As House Republicans finalize their tax reform plan this week, their colleagues in some blue states remain wary of the bill's elimination of certain deductions. Republicans have proposed offsetting the $2 trillion in cuts outlined in their bill by tweaking certain deductions, which would raise $1 trillion in revenue over 10 years, The New York Times reports.
Policies under the knife include the federal deduction for property taxes in New Jersey, the deduction for state and local income taxes, and the mortgage interest deduction. The GOP plan proposes capping the federal deduction for property taxes in the Garden State at $10,000 as well as restricting the mortgage interest deduction only loans up to $500,000, The New York Times explains.
In the case of the state and local tax rule, one-third of New Jersey taxpayers claim that deduction. California and New York alone account for nearly one-third of the value claimed under that deduction nationwide. "I view it as a geographic redistribution of wealth," said Rep. Lee Zeldin (R-N.Y.). "You're taking more money from a state like New York, to pay for a deeper tax cut elsewhere.
The House plans to pass its bill by the end of the week. The Senate is working on its own version of a tax overhaul and is expected to release the bill in the coming days. Read more about the GOP's blue-state conundrum at The New York Times.