Ryan blasts high-tax states fear­ing end of de­duc­tion

The Columbus Dispatch - - Nation&world - By Marcy Gor­don and Ken Thomas

WASH­ING­TON — The top House Re­pub­li­can on Thurs­day blasted high-tax states that de­liver bil­lions of dol­lars to the fed­eral govern­ment as he faced a back­lash from rank-and-file GOP law­mak­ers over a sweep­ing tax-cut pro­posal.

But beyond the tough rhetoric from Speaker Paul Ryan, dis­grun­tled law­mak­ers met pri­vately with Re­pub­li­can lead­ers and reached for pos­si­ble com­pro­mises to break the im­passe. The GOP law­mak­ers from high-tax states op­pose the plan’s pro­posal to re­peal the pop­u­lar fed­eral de­duc­tion for state and lo­cal taxes. It’s used in large num­bers by res­i­dents of their states.

With Repub­li­cans splin­tered, the fu­ture of the $6 tril­lion tax-over­haul plan is threat­ened by the GOP de­fec­tions.

Ryan went on the of­fen­sive against high-tax states such as Cal­i­for­nia, New York and New Jer­sey even though the GOP law­mak­ers from those states need to be brought on board to sup­port the tax­over­haul plan.

But Ryan con­tended the rest of the coun­try is “prop­ping up prof­li­gate, big-govern­ment states” that levy high taxes on their res­i­dents and spend reck­lessly.

“States that got their act to­gether are pay­ing for states that didn’t,” the Wis­con­sin law­maker said at an ap­pear­ance at the con­ser­va­tive Her­itage Foun­da­tion.

In fact, Cal­i­for­nia, New York and New Jer­sey send many bil­lions more in taxes to Wash­ing­ton than they get back in fed­eral spend­ing, new data show. Di­vided by to­tal state res­i­dents, New York gets back 81 cents for ev­ery $ 1 it pays in, New Jer­sey re­ceives 74 cents, and Cal­i­for­nia 96 cents, ac­cord­ing to an anal­y­sis re­leased last month by the Rock­e­feller In­sti­tute of Govern­ment.

The state-lo­cal de­duc­tion is claimed by about 44 mil­lion peo­ple and costs the govern­ment an es­ti­mated $1.3 tril­lion in lost rev­enue over 10 years.

At the White House, Trump’s po­si­tion on end­ing the de­duc­tion ap­peared hard­ened. His chief eco­nomic ad­viser, Gary Cohn, dis­counted a news re­port Thurs­day that the pres­i­dent had ex­pressed con­cerns over the pro­posed re­peal. Asked whether Trump was re­think­ing the move, Cohn said no.

[SU­SAN WALSH/THE AS­SO­CI­ATED PRESS]

House Speaker Paul Ryan shows a copy of a pro­posed “sim­ple tax” post­card while speak­ing about Repub­li­cans’ tax-over­haul ef­forts at the Her­itage Foun­da­tion in Wash­ing­ton on Thurs­day.

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