GOP considers ending tax breaks
WASHINGTON — Republicans plunged into negotiating the future of popular tax breaks for homeowners and large families Wednesday while moving to shore up party unity around a tax plan that critics fear would raise taxes on some in the middle class and add to the deficit.
Top tax writers are working to persuade rankand-file Republicans to set aside their focus on maintaining tax breaks, such as the ability to deduct state and local taxes, and on dramatically expanding the child-care tax credit so that they can set their sights on the greater goal of passing a package that fulfills the GOP promise of cutting taxes for most people.
“There’s a lot of fear out there about changing the code,” said Rep. Tom Reed, R-N.Y., a member of the Ways and Means Committee. “People are just riskaverse.”
House Ways and Means Chairman Kevin Brady, R-Texas, is leading five policy sessions over two weeks, as part of a broader push by GOP tax writers to win over colleagues whose votes will be critical to passing a tax bill by the end of this year.
Brady also huddled at a downtown steakhouse Monday night with a small group of GOP lawmakers from high-tax states seeking a compromise on the proposed elimination of the deduction for state and local taxes.
Among options under discussion: giving individual taxpayers a choice of deducting mortgage interest or state and local taxes, but not both, or capping the deductibility of property taxes on high-value homes.
Lawmakers have a tricky task ahead to write detailed legislation without alienating members, who will be under intense pressure from constituents and lobbyists to preserve tax breaks.
One message Republicans have been trying to communicate about the web of changes in the tax plan is that people will gain a much larger standard deduction — but that will mean a loss of individual deductions that are an important benefit for a minority of taxpayers.
The debate over the state and local tax deduction has emerged as one of the biggest fights ahead. The deduction, taken by most voters who itemize their taxes, is particularly valuable in high-tax states, such as New York, New Jersey, California and Connecticut.