Nixed State, Local Tax Deduction Makes New GOP Tax Plan a Tough Sell for Some Republicans

The Trump administration and congressional Republicans took a step forward in their attempt to overhaul the US tax code on Thursday by releasing legislation proposing sweeping changes.

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The Trump administration and congressional Republicans took a step forward in their attempt to overhaul the US tax code on Thursday by releasing legislation proposing sweeping changes.

The "Tax Cuts and Jobs Act" will include a broad set of proposed changes to the corporate and individual tax system, building off a nine-page framework the White House and congressional Republican leaders dropped in September. 

Among the details of the new bill emerging Thursday morning is a proposed elimination of the state and local tax (SALT) deduction, which is a benefit that allows people to deduct those taxes from their federal bill. House Ways and Means Committee Chair Kevin Brady said Tuesday the GOP reached a deal that would allow people to deduct state and local property taxes up to $10,000 but not income or sales taxes.

While most House Republicans are in favor of getting rid of the SALT deduction, this proposal is likely to be one of the biggest hangups for those House Republicans in states like New York, New Jersey, and California, which could prove to be an obstacle to the bill's passage.

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Caroline Cournoyer is GOVERNING's senior web editor.
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