“Some improvements on tax bill with reinstatement of deductions for medical expenses and student loan interest. But #SALT deduction is still inadequate for New York and Long Island. I am voting NO.”
So tweeted Rep. Peter King (R-Seaford) on the eve of the tax reform vote that the longtime congressman has opposed.
Vote on the bill will have taken place by the time this edition has been published, but passage of the first major tax reform in 31 years is a near-certainty. King, along with Rep. Lee Zeldin (R-Shirley), is one of the few Republicans in the House of Representatives to oppose the bill.
The partial repeal of the state and local tax deduction (SALT) is where King has long made his opposition. Legislation passed by the House kept the deduction for property tax deductions, while legislation in the Senate eliminated the deduction entirely. The final bill will allow for the deductions for property taxes and state income taxes to be capped at $10,000, but that wasn’t good enough for King or Zeldin. Long Island’s two other congressmen, Rep. Thomas Suozzi (D-Glen Cove) and Rep. Kathleen Rice (D-Garden City) also voted against the bill, as did the rest of the Democratic Party caucus.
There will be seven tax brackets under the new bill: 10, 12, 22, 24, 32, 35 and 37 percent. The top rate will fall from 39.6 to 37 percent. The bottom rate remains at 10 percent, but experts say that it covers twice the amount of income compared to the previous bracket. The final draft calls for larger tax credits for children and non-child dependents. The Senate bill repealed the individual mandate from the Obamacare health care bill and that repeal was included in the final draft.
“Repealing the mandate saves the government about $300 billion over a decade, because without the mandate, fewer people will choose to carry health insurance,” said Josh Barro, writing in Business Insider. “This means the government is on the hook for less money to subsidize insurance purchases.”
The individual mandate repeal is considered one of the ways to pay deficits likely to be incurred by any tax cuts. Another savings device is by setting the expiration of individual income tax cuts even earlier than the 10 years they are allowed to grow deficits under senate budget rules. The Joint Committee on Taxation has estimated that any tax cuts will mean by the federal debt will grow by more than the $1 trillion under the bill.