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Tax bills remain at odds

Tax bills remain at odds
California - Chuck Schumer - CNN - Donald Trump - Flash Point - Gross Domestic Product - New Jersey - New York - Republican Party - United States Senate
November 13
08:362017

WASHINGTON -- The chairman of the House's tax-writing committee said Sunday that he's confident that chamber won't go along with the Senate's proposal to eliminate the deduction for property taxes, setting up a major flash point as Republicans aim to put a tax cut bill on President Donald Trump's desk before Christmas.

GOP lawmakers are moving urgently to push forward on the first rewrite of the U.S. tax code in three decades, but key differences promise to complicate the effort.

Among the biggest differences in the two bills that have emerged: The House bill allows homeowners to deduct up to $10,000 in property taxes while the Senate proposal unveiled by GOP leaders last week eliminates the entire deduction.

The deduction is particularly important to residents in states with high property values or tax rates, such as New Jersey, Illinois, California and New York. Rep. Kevin Brady, chairman of the House Ways and Means Committee, said he worked with lawmakers in those states to ensure the House bill provides relief and that he was committed to ensuring it stays in the final package.

"It's important to make sure that people keep more of what they earn, even in these high-tax states," Brady, R-Texas, said during an appearance on Fox News Sunday.

"What we've worked so carefully with our lawmakers from New York and California and New Jersey is to make sure we deliver this relief," Brady said.

Combined with a new family tax credit and a deduction for mortgage interest for new purchases that would be capped at $500,000 of debt, the House bill "gets the job done," Brady said.

Both the House and Senate bill would eliminate deductions for state and local income taxes and sales taxes paid. Sen. Charles Schumer, D-N.Y., said in response to Brady's pledge that Republicans should fully restore what is referred to as the SALT deduction, or millions of middle-class families would end up paying higher federal income taxes, not less.

"The House's so-called compromise would be saying to the middle class we'll only chop off four of your fingers instead of all five," Schumer said in a statement.

Rep. Peter King, a Long Island Republican who has been among the most vocal opponents of the planned repeal of state and local tax breaks, said he remains committed to trying to preserve them.

King said he can't vote for the bill right now and bemoaned the justification of taking deductions away from "high-tax" states such as New York. He said his state sends more tax money to the federal government than it gets back, and that the House bill would have a "devastating" impact on taxpayers in areas such as Long Island.

"Since when did the Republicans become the party of class warfare?" King said on Fox's Sunday Morning Futures. "These are hard-working people, and they're going to get screwed by this bill."

King said if his is the final vote needed to pass the bill, "then they better restore the state and local tax deduction. Otherwise, they're not getting my vote."

On Sunday, Brady rejected the idea that some middle-class families would be "losers" under the House plan because of provisions that include ending deductions for student loans and for medical expenses that exceed certain individual thresholds.

"I believe there's tax relief all up and down the income level for families," he said. "Every income bracket sees a tax relief."

The Senate Finance Committee is scheduled to begin considering its version of the bill today. Senate Republican leaders have said they want to hold a full Senate vote before Thanksgiving, which falls on Nov. 23.

President Donald Trump's top economic adviser, Gary Cohn, said on Sunday Morning Futures that he expects the legislation to go to a conference committee that reconciles differences between the House and Senate versions before returning a report to both chambers for final passage.

The conferees "will decide what stays and what goes, and they'll pick and choose the different parts that they think are important and they'll pick the pay-fors," said the director of the White House's National Economic Council.

A key feature of both bills is a reduction in the corporate tax rate from 35 percent to 20 percent.

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