Trump’s plan to cut state and local tax deductions already threatens to sink the GOP’s tax overhaul – By Kerry Eleveld (dailykos.com)/ Sept 26 2017
Another shocker—one of the provisions in Donald Trump’s opening bid on his yet-to-be-released tax plan could sink it before it even gets off the ground. The sticking point is a state and local tax deduction that amounts to a $1.3 trillion tax break used by voters in dozens of districts represented by Republicans, including in New York and New Jersey. Bloomberg’s Sahil Kapur writes:
[New York Rep. Peter] King, a Republican who represents Long Island, said he’ll oppose any attempt to repeal the state and local tax deduction, calling it “absolutely essential to my district.”
King is one of 52 Republicans — more than enough to scuttle any bill that lacks Democratic support — who hail from districts that use the state tax deduction disproportionately. He thinks enough of those Republican colleagues will band together to keep its repeal out of any comprehensive tax legislation this fall, complicating GOP plans.
“I can’t vote for a bill that would eliminate the state and local tax deduction,” King said in an interview.
Once more, the already problematic decision is the only tax break the White House and Republicans zeroed in on cutting in order to help pay for all the other tax cuts they hope to give to corporations and the rich.
The administration has publicly identified only one major tax break they would eliminate, the deduction for state and local income taxes.
The tax cuts Trump is trying to pay for by eliminating state and local deductions would go toward lowering the tax rates for corporations and wealthy Americans. A new Wall Street Journal poll found a minimal level of support for both cuts—12 percent support for cutting taxes on the wealth and 16 percent support for cutting taxes on corporations.
PB/TK – Everyone wants a tax overhaul, yet no one can agree on how to get there. A tax deduction that doesn’t do much in one area, might be a huge deal to others. But why must it always be total elimination of one and not incremental cuts too many to get the job done
