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The Journal Gazette

  • Associated Press House Speaker Paul Ryan speaksin Washington on Thursday.

Friday, October 13, 2017 1:00 am

High-tax states called out

Against data, Ryan says they cost federal government

Associated Press

Also

Congress may miss vacation if tax overhaul not passed

WASHINGTON – Nothing seems to push lawmakers to get their jobs done and pass legislation more than the threat of having to be in Washington over the holidays. Knowing this, Speaker Paul Ryan made it clear Thursday that Congress staying in session over Christmas is in option if they have not advanced a tax overhaul bill by then.

“We're going to keep people here for Christmas if we have to,” the speaker said at a Heritage Foundation event. “I don't care. We have to get this done.”

If all goes according to plan, the House will pass its bill and send it to the Senate by November. “We are actually on track timeline wise,” Ryan said.

– Tribune News Service

WASHINGTON – The top House Republican on Thursday blasted high-tax states that deliver billions to the federal government as he faced a backlash from rank-and-file GOP lawmakers over a sweeping tax-cut proposal.

Speaker Paul Ryan went on the offensive against high-tax states like California, New York and New Jersey, even though disgruntled GOP lawmakers from those states need to be brought on board to support the $6 trillion tax overhaul. The Republican lawmakers from high-tax states oppose the plan's proposal to repeal the popular federal deduction for state and local taxes.

But Ryan contended the rest of the country is “propping up profligate, big-government states” that levy high taxes on their residents and spend recklessly.

“States that got their act together are paying for states that didn't,” the Wisconsin lawmaker said at an appearance at the conservative Heritage Foundation.

In fact, California, New York and New Jersey send many billions more in taxes to Washington than they get back in federal spending, new data show. Divided by total state residents, New York gets back 81 cents for every $1 it pays in, New Jersey receives 74 cents and California 96 cents, according to an analysis released last month by the Rockefeller Institute of Government.

The state-local deduction is claimed by about 44 million people and costs the government an estimated $1.3 trillion in lost revenue over 10 years.

Opposition to ending the deduction has produced an unusual alliance of the Republican lawmakers from high-tax, Democratic-leaning states; state and local government officials; public employee labor unions; and business groups like Realtors. Wary of the financial pinch their constituents and members could sustain, they are pressing the Trump administration to reconsider.

With Republicans splintered, the future of the tax overhaul plan is threatened by defections, even as the success of the package is a political imperative for Republicans who have pinned their hopes on notching a big legislative achievement to help them retain control of Congress in next year's elections.

Rep. Chris Collins, R-N.Y., a Trump ally, warned Wednesday that the affected states would need some “accommodations” to go along with eliminating the deduction for state and local taxes paid.

The states have a strong retort.

“New Yorkers send over $50 billion more to the U.S. government than they receive back. So New Yorkers, and in particular Long Islanders, are subsidizing the rest of the country; not the other way around as you suggested,” wrote Kevin Law, president and CEO of the Long Island Association, in a letter to Treasury Secretary Steve Mnuchin.