GOP tries to mend rift over deduction
Ryan blasts states whose residents rely on state-local break
WASHINGTON — The top House Republican on Thursday blasted high-tax states, even though their taxpayers deliver billions 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 GOP lawmakers from high-tax states met privately with Republican leaders and reached for compromises to break the impasse. The lawmakers 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. The success of the package is a political imperative for Republicans, who have pinned their hopes on a big legislative achievement to help them retain control of Congress in next year’s elections. It’s also President Donald Trump’s highest legislative priority to fulfill his promise of boosting economic growth.
Ryan went on the offensive against high-tax states including California, New York and New Jersey even though the GOP lawmakers from those states need to be brought on board to support the tax overhaul plan.
Ryan contended that 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 in 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 shows. New York gets back 81 cents for every $1 its residents pay 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 44 million Americans and costs the government an estimated $1.3 trillion in lost revenue over 10 years.
House Speaker Paul Ryan, addressing the Heritage Foundation in Washington on Thursday, touted the simplicity of annual tax filing under a tax overhaul proposal that Republicans are struggling to flesh out and unite around.