Republicans embrace tax hike targeting Democratic states

Republicans aren’t usually big on raising taxes, but they’re really eager to eliminate the federal deduction for state and local taxes.

Why? A look at the states that benefit the most from the tax break helps explain it — they are all Democratic strongholds. New York, Connecticut, New Jersey and California top the list of states where taxpayers get the biggest deductions. Not a single Republican-leaning state ranks in the top 10.

“Although Republicans usually recoil at any type of tax increase, cutting this tax break would almost be fun for them,” said Martin Sullivan, chief economist for Tax Analysts. “It provides massively disproportionate deductions to high-tax states controlled by Democrats.”

Proposals by House Republican leaders and President Donald Trump would repeal the tax break as part of their packages to overhaul the American tax code. But they are getting a lot of pushback from Republican lawmakers in Democraticcontrolled states.

The standoff illustrates how hard it is for Congress to eliminate any popular tax break, even one that primarily benefits the ruling party’s political opponents.

Almost 44 million claimed the deduction in 2014, according to IRS statistics. That’s nearly every taxpayer who itemizes deductions, a little less than 30 percent of all taxpayers. Sullivan analyzed which states would be hit hardest by repealing the tax deduction. The Associated Press did a similar analysis and came to the same conclusion.

Nationally, the average deduction is about $11,800, but it is much bigger in many blue states. New York is tops with an average deduction of more than $21,000. Connecticut is next at $18,900, followed by New Jersey at $17,200 and California at $17,100.

These are states with high property values, high costs of living, high incomes and relatively high state and local taxes compared to other states. They are also states President Donald Trump lost in last year’s election. Though the president is from New York, he lost the state to Democrat Hillary Clinton by 22 percentage points.

The highest-ranked state won by Trump is Wisconsin, which came in at No. 13, with an average deduction of $11,300.

At the bottom is Alaska, with an average deduction of $4,800. It is followed by Tennessee and Alabama. Among the bottom 10 states, Nevada and New Mexico are the only ones won by Clinton.

The deduction allows taxpayers to write off real estate taxes, and state and local income taxes. If your state doesn’t have an income tax, you can deduct sales taxes. The deduction is heavily weighted to families with high incomes. Seventy-five percent of the benefits went to families making more than $100,000.