All 14 California House delegates voted today to back a budget blueprint that could eliminate state and local tax deductions, a move that would cost one out of three taxpayers thousands of dollars.
All 14 California House delegates voted today to back a budget blueprint that could eliminate state and local tax deductions, a move that would be costly for many California taxpayers.
Some members in vulnerable districts immediately sought to downplay the vote, saying they have been assured the Republican tax overhaul will tackle or offset the potential tax hit from the loss of those deductions. The vote clears the way for House leaders to unveil their tax plan next week.
“I am confident (it will be fixed), but I’ve also said that is my number one priority, so if we can’t get it fixed then we’re going to have problems,” said Rep. Steve Knight of Palmdale.
A day earlier, Gov. Brown had pleaded with GOP members not to support the budget. About one in three California taxpayers claim the deduction. If it were repealed, filers would see an average increase of $3,290.
“Getting rid of an individual’s ability to deduct his or her California taxes is a horrible idea, but it is made far worse when you preserve—at the same time—the right of corporations to take those same deductions,” he wrote.
The Republican plan calls for steep tax cuts for corporations and promised reductions for middle-income taxpayers, a doubling of the standard deduction used by most Americans, shrinking the number of tax brackets from seven to three or four, and the repeal of inheritance taxes on multimillion-dollar estates. The child tax credit would be increased and the tax system would be simplified.
Already, House Minority Leader Nancy Pelosi of San Francisco is vowing to label Republicans “accomplices” in eliminating the state and local tax deduction. As soon as President Trump unveiled his budget framework that would eliminate the write-off, state Democrats condemned the move for targeting taxpayers in high-tax, high-cost states such as California.
But California Republicans remain committed to overhauling the tax code. Prior to the vote, House Majority Leader Kevin McCarthy of Bakersfield said, “A vote for the budget is a vote to move tax reform forward.”