WASHINGTON D.C. — Congressman Tom Reed broke with other Republican lawmakers in the U.S. House of Representatives and voted to remove the cap on state and local taxes, a key controversial portion of 2017 tax law.
The measure passed nearly along party lines, 218-206, Thursday. Reed (NY-23) was one of only five Republicans to vote for the legislation. He was also the only Republican to vote for the bill in the Ways & Means Committee the previous week. Syracuse Rep. John Katko (NY-24) was one of the other five.
In 2017, Reed was on the fence over voting for President Trump’s signature piece of legislation at the time, the Tax Cuts and Jobs Act.
Though he ultimately decided to vote in favor of the package, Reed was concerned over the implementation of a cap on the amount of state and local taxes individuals and married couples can deduct from their federal taxes if they itemize. The provision adversely affects filers in states with high taxes like New York, California, New Jersey and Illinois because their heavier tax burden means filers are more likely to reach the cap.
The bill passed Thursday would remove the cap, which is now set at $10,000 for individuals and couples. It also makes some additional changes like allowing teachers to deduct more from their taxes for buying school supplies.
“These are real Americans, these are real New Yorkers that are paying this tab and until Albany gets its act in order, I’m going to be a voice to help them out in the meantime,” Reed told the Ithaca Voice.
Reed defended the provision in 2017, blaming Democrats in the New York State Legislature and Gov. Andrew Cuomo for levying high taxes. He still believes that lowering state taxes is the ultimate fix, but keeping the cap is a burden on taxpayers.
“If you want to have a permanent fix to the state and local tax deduction quagmire, fix the state capitals,” Reed said.
Republicans on the fence, like Reed, were crucial to passing the 2017 tax bill, which passed 227-203. Eleven Republicans from high tax states voted against it, largely due to the SALT provision. Originally, the bill had called for a total repeal of the SALT deduction, but Reed and some others were won over when the bill was revised so that instead of being scrapped entirely, the deduction would just be capped at $10,000
“The SALT cap of $10,000 is higher than the national average of SALT deductions because of Republican lawmakers in high-tax states who weighed in aggressively during tax reform,” added Reed.
Now with Democrats in control of the chamber, the bill to remove the cap places some Republicans, including Reed, at odds with their colleagues on the right who want to keep the provision. Rep. Kevin Brady (R-TX), ranking member on the Ways and Means Committee, ripped into the SALT cap repeal in debate the House floor.
“Placing the cap on the SALT deduction to let middle-class families, not the wealthy, keep more of what they earned is a crucial component of achieving this economic victory for American workers and their families,” Brady said. “That old broken regressive SALT tax break for the wealthy has no place in a fair modern tax code.”
Republican opposition to the bill means it’s unlikely to be brought up for a vote in the Senate. The vote in the House, however, made Republicans, especially those in highly competitive districts like Katko, to choose whether or not to break ranks. At the same time, it allows vulnerable Democrats, like Rep. Anthony Brindisi (NY-22), who campaigned against the cap, to show they tried to remove it.