Connecting state and local government leaders
Sen. Susan Collins is proposing to change state and local tax deduction provisions in the bill to mirror House legislation.
WASHINGTON — U.S. Sen. Susan Collins said on Wednesday night that she had filed two versions of an amendment to include a $10,000 deduction for state and local property taxes in the Senate's tax bill.
The Maine Republican told reporters that one version of the amendment outlines "payfors" to offset lost federal tax revenue that would result from the change and that the other version does not.
"The Finance Committee Republicans and the leadership have been very supportive," Collins said as she discussed the property tax deduction proposal. "The president has endorsed it," she added.
As it stands, the Senate bill would end the existing federal deduction individuals can claim for state and local real estate property taxes.
Collins made her remarks shortly after the Senate voted 52-48 to begin debate on the sweeping Republican tax overhaul.
It was a party-line vote. All of the Republicans in the chamber voted to move forward with the measure. No Democrats joined them.
Although there was enough support to clear the procedural hurdle to begin debate on the bill, it was still an open question Wednesday whether Republicans had enough support within their ranks to secure final passage of the legislation.
"I think we'll get them," said Sen. Orrin Hatch, a Utah Republican, when asked Wednesday evening if he was confident that Republicans had enough votes lined up to pass the bill. "We're working at it." Hatch chairs the Finance Committee, which crafted the Senate tax bill.
The payfors Collins said she would prefer to use to offset her property tax proposal involve bumping the corporate tax rate in the bill to 21 percent, from 20 percent and keeping the top individual income tax rate at 39.6 percent, instead of lowering it to 38.5 percent.
Collins emphasized that she did not mean to imply that the Senate GOP leadership had endorsed the payfors, but that they had endorsed the inclusion of the $10,000 state and local property tax deduction.
"They're not crazy about my payfors, I will admit," the senator acknowledged.
If the Senate legislation were amended to include the capped property tax deduction, it would mirror legislation the U.S. House passed earlier this month. Both the Senate bill as written and the House bill as passed would eliminate the so-called SALT deductions individuals can now claim on federal tax returns for state and local income and sales taxes.
Groups representing state and local governments have fought to maintain the SALT deductions. But the odds of a final piece of legislation including anything more than the $10,000 deduction for property taxes appear increasingly dim.
Route Fifty asked Hatch Wednesday if he expected the bill to be amended to include the $10,000 property tax deduction. "I'm not sure what's going to happen," he replied. "We just have to wait and see."
Would he support adding the capped deduction?
"No," Hatch said at first when asked that question. Then he added: "Well, I'd have to look at it."
Bill Lucia is a Senior Reporter for Government Executive's Route Fifty and is based in Washington, D.C.