- REUTERS/Joshua Roberts
WASHINGTON – One of the key elements of the newly unveiled Republican tax reform framework is the proposed elimination of the state and local tax deduction, which could hurt Americans living in states with high tax rates like California, New York, and New Jersey.
But Republican Rep. Chris Collins of New York is not sweating the plan to scrap the state and local tax deduction in his state. Collins told reporters Wednesday he thinks the majority of taxpayers in his district would opt for the standard deduction, which would double under the new framework.
“I bet you 98% of the people in my district are gonna take the standard deduction,” Collins said. “So they’re not gonna lose anything.”
Collins added that the tax plan, which Trump touted on the road at a rally in Indiana Wednesday afternoon, is “so good on every front” that the state and local tax deductions was a concession he is willing to make.
“So I like what I see,” Collins said. “I would, like everyone else, I’d rather see the state income tax and property tax staying in, but if 97 or 98 percent of New Yorkers are gonna take the standard deduction, it does not become a big deal.”
However, fellow New York Rep. Kathleen Rice, a Democrat, called the removal of state and local deductions “a nonstarter for anyone.”
“I think this is an opening salvo,” Rice told Business Insider of the framework. “It was pretty vague in terms of what tax bracket people were gonna even fall into with going from seven to three.”
And some of Collins’ Republican colleagues have been on the offensive about keeping the deductions that many of their constituents use.
New Jersey Republican Reps. Tom MacArthur and Rodney Frelinghuysen, along with a handful of other lawmakers, said earlier this month in a letter to Treasury Secretary Steven Mnuchin that eliminating SALT “unfairly penalizes residents in high-tax states like New York, California, Illinois, and New Jersey, where middle-class families can least afford another tax increase.”
“Faced with an already high tax burden and high cost of living, our communities cannot afford another increase to their taxes,” the letter added.