A small group of Republicans is threatening to torpedo President Trump’s agenda over the state and local tax deduction, long a headache for both parties.The New York Times reports that a small group of Republicans is threatening to derail President Trump’s agenda over the state and local tax deduction, a long-standing issue for both parties. It was only a matter of time before the Republican push for a major fiscal package this year would become entangled in the complexities of the state and local tax deduction, also known as SALT. This deduction has the potential to create a political standoff, as many GOP lawmakers have opposed it and imposed a $10,000 limit on the amount of state and local taxes that can be deducted on federal returns in 2017. However, in order to pass a tax bill this year, the party will need the support of a group of Republicans who have made lifting the SALT cap their top priority. These lawmakers, who represent high-tax states like New York and New Jersey where the deduction is highly valued, have stated that they are willing to vote against the package if the issue is not addressed. Representative Nick LaLota, a Republican from New York, has already made it clear that he will vote against the bill if it does not include changes to the SALT deduction. He stated, “There’s a green ‘yes’ button and there’s a red ‘no’ button to press. Come time, if there’s not enough SALT in this bill, I’m pressing the red ‘no’ button. It is a hill I am willing to stake my entire congressional career on.” Despite attempts by House Republican leaders to reach a compromise with members like Mr. LaLota, little progress has been made this week, leaving the issue unresolved as GOP lawmakers prepare to release the first draft of their tax bill next week. Along with Medicaid, the health care program for the poor that Republicans have targeted for cuts, the state and local tax deduction could ultimately determine the fate of the entire GOP legislative agenda. This is because any changes to the current $10,000 limit would be extremely costly and could potentially exceed the overall Republican budget for tax cuts. Even a modest change, such as doubling the cap for married couples, would cost $230 billion over a decade, according to the Committee for a Responsible Federal Budget. More significant changes, similar to what New York Republicans have demanded, could cost over $1 trillion.
Source:Read More