California Republicans face backlash after vote that could lead to ending popular tax deduction

Oct. 28--Five months ago, all 14 members of California's Republican congressional delegation voted to repeal the Affordable Care Act, despite angry constituents and projections showing that millions of Californians would lose health coverage.

Now, as Congress debates a tax reform plan, the state's GOP representatives are again sticking together to move the proposal forward, even as other Republicans from around the country break ranks because it eliminates popular deductions for the state taxes and local taxes that Americans pay.

The Republicans insist that tax reform will be good for the country as a whole -- and most taxpayers individually, but Democratic strategists are already planning to use the votes against them, adding it to their attack ad arsenal for the hotly contested 2018 midterms, when several Republican House members are expected to face tough races in swing districts.

California's leading politicians fired away Friday. Gov. Jerry Brown called the GOP House members "sheep." House Minority Leader Nancy Pelosi accused them of "looting" Californians.

"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, one of the most vulnerable Republicans. "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."

But many Republicans said the Democratic rhetoric was jumping the gun.

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

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

The GOP tax plan would steeply cut corporate and personal tax rates while getting rid of most deductions. That will pinch the Golden State because more than six million Californians take advantage of the state and local tax deduction 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.

While Thursday's vote was just the first step in a longer process, some political analysts think the votes could have serious political consequences.

"Those representatives are probably going to be worrying about their votes as time goes on," predicted Jack Citrin, a professor of political science at UC Berkeley.

Even a handful of California Republicans could have swung Thursday's vote for a budget measure that will allow tax reform to pass without Democratic votes in the Senate. It 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. Rep. Peter King of New York argued that scrapping the deduction would "devastate" his state and his suburban Long Island district.

Some Republicans also point out that the higher taxes Californians would have to pay without the deduction would be offset to some degree by a reduction in the overall tax rate under Trump's plan.

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."

Her district includes 78,074 households that claimed state and local tax deductions in 2015, according to Internal Revenue Service data compiled by congressional Democrats.

Gov. Brown, who had written letters to the delegation urging the Republican House members to vote against the tax plan, told reporters that the issue would help lead to some of the Republicans losing their seats next year.

"There's a lot of slavish adherence to the Republican leadership," he said.

Issa, however, fired back, arguing in his own letter to Brown on Friday that the SALT deduction "has only become of such importance as a direct result of the tremendous weight that your misguided policies have put on California taxpayers."

He was referring to the fact that Californians -- particularly high-income Californians -- pay some of the highest state income tax rates in the country.

A big reason the Californians lined up in support of controversial bills like the tax reform and health care efforts -- unlike their East Coast colleagues -- is the influence of Republican leader Kevin McCarthy, R-Bakersfield.

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

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

Not all political observers believe that the GOP House members will be punished for their vote.

Sacramento GOP strategist Mike Madrid argued that because the delegation had survived the 2016 election, they weren't facing any huge danger in the lower-turnout midterms. And if the final tax reform bill cuts taxes overall while also preserving some form of the SALT deduction, it could be a net benefit for the House members, he said.

"They can argue that the (tax) problem isn't Washington, the problem is Sacramento," he said.

Rep. Duncan Hunter, R-San Diego, made a similar argument in a local TV interview on Friday. "Why punish the rest of the nation because California is stupid?" he asked.

Sal Russo, a Republican political consultant and tea party activist, agreed that the deduction could be a political issue in future elections. But he argued that the local property tax deduction didn't make sense from a larger perspective.

Alluding to the fact that property taxes are often high in coastal California because housing prices are out of sight, Russo asked: "Is it really fair for Middle America to have to subsidize expensive houses in liberal San Francisco? It's hard to get your dander too far up about that."

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