Compromise: Don’t let deductions derail tax reform
Members of Congress had better remain focused on their goal, and remember politics sometimes has to be the art of compromise, as the tax reform debate hits a bit of a snag.
With just days to go before important votes on tax reform packages are planned in both the House of Representatives and U.S. Senate, a major difference of opinion has reared its head.
It involves the question of whether state and local taxes should remain available as income tax deductions. Members of the Senate seem to favor eliminating the break entirely, in order to free up funding for other tax relief.
But the bill advancing in the House would retain as much as $10,000 per return in deductions for property taxes.
A substantial number of votes in both houses are at stake. Some lawmakers of both parties are adamantly against eliminating the local and state tax deduction. They come primarily from states with higher local and state taxes.
Some idealists argue the deductions ought to be scrapped because, in a way, they subsidize high-tax states.
But the bottom line is that if the Senate approach jeopardizes tax reform, lawmakers in both houses should go along with retaining some of the controversial deductions. Meeting in the middle on a few things will be better than no tax reform at all.