House GOP leaders just scored a big win for their giant tax plan

Kevin brady paul ryanWin McNamee/Getty ImagesRep. Kevin Brady and House Speaker Paul Ryan.
  • Rep. Tom MacArthur of New Jersey said Monday that he would support the Tax Cuts and Jobs Act.
  • MacArthur has expressed concerns about the elimination of much of the state and local tax deduction, which benefits many in high-tax states like New Jersey.
  • Winning over MacArthur is a big victory for House GOP leaders trying to bring on lawmakers from those states.

Rep. Tom MacArthur of New Jersey said Monday that he plans to support the tax bill rolled out by House GOP leaders last week, despite changes to a key deduction for his state.

MacArthur was initially sceptical of the bill due to its proposed repeal of most of the state and local tax (SALT) deduction. The deduction allows people to subtract what they pay in state and local taxes from their federal tax bill. The deduction is particularly meaningful in high-tax states like New Jersey, New York, and California, as well as municipalities with high local taxes.

The repeal of the SALT deduction provisions, which would generate roughly $US1.5 trillion in new revenue over 10 years, drew the criticism from Republicans in the areas that benefit from it.

Many lawmakers from those states voted against the recently passed budget resolution that paved the way for tax reform, signalling possible trouble for the bill — there are enough GOP members from those states to block the Tax Cuts and Jobs Act (TCJA).

That forced Rep. Kevin Brady, the chair of the House Ways and Means Committee and author of the bill, to come up with a compromise on the SALT deduction which would allow people to deduct up to $US10,000 in property taxes but not sales and income taxes.

The compromise, according to MacArthur, was enough to win him over.

“Ten-thousand dollars is enough for the vast majority in my district and New Jersey,” MacArthur told Fox Business’ Brian Schwartz. “When I get most of what I asked for, it’s time to accept it.”

MacArthur also seemed open to the compromise during an appearance with Fox Business’ Maria Bartiromo on Sunday, saying that most constituents in his district took a SALT property tax deduction smaller than the $US10,000 cap.

“I spent the last three days actually looking at this $US10,000 cap on property taxes and I came to the only conclusion I think anyone eho really looks at ti came come to and that is: we just got a huge win for middle class taxpayers even in high tax states like mine,” MacArthur said. “A $US10,000 property tax limit still covers a vast majority of people in my state and in my congressional district.”

While there are still a slew of members — particularly from New York and New Jersey — who have expressed displeasure about the deal, getting MacArthur on board is a key win for the House GOP leaders, especially if they want to meet their deadline of getting the bill passed by Thanksgiving.

The next step for the TCJA is a markup in the Ways and Means committee, which will begin on Monday.

A spokesperson for MacArthur did not immediately respond to a request for comment.

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