California House Republicans back bill laying groundwork for Trump tax reform

Oct. 27--All 14 of California's House Republicans voted Thursday for a budget measure laying the groundwork for the Trump administration's tax reform plans -- as California Democrats argued that the plan could cost the state's taxpayers billions more each year.

The tax proposal put forward by President Donald Trump and Republican leaders would cut corporate and personal tax rates while getting rid of many popular deductions -- including the one that allows Americans to deduct the state and local taxes they pay. More than six million Californians take advantage of the state and local tax deduction (or SALT) each year, deducting an average of $18,438 per family. In all, California taxpayers deduct $112.5 billion in state and local taxes each year, the most of any state, according to the Tax Foundation.

The vote in the House on Thursday -- for a budget measure that will allow tax reform to pass without Democratic votes in the Senate -- was a nail-biter, with 216 in favor and 212 opposed. Twenty Republicans opposed the bill, most of them from other high-tax states like New York and New Jersey that would also be disproportionately affected by eliminating the deduction.

But even as Republicans like Rep. Peter King of New York argued that scrapping the deduction would "devastate" his state, the California GOP delegation hasn't broken ranks or spoken out against the plan.

In an interview Thursday afternoon, Rep. Mimi Walters, R-Irvine, stressed that the tax plan was still a work in process, and said Republican leadership was negotiating on the SALT issue. A final bill -- expected Nov. 1 -- could include some sort of compromise, such as limiting the SALT deduction instead of eliminating it altogether.

"Our delegation wants tax reform, and this is the first step to tax reform," she said. "There's nothing that's been set in stone."

Walters said she would base her vote on the final tax plan by looking at the overall effect on her constituents and whether "middle-class Americans will have more money in their pocket."

Most of the rest of the GOP delegation declined to comment on their vote or did not respond to interview requests.

Leading California Democrats have pushed back. On Wednesday, Gov. Jerry Brown wrote a letter to every House Republican from the state, urging them to vote against the tax plan because of the elimination of the SALT deduction.

"Can you tell me how much your neighbors and fellow citizens will have to pay because of this proposal?" he wrote. "Budget analysts say it will cost them many thousands of dollars!"

He added a few handwritten comments to individual members: "You know this is a turkey," Brown told Rep. Paul Cook, R-Yucaipa.

At a news conference Thursday, House Minority Leader Nancy Pelosi, D-San Francisco, concurred. "What they are doing is looting" California taxpayers, Pelosi said of her Republican colleagues. California Sen. Dianne Feinstein said in a statement that the plan would be "disastrous for American families."

Democrats are hoping to seize on the issue in 2018 campaigns, where a host of California Republican House members are considered among the most vulnerable GOP incumbents in the country.

"It's going to be a huge issue," predicted Parke Skelton, a Democratic strategist in Los Angeles who is working on Democrat Mike Levin's campaign against Rep. Darrell Issa, R-Vista. "The people most affected by this are going to be wealthy Republicans living in these coastal districts -- it's kind of a kick in the teeth to their base."

One reason the Californians lined up in support of the bill -- unlike their East Coast colleagues -- is the influence of Republican leader Kevin McCarthy, R-Bakersfield. The California GOP delegation similarly supported efforts to repeal the Affordable Care Act earlier this year, even as moderate representatives from elsewhere in the country jumped ship.

California's Republican delegation tends to "hang together pretty reliably in a way that is supportive of McCarthy and the leadership," said Republican strategist Rob Stutzman, especially on votes like this that move along the legislative process.

McCarthy's office did not respond to a request for comment.

Many of the Republicans who voted against the budget bill recorded their no votes only after the proposal received enough votes to pass.

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