay more. But the analysis found that by 2027 only about 46 percent would pay less than if Congress did nothing and nearly 20 percent would be paying $100 or more in additional taxes.

Lawmakers said they face intense pressure from taxpayers, lobbyists and political donors. Rep. Chris Collins (R-Clarence), who backs the tax bill, told reporters Tuesday, “My donors are basically saying get it done or don’t ever call me again.”

With AP

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