Ryan blasts high-tax states fearing end of deduction
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.
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.