- The Washington Times - Wednesday, October 25, 2017

House Ways and Means Committee Chairman Kevin Brady said Wednesday he expects a resolution on how Republicans plan to handle the deduction for state and local taxes paid before a planned rollout of actual tax legislation next week.

“I think it’s vitally important that we help Americans keep more of what they earn regardless of where they live, especially in states that have burdensome local and state taxes,” Mr. Brady said at a breakfast hosted by the Christian Science Monitor.

“We are working toward a solution,” he said. “I expect before the bill is laid out next week that a solution will be announced.

“It’s a work in progress. I think we’re making good progress,” he said.

A number of blue-state Republicans have said they want to preserve the break, which is on the chopping block under the GOP’s planned tax overhaul, and say getting rid of it will result in tax hikes on their middle- to upper-income constituents.

Opponents of the break, though, say it results in taxpayers across the country effectively subsidizing the comparatively higher state and local taxes in states like New York, California and Illinois.

Some possible compromises that have been floated include an income cap on people who can take advantage of the break, and offering taxpayers a choice between deducting the taxes or taking advantage of a separate popular break for home mortgage interest.

Republican lawmakers in states such as New York and New Jersey are fighting to keep the provision in the current tax code, and some are even threatening to vote against the Senate’s 2018 budget plan later this week if the issue isn’t resolved.

House leaders expect the Senate budget to pass this week. Republicans need a 2018 budget plan to pass in the House and Senate in order to unlock a fast-track tool that will allow them to pass a tax package with a simple majority and bypass a potential Democratic filibuster.

But if enough Republicans band together over the issue, it could narrow leaders’ margin for error, with Democrats likely to be united in opposition. The House passed its own 2018 budget plan on a 219-206 vote earlier this month, with 18 Republicans joining 188 Democrats to vote no.

Mr. Brady said the plan is to release tax legislation next week if the House approves the budget this week.

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