But the elimination of state and local tax deductions must pass the House first.
Eyes are on tax reform this week as the GOP controlled House plans to release its tax reform bill on November 1, which may include elimination of state and local tax (SALT) deductions along with changes to 401(k) retirement plans.
Both have received proper outrage, especially from representatives in high-taxed states. But if the elimination of state and local taxes pass the House, the Senate GOP said they have a unified front on that issue.
The Hill reported:
Senate Majority Leader Mitch McConnell (R-Ky.) is helped by the fact that there isn’t one Senate Republican who represents the nation’s largest high-tax states — California, New York, New Jersey and Illinois.
“I don’t think it’s going to be a problem,” said Senate Finance Committee Chairman Orrin Hatch (R-Utah), when asked Monday if any of his Senate colleagues are demanding that the deduction for state and local taxes remain in the law. “I don’t know anybody who’s advocating strongly for that.”
“Not on this side,” Senate Republican Whip John Cornyn (Texas) said Monday when pressed if anyone in his conference is opposed to eliminating the deductions.
This is a big deal because the GOP only holds the Senate by two seats, which means they can only afford two defections so Vice President Mike Pence can come in and cast a tie-breaking vote
The House has 35 Republican representatives from those four states. It’s expected that the Democrats will vote against the package and the 35 representatives are more than enough to kill the bill if they join the Democrats.
The House passed it’s budget last week by a slim margin of 216-212. the majority of Republicans that voted no came from those high-taxed states
The GOP leaders claim that the SALT elimination will generate $1.3 trillion in “revenue” lost due to proposed tax cuts.
(Or they can keep the SALT deductions and slash the budget. But that makes too much sense, right?)
Rep. Kevin Brady (R-TX), the chairman of the House Ways and means Committee, has tried to keep the language in the bill, which he has kept under wraps, to drive down the opposition in the House. To make up for the SALT elimination, Brady “pledged in a statement over the weekend to include language in the tax package that would allow people to take deductions for property taxes.”
The Senate GOP is also waiting for Brady to unveil his plan, but they have their own ideas on a tax bill:
Senate Republicans are waiting for the House Ways and Means Committee to unveil its package later this week, but they are coalescing around a plan that would only keep intact deductions for charitable contributions, home mortgage interest payments and complex medical expenses.
“The proposal on the Senate side is going to be to double the standard deduction, keep the mortgage interest deduction, the charitable deduction and for some complex medical issues,” Cornyn said Monday. “That’s sort of the current discussion.”
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