NY, NJ Republicans show early opposition to tax bill

NY, NJ Republicans show early opposition to tax bill
© Greg Nash

House Republicans from New York and New Jersey came out in opposition to the GOP’s long-awaited tax-reform bill on Thursday, citing the proposed elimination of the popular state and local tax deduction.

Most GOP members of the New York and New Jersey delegations voted against the budget blueprint this month to underscore to GOP leaders that they will hold firm on preserving the state and local tax deduction (SALT) used by their constituents.

New York, New Jersey, Illinois and California are among the highest-taxed states in the nation. Many individuals in those states take advantage of the state and local tax deductions to avoid double taxation on their income.

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Under the legislation unveiled on Thursday, people could still deduct up to $10,000 on their local property taxes, but not other taxes paid to state or local governments.

GOP leaders hope to move the bill through the House Ways and Means Committee next week and onto the floor the following week.

The opposition from lawmakers in the populous, high-tax states will be one of the biggest obstacles for GOP leaders in corralling enough votes to pass the tax bill.

Many of the Republicans in the affected states — which are mostly Democratic-leaning — are also among the biggest Democratic targets heading into the 2018 midterm elections.

Rep. Lee Zeldin (R-N.Y.) said that allowing the property tax deduction up to $10,000 demonstrated “progress, but not enough progress.”

“Eliminating the SALT deduction would be a geographic redistribution of wealth, picking winners and losers. New York is a net contributor to the federal coffers with regards to both tax policy and spending policy and that is even with the SALT deduction,” Zeldin said in a statement.

Other New York Republicans also indicated they won’t support the legislation in its current form.

“I’m still analyzing it, but right now, I’m strongly leaning no,” Rep. Pete KingPeter (Pete) Thomas KingWashington big names celebrate launch of Hill.TV The Hill's Morning Report — Trump denigrates NATO allies, floats 4 percent solution ‘Unmasking Antifa Act' includes 15-year prison term proposal MORE (R-N.Y.) said.

"We're still in the process of fighting for it," Rep. Dan Donovan (R-N.Y.) told reporters when asked about the SALT deduction.

Republicans in New Jersey face a similar problem. Rep. Frank LoBiondo (R-N.J.) also said he could not currently support the bill.

“I am working with my fellow New Jersey and New York colleagues on a counterproposal to preserve these deductions and truly make this reform a net positive for the residents of South Jersey,” LoBiondo said in a statement.

Another New Jersey Republican, Rep. Leonard Lance, said he is “going to continue to negotiate” on the SALT issue.

“There is much to like in the legislation but the proposed cap on deductibility of state and local taxes makes the bill unacceptable at this time,” Lance said. 

But not all GOP lawmakers from the affected states are expressing opposition.

Rep. Tom Reed (R-N.Y.), who was among the only two Republicans from the New York delegation to support the budget last week, expressed support for the tax legislation.

“I have heard the voices of American workers and the message is clear: people deserve a tax cut, and this legislation will deliver just that,” Reed said in a statement. 

Due to two current vacancies, GOP leaders can only afford up to 22 defections and still pass a tax bill on their own.

This story was updated at 3:03 p.m.