Senate GOP leader OK with deducting local income, property taxes

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Senate Majority Leader Mitch McConnell said Wednesday he favors expanding a deduction for state and local taxes. | AP Photo

WASHINGTON — The top Senate Republican said Wednesday he favors expanding a deduction for state and local taxes to enable Americans to deduct local income taxes as well as property taxes. It was a concession to Republicans from high-tax states who oppose the sweeping tax bill.

The proposal is a possible solution to a standoff with rebellious House Republicans as Congress hurtles toward enacting major tax legislation. The tax bills passed by the House and Senate would end deductions for state and local income and sales taxes, while allowing only a deduction up to $10,000 for property taxes.

Several GOP lawmakers from high-tax states voted against the House bill last month.

Senate Majority Leader Mitch McConnell, R-Ky., said allowing the deduction also to be used for state and local income taxes “sounds like a kind of reasonable idea.” He was speaking on the Hugh Hewitt radio show.

GOP lawmakers from California — where income taxes are high while property taxes are somewhat contained by state law — are pushing for allowing local income taxes to be deducted.

McConnell’s support gives momentum for a possible compromise as Republican lawmakers prepare to reconcile the differing House and Senate bills. Days and nights of tough negotiations await. The lawmakers are pushing to send a final blended package to President Donald Trump to sign before Christmas, which Republicans see as a pressing political imperative to preserve their majorities in Congress in next year’s elections.

The House and Senate bills both would provide steep tax cuts for businesses and more modest tax breaks for families and individuals. The tax cuts in each bill add up to about $1.5 trillion over the next decade.

Sounding a discordant note among the positive talk on the tax bill, a number of Republicans are casting the bill as a boost to big corporations and the wealthy instead of the middle class.

“Fundamentally if you look at the bulk of the bill, two-thirds of it, it’s tied on the business side,” Rep. Mark Sanford, R-S.C., said Tuesday as leaders in the House and Senate hailed their respective measures as an advantage for working Americans.

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