Kevin Brady continues push for state and local tax elimination; remains open to negotiation

Kevin Brady

House, Ways and Means Committee Chairman Rep. Kevin Brady (R-Texas) reaffirmed his position on eliminating the state and local tax deduction (SALT) on Wednesday after recently meeting with disgruntled congressional lawmakers who are concerned that the final Republican tax reform bill will eradicate the tax break.

In an interview with FOX Business, Brady said he was open to negotiating the future of SALT, but also implied he’s still looking to repeal the deduction as it’s been crafted in the current tax code.

“Bottom line today, this mess of a tax code double taxes most Americans for that deduction. Taxes them once at a local level. Taxes them with a high federal tax rate just so some can write it off. What we have today is in the current code double taxation at its worse,” Brady said.

Brady also gave some insight into how he’s been handling the negotiations with congressmen whose districts would be most impacted if the deduction was eliminated and, within those discussions, he’s made it clear that he believes a better approach is to reform, if not entirely eliminate SALT.

“I always ask each lawmaker why don’t we work on those details, lay out that plan and then go to the calculator, work through these numbers and see that we have a choice,” Brady said.  “We can keep tax rates for families high and keep those deductions. We can do exactly what we do today. Or we can lower the tax rates for everybody and they just pay their own local taxes,” he added.

As FOX Business first reported, Brady met last week with congressmen from New York, New Jersey and California, the three states that have the most to lose from the removal of SALT and all of them raised their concerns with how losing the deduction could impact their districts. The meeting with over two dozen Republican lawmakers also included Reps. Steve Scalise (R-La.) and Kevin McCarthy (R-Calif.).

New York, along with New Jersey and California, are considered high-tax states that give taxpayers a break with the deduction. About one-third of the value of the tax break, which in total is estimated to be $1.3 trillion in savings, is used by filers in these states according to a study by the nonpartisan Center for a Responsible Federal Budget.

Immediately following Brady’s remarks, FOX Business spoke with Rep. Peter King (R-N.Y.), a participant of last week’s meeting, and he made it clear he will not vote for a bill that eliminates the deduction that he says is crucial for middle class families in his district on Long Island.

“First of all the negotiations are ongoing but I can’t vote for any bill that takes away the state and local property tax deduction. It’s going to be devastating to my district. It would be like bringing in the gun control to the most red district,” King said.

Still, King also reiterated to FOX Business that Brady has made it clear that the Republican leader has told him and other lawmakers that eliminating SALT is open for negotiation.

“[Brady] said we are going to be meeting again and we are going to be negotiating. I can speak for myself and other New York lawmakers; this issue is absolutely critical to us. I can’t think of any economic vote or any tax bill that will affect my district more than this,” King said.

The Republican blueprint also calls for the corporate tax rate to be cut from 35% to 20% and bring the pass through business rate down to 25% from the current rate of 39.6%.