House Republicans narrowly pass budget, revealing signs of trouble for tax reform

House Republicans narrowly pass budget, revealing signs of trouble for tax reform
The Capitol is seen at dawn as storm clouds pass. J. Scott Applewhite/AP
The Capitol is seen at dawn as storm clouds pass. J. Scott Applewhite/AP

House Republicans just barely passed a budget Thursday morning, sending the document to President Donald Trump’s desk and officially kicking off the process of drafting tax reform legislation.

The budget passed by a margin of 216-212, with 20 Republicans voting no.

The budget merely allows Republicans to draft tax reform legislation that is not subject to a filibuster in the Senate — which would allow tax reform to pass without a single Democratic vote.

Republican leaders have yet to release the official tax reform legislation, and have merely outlined their general framework without specifics about how certain income levels will be taxed, nor what tax deductions could be eliminated in order to pay for the cuts.

So 20 GOP defections on the vehicle that simply starts the tax reform process should come as a warning for Republicans, who can only lose 22 House votes and still have tax reform pass.

The majority of the GOP ‘no’ votes hail from New York and New Jersey.

Both are high-tax states that would see many of their residents hit with tax increases thanks to the Republican effort to repeal the state and local tax deduction.

The state and local tax deduction — or SALT deduction — allow those who itemize their taxes to write off their local income tax and property taxes. Many residents in New York and New Jersey, as well as other large, blue states such as California, utilize the SALT deduction because their state and local taxes are so high.

Nearly 40% of those who earn between $50,000 and $75,000 claimed the SALT deduction in 2015, according to a study by the Government Finance Officers Association.

That provides Democrats with an easy line of attack against Republicans, allowing them to say that eliminating the SALT deduction would raise taxes on the middle class.