Key House lawmaker sees progress allaying tax deduction concerns

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The Senate passed the budget measure last week and the House endorsed it without changes, a step created to allow Republicans to move quickly to the tax measure in hopes of passing it into law this year.

NY and California's Democratic governors said on Friday residents would face hefty tax increases and some would leave their states under a proposal in the Republican tax plan that would eliminate state and local tax (SALT) deductions on federal income tax.

"I'm confident that there will be a tax bill". John Cornyn, the Senate majority whip. The House budget resolution passed by only four votes. If, 12 months hence, GDP growth roars at 3 to 4 percent or more, Republicans should keep the House, hold the Senate and possibly capture at least eight net seats among the 25 that Democrats will defend.

The 216-212 vote permits Republicans to begin work on a follow-up $1.5 trillion tax cut and move it through Congress without fear of blocking tactics by Democrats.

But deficits aren't the only area where Republicans are still trying to find common ground. Republicans have yet to introduce a tax reform bill, instead laying out a framework.

The State and Local Tax deduction - the SALT deduction for the tax-wise - almost derailed the House budget vote this week.

"This is an attack on California, New York and New Jersey, and other states that would not vote for Trump", Brown said.

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In the absence of details on how to pay for those rate reductions, the fight over the SALT deduction is instructive.

Generations of hard working homeowners have counted on our longstanding tax policies to help make a middle-class life possible.

"However, municipal bonds issued by high tax states and localities would likely become even more valuable to investors, and there could be stronger demand from retail investors, bringing yields and muni-Treasury ratios down", Barclays said. This would hurt the middle class. Read CNN Money's Jeanne Sahadi for a full breakdown of the deduction.

On his website, Frelinghuysen says that "New Jersey taxpayers already bear one of the heaviest tax burdens in the nation from state, county, and local taxes: income taxes, property taxes, and sales taxes" and that he is "committed to lowering our tax burden wherever and whenever I can".

In another measure to offset lost revenue, House Republicans have considered eliminating or capping the ability to contribute to the plans on a pre-tax basis, but Trump has said he wants to protect the popular tax-deferred savings program. "So do I. I think that's a good start", Brady said.

But House Republican leaders came within two votes of failure. "We continue to hone through some solutions and what it means for their taxpayers", he said of the House members who are concerned about the deduction. The KBW bank index gained as much as 1.2% to reach the highest intraday level since November 2007. That kind of money will be critical to pay for other parts of the bill. But not all are convinced that that's true. He and Republican congressional leaders have said they want the deal passed by the end of the year. This would do exactly nothing for the middle class.

Debate on tax reform has been underway for some time now.

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