House and Senate Republicans seem to be coming to their senses – a little bit, anyway – on the subject of tax reform. With both houses of Congress having savaged the deduction for state and local taxes, Republicans in both chambers are now looking for a way to restore at least some of that benefit.
This is an urgent matter. Voters of both parties have made long-term financial decisions based in large part on the size of their disposable incomes. Tens of millions of those voters live in states with income taxes and high property taxes. The ones who live in this state are already net donors to the federal government, sending more in taxes than they ever get back in benefits or services.
And yet, Congress – with the enthusiastic support of two Western New York Republicans – is looking to siphon even more money from this state’s taxpayers while pushing a tax bill that sends the budget deficit skyrocketing and that will cause house prices to fall, according to the National Association of Realtors.
The arithmetic on this misbegotten measure has been wrong from the get-go. That the party of balanced budgets is pushing it represents a special kind of hypocrisy.
Perhaps some version of reality is beginning to dawn. Republicans in the House and Senate are discussing a more generous deduction for state and local taxes than was included in either of their separate bills. If they do, the deduction is almost sure to be limited and, thus, no better than half a loaf. But it would still mark an improvement over the expensive disaster they produced without regard to process, mathematics or common sense.
That has been the story of this Congress since it was seated in January. Its efforts to repeal the Affordable Care Act were similarly unmoored from any facts. They had repeatedly promised to repeal that law while President Barack Obama was in office, but once in power, produced noxious, poorly vetted legislation that would have hurt millions of Americans and that, not coincidentally, failed.
What is wrong with responsible legislating? Why not hold hearings, score the bills, adjust them to political and economic realities and produce something broadly acceptable? There is a good case to be made for easing business taxes, for example. Instead, Congress has been trying to give away the store to the wealthiest Americans while penalizing the poor, the middle class and residents of high-tax donor states.
That was the shock that Western New Yorkers absorbed last month, as Reps. Chris Collins, R-Clarence, and Tom Reed, R-Corning, cheerfully supported the House measure that gouged their own constituents. Alone among New York Republicans, they voted for a bill that was not in their state’s interest and that balloons the budget deficit by $1 trillion over 10 years. Voters have every right to demand an explanation.
Reed, at least, seems to be aligning his ideas with reality. Speaking of discussions on the fate of the state income tax deduction, he said, “I think there’s a natural conversation being had in regards to expanding the state and local tax deduction from not just property.”
He’s right: It is a natural conversation, but one that this feckless Congress studiously ignored when it voted on the measure. With a conference committee due to hash out the differences between the House and Senate bills, it’s late in the game to begin a conversation that should have been natural. At least it’s happening, though, and Reed is on board.
This change is important to New York and other states, but it is important to note that it still doesn’t make the bill right. America is in the midst of an economic boom. Stocks are soaring. Flush with revenue, Washington should be looking to reduce the deficit and pay down the national debt. This is the time to act on that.
Instead, Congress is looking to expand the deficit in favor of the wealthiest Americans and a trickle-down theory that has been thoroughly discredited. And, unless a change is made, it will do so while picking New Yorkers’ pockets. It’s a bad bill.