House Republicans huddle on 'tax cuts 2.0'

House Republicans huddle on 'tax cuts 2.0'
© Greg Nash

House Republicans on Thursday met to discuss a second package of tax cuts, ahead of the rollout of legislation next week.

The meeting came as some lawmakers from high-tax states have voiced concerns about the package, which is expected to cement the 2017 tax law's $10,000 cap on the state and local tax (SALT) deduction.


The centerpiece of the package, known as "tax cuts 2.0," is to make the 2017 tax law's changes for individuals permanent. Those tax changes — which include tax rate cuts and an increase in the standard deduction in addition to the SALT deduction cap — are currently slated to expire after 2025 because lawmakers wanted to pass last year's tax overhaul using special budget rules that allowed the Senate to clear the measure without any Democratic votes.

The vast majority of House Republicans who voted against the 2017 law were GOP lawmakers in New York, New Jersey and California who were concerned about the SALT deduction cap. And some of them have worries about making the cap permanent.

House GOP leaders plan to hold a floor vote on the legislation later this month, less than two months before the midterm elections. Many of the blue-state Republicans face competitive reelection races.

House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyRepublicans focus tax hike opposition on capital gains change GOP, business groups snipe at Biden restaurant remarks Top Democrat offers bill to overhaul tax break for business owners MORE (R-Texas) said after Thursday's meeting that he still plans for tax cuts 2.0 to cement the SALT deduction cap. He told reporters that the limit on the deduction raises revenue to help pay for "middle-class tax cuts across the country, including the high-tax states."

But Brady said he's "continuing to listen" to the lawmakers in the high-tax states.

"Those members are important to us," he said.

New York Republican Rep. Tom ReedTom ReedThe Hill's Morning Report - Presented by Facebook - Senate path uncertain after House approves Jan. 6 panel Lawmakers brace for battles with colleagues as redistricting kicks off Hundreds of businesses sign on to support LGBTQ rights legislation MORE, who voted for the 2017 tax bill and is on the Ways and Means Committee, said Brady is "making a direct line of communication open to the SALT state members."

"Obviously [there are] a lot of political concerns, a lot of substantive concerns, and it was good dialogue," Reed said.

When asked if lawmakers were looking at temporarily extending the SALT deduction cap instead of making it permanent, Reed said "that's still a work in progress."

Brady, however, said he expects a permanent cap to be in the legislation.

In addition to legislation making the 2017 individual tax cuts permanent, the package is expected to include components aimed at incentivizing taxpayers to save money and helping start-ups grow.

Brady gave lawmakers fact sheets that laid out some new details on the savings and innovation components. The savings portion will include changes to facilitate businesses offering retirement plans to their employees, which is in line with an executive order President TrumpDonald TrumpCuban embassy in Paris attacked by gasoline bombs Trump Jr. inches past DeSantis as most popular GOP figure in new poll: Axios Trump endorses Ken Paxton over George P. Bush in Texas attorney general race MORE signed last week.

The innovation portion will allow start-ups to add new investors without triggering limits on benefits like the research and development tax credit.