WASHINGTON – California Gov. Jerry Brown on Friday accused congressional Republicans from his home state of acting like “a herd of sheep” by not taking steps toward stopping a repeal of the federal deduction for state and local taxes.
None of California’s 14 Republican House members broke party ranks Thursday to join their GOP colleagues from New York and New Jersey who spearheaded an effort to protect the deduction by withholding votes from the budget resolution that paves the way for tax reform.
“Once they hear the noise from the president and from their leadership, they respond,” Brown told reporters in a conference call with New York Gov. Andrew Cuomo.
Twenty House Republicans failed to stop passage of a 2018 budget resolution that will be used by Republicans as a blueprint for tax reform. They used the vote as a method of protesting the repeal of the federal deduction for state and local taxes (SALT), which is expected in some form in tax reform legislation next week. The bill passed the House with a slim margin, by a vote of 216-212.
Seven of New York’s nine Republican House members voted against the budget resolution.
Cuomo characterized the upstate Republicans who supported it – Reps. Chris Collins and Tom Reed – as the “Benedict Arnolds of today because they voted against the interests of the people in their districts.”
Cuomo said the proposed repeal of the SALT deduction, “is the ultimate redistribution on an unprecedented level because it redistributes income from state to state.”
“New York and California are among the top donor states, which means we send to Washington much more money than we get back,” Cuomo said. “If they want to play fair at all, just send us back the money we sent to them and let’s call it even.”
Governors, mayors and municipal officials from around the nation are opposing the repeal of the SALT deduction, arguing that it would permit double taxation and restrain the ability of state and local governments to raise revenue.
Full repeal of the deduction, however, would provide Republicans about $1.3 trillion in federal revenue over 10 years that they could plow back into tax reform to help finance lower tax rates for corporations and individuals.
The highest ranking California Republican in the House, Majority Leader Kevin McCarthy, talked to his governor about SALT before the vote.
McCarthy "claimed that everything would work out fine or something like that, because of other features in the bill,” Brown said. “But that’s not how our finance department reads it. If they are so confident about it, put it out there for a while. Let us see exactly what they are talking about.”
House Ways and Means Committee Chairman Kevin Brady, R-Texas, said Thursday that he’s still negotiating a deal that would prevent people from any state from paying higher federal taxes.
Brady plans to release details of the tax plan Nov. 1, but said a deal on the SALT deduction may wait until his committee begins voting on tax legislation the week of Nov. 6.