The House passed its tax reform plan by slim margins on Thursday, leaving behind some Republican lawmakers refusing to vote to eliminate state and local tax deductions.
Continue Reading Below
Eliminating the SALT deductions forced 13 Republicans to vote against the measure, mostly from the high-tax states of New York, New Jersey and California.
“This federal government with this tax bill is reversing 104 years of policy, which says that we are not going to double tax the taxes that are paid by citizens to their state government or their local government,” House Budget Committee member Rep. John Faso (R-N.Y.) said during an interview with FBN’s Charles Payne. “And now as of Jan. 1, 2018...we’re going to change that precipitously. That’s really the concern.”
The elimination of SALT and the reduction of the corporate tax rate has caused GOP infighting in both chambers of Congress, though both the House and Senate tax plans call to eliminate the deductions.
Faso claims that the elimination of the deductions will “blow a hole financially” in New York and cause people to leave the state because of its high-tax status.
“I believe that the federal government shouldn’t tax the money that the people pay to their state and local governments. We are subjecting that to double taxation,” Faso said.
Faso says that if the final approved bill does eliminate the state and local tax deductions, then it should be phased in over a number of years. He says that tax reform is being done right now at the expense of a small handful of state and local taxpayers, who are paying the bulk of those taxes in a couple of states.