- Republicans are unveiling their tax plan Thursday. New York and New Jersey Republicans are hesitant to support it without certain provisions. The elimination of the state and local tax deductions has left a handful of members on the fence about the bill.
WASHINGTON – Several House Republicans from New York and New Jersey could potentially derail the major tax reform effort being rolled out on Thursday, citing the need for certain protections in their highly taxed districts.
The tax reform bill, which is slated to be released Thursday after a last-minute delay by the Ways and Means Committee, will eliminate the state and local tax (SALT) deductions. Such a move would hit middle-class earners in states with high tax rates like New York, New Jersey, and California. In an effort to compromise, the plan will include keeping deductions for local property taxes.
But a trove of the East Coast Republicans who voted against the budget plan last week are already signaling a similar response to the forthcoming tax bill.
New York Rep. Lee Zeldin told reporters on Wednesday that he is not satisfied with the plan in its current form.
"It's a geographical redistribution of wealth," Zeldin said, arguing that eliminating the SALT deductions "picks winners and losers.
"I'm elected to represent my home district and my home state and I am here to fight for a tax cut for middle-income and low-income constituents back home as well as many other great goals for members from all across the country," Zeldin said. "But I'm not going to lose sight of that important need to fight for my home district and my home state."
The Republican is in the congressional delegation from New York, which held a conference call with Treasury Secretary Steven Mnuchin and White House economic advisor Gary Cohn on Monday. Zeldin also had a private meeting with Vice President Mike Pence on Tuesday, where the two discussed ways to reach a middle ground on the state and local tax deductions.
Less frustrated with the bill but still concerned about the final product was New Jersey Rep. Tom MacArthur, who said the cap on property tax deductibility needs to be much higher than what Republicans are proposing. MacArthur would not reveal what the cap was at because lawmakers are still negotiating.
"A lot of things I like in the bill," MacArthur said. "So if we can get the right number for property tax deductibility then I think we have something."
However, MacArthur stressed that getting the majority of New York and New Jersey Republicans to support the plan is the only way it can pass.
"I think unless most of New York and New Jersey's on board, the bill has a problem," he said. "Because there's outliers on a whole bunch of other issues where they'll lose some votes - a vote here, two votes there - you can't afford to lose the bulk of New York and New Jersey and have a bill go forward."
But any changes to appease the dissatisfied blue state Republicans will have to come after the rollout on Thursday, as Rep. Patrick McHenry, the chief deputy whip in the House, told reporters on Wednesday that the coming draft of the bill has already been decided in regard to the state and local deductions.