Drudge Retort: The Other Side of the News
Wednesday, October 25, 2017

House Republican leaders are in a mad dash to resolve a dispute between GOP tax writers and Republicans from high-tax states that has the potential to make Thursday's budget vote a real nail-biter.

A handful of New York Republicans, along with a New Jersey lawmaker, are threatening to vote against the budget unless GOP leaders retreat from plans to eliminate a key federal deduction that people can take for the state and local taxes they pay.

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Scrapping the deduction would bring in an estimated $1.3 trillion in new tax revenue over a decade, which could be used to cover some of the cost of other tax breaks Republican leaders are eyeing. But Republicans from high-tax districts in New York, California and New Jersey say millions of their constituents rely on the deduction and would face a tax hike without them.

Some of those lawmakers say they won't commit to backing the budget until they receive assurances from GOP leaders to protect the benefit. The high-stakes vote on Thursday is the final hurdle to unlocking a filibuster-proof tax overhaul this year.

"There would need to be more progress made in figuring out the solution on this issue in order for me to vote for the resolution on Thursday," said Rep. Lee Zeldin, a New York Republican who's close to President Donald Trump. "As of right now, I don't have enough answers to vote ‘yes' on the budget."

Rep. Tom MacArthur (R-N.J.) said that despite a meeting with Vice President Mike Pence at the White House on Tuesday, his concerns were not assuaged and he needs more of a guarantee before supporting the budget.

"Didn't make the progress that I hoped for today, but we have another meeting late tomorrow and we'll see," he said.

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The GOP raising taxes on the middle class to pay for tax cuts for the wealthy?

One supposes that cutting programs for kids and seniors and the poor just couldn't make up the difference.

#1 | Posted by Corky at 2017-10-25 12:53 PM | Reply

This is exactly why bills like this need to go to committee, so that issues like this can be horsetraded.

#2 | Posted by Rightocenter at 2017-10-25 01:47 PM | Reply

I would like to see the home deduction changed. I'd like to see it become a deduction that is allowable before meeting the threshold of the standard deduction but the amount deducted should be capped.

This would allow someone who paid $4000 in interest to deduct it even if they didn't have other deductions that would exceed the standard deduction.

A person who paid %50,000 in deduction my have the amount capped at 30K. I don't know what the cap should be but the CBO could calculate what the cap would need to be to be revenue neutral.

#3 | Posted by jamesgelliott at 2017-10-25 02:28 PM | Reply

This is exactly why bills like this need to go to committee, so that issues like this can be horsetraded.

#2 | Posted by Rightocenter

Wait wait wait. You mean the GOP should actually govern instead of ramming things through with simple majority votes? Get outta here!

#4 | Posted by jpw at 2017-10-25 02:57 PM | Reply | Newsworthy 1

#4

I have been saying that all along, pay attention

#5 | Posted by Rightocenter at 2017-10-25 03:06 PM | Reply

I know. It wasn't a critique, just a rhetorical question.

#6 | Posted by jpw at 2017-10-25 03:09 PM | Reply

"but the amount deducted should be capped."

I see where you're going, but this makes it more expensive for poorer people to own a home in richer areas.

You could means-test income or wealth to set the cap though.

Unless of course you want it to be harder for poorer people to own homes in richer areas, which I'm sure a lot of people in richer neighborhoods do...

#7 | Posted by snoofy at 2017-10-25 03:19 PM | Reply

You could means-test income or wealth to set the cap though.

We have that already.

"Itemized Deductions - The total amount of itemized deductions is reduced by 3% of the amount by which the taxpayer's AGI exceeds the threshold amount, with the reduction not to exceed 80% of the otherwise allowable itemized deductions.

Not all itemized deductions are subject to phase-out. The following deductions are not subject to the phase-out:

o Medical and dental expenses
o Investment interest expenses
o Casualty and theft losses from personal-use property
o Casualty and theft losses from income-producing property
o Gambling losses

Thus, a taxpayer who is subject to the full phase-out still gets to deduct 20% of the deductions subject to the phase-out and 100% of the deductions listed above. "

www.williams-callan.com

Trumps tax plan will most likely scrap that limitation.

#8 | Posted by 726 at 2017-10-26 12:17 PM | Reply

"I see where you're going, but this makes it more expensive for poorer people to own a home in richer areas."

It's going to make home ownership easier for lower income people because they would be able to deduct home interest they otherwise wouldn't

#9 | Posted by jamesgelliott at 2017-10-26 01:17 PM | Reply

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