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House Republicans raise red flags over Senate tax bill

Lindsey McPherson, CQ-Roll Call on

Published in News & Features

The Senate's decision to fully repeal the deduction for state and local tax, or SALT, is another potential showstopper for House Republicans, who struggled for weeks to find a compromise that would placate members from high-tax states like New York and New Jersey.

House GOP leaders and tax writers agreed to keep the property tax deduction with a $10,000 cap, which won over some wavering Republicans.

But there are still at least nine Republicans who are opposed to the House tax bill because of its treatment of SALT: New Jersey Reps. Leonard Lance, Frank A. LoBiondo and Christopher H. Smith; New York Reps. Peter T. King, Lee Zeldin, Elise Stefanik and Dan Donovan; and California Reps. Darrell Issa and Tom McClintock.

A full repeal of SALT, as the Senate is proposing, would likely lose more than 22 Republicans -- the maximum number that could vote "no" and the bill still pass without any Democratic support.

"I think there's broad recognition that you cannot repeal state and local taxes in its entirety and expect tax reform to get to the president's desk," Ways and Means Committee member Tom Reed, who is supporting the House bill, said. "I will tell you I can't support that."

The New York Republican said there are 73 House GOP members from high-tax states and it is "pure math" that full repeal of SALT would cause the bill to fail.

 

Ways and Means Chairman Kevin Brady had said two weeks ago as he was negotiating with House members on the SALT provision that he expected Senate Finance Chairman Orrin G. Hatch to take whatever compromise the House reached on the issue.

"He's fully aware that this is an important issue for House members in that we are taking a lead to find a solution," the Texas Republican said at the time. "I'm confident that that will be honored."

On Wednesday when asked about the emerging Senate plan, Brady was not critical of Hatch's apparent reversal.

"Well, they are writing to the framework in that sense, as we agreed with the president and the House and Senate that those deductions would be limited or eliminated in the final bill," he said, referring to the tax principles released in September by congressional Republicans and the White House.

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