State, local tax deductions ‘probably’ have to stay to pass reform: Varney
You could see it coming....a revolt. Politicians, both Democrats and Republicans are up-in-arms about deducting state and local taxes. There is a proposal to end that deduction. That is a very big deal, especially in states where local taxes are high and the deduction is very important -- New York and California in particular. Cut that deduction, and high income people might end up paying more.
That is a problem for 33 house Republicans who represent districts in high tax states. They want to support the president's plan, but if that deduction goes, their own voters take a hit, and so will they in next year's elections.
Serious implications here-- do the math. In the house, the tax plan can only afford to lose 22 votes. So if those 33 Republicans band together, they could kill the whole tax deal.
It’s fascinating, especially the reaction of the 18 Senators from the nine highest tax states: they are all Democrats.... What will they do? Don’t they want to tax the rich? Yes.... But not if it costs them their Senate seats.....
Bottom line...to get the tax plan done, the deduction for state and local taxes probably has to stay.