House will keep property tax deduction
Change is latest concession to large states’ lawmakers
WASHINGTON — House Republicans from hightax states who threatened to sink President Donald Trump and the Republicans’ tax plan have wrung a key concession from GOP tax-writers, days ahead of the rapidly shape-shifting plan getting a public rollout.
The breakaway lawmakers, from states such as New York and New Jersey, had threatened to sink the sweeping tax-cutting plan that is a pressing legislative imperative for Trump and the Republicans. The GOP House members have opposed the plan’s proposed elimination of the federal deduction for state and local taxes, insisting it would hurt their constituents and subject them to being taxed twice.
Trump administration officials had contended the deduction forces the rest of the country to subsidize homeowners in high-tax, big-spending states.
The head of the House tax-writing committee, Rep. Kevin Brady, said Monday taxpayers will be able to continue to deduct local property taxes on their federal income-tax returns.
Brady, who heads the House Ways and Means Committee, said in a statement, “At the urging of lawmakers, we are restoring an itemized property-tax deduction to help taxpayers with local tax burdens.”
The deduction for state income taxes, however, would be ended. The change means there would be three itemized deductions retained: for home mortgage interest, charitable donations and local property taxes.
But as one rebellion appeared quelled, another crack opened in the support for the nearly $6 trillion plan, as a powerful lobbying group in the housing industry withdrew its blessing for the GOP’s top economic priority.
The move by the National Association of Home Builders added to threats against the legislation from Republicans with strong conservative views and defenders of 401(k) retirement savings plans.
The mounting opposition to the plan comes as House Republicans work behind closed doors on proposed legislation for the plan that they will unveil Wednesday.
House Speaker Paul Ryan said he’s been warning Republican lawmakers that opposition will only intensify as details are released. Speaking to local business leaders in Wisconsin after the homebuilders’ action, Ryan accused special interests in Washington of trying to derail the tax plan by sowing “confusion and chaos.”
And amid speculation over further changes to the plan, the White House rebuffed suggestions that House GOP tax-writers are considering phasing in the planned cut in the corporate tax rate, from 35 percent currently to 20 percent by 2022.