Sometimes the opportunity for major policy change comes in disguise. An example is the question of whether the House will adopt the Senate budget resolution including its provision to eliminate the deduction for state and local taxes.
Republican Rep. Peter King, from high-income, high-tax Long Island is raising the possibility that elimination of the state and local tax deduction will be dropped. He says that he believes that at least 21 of his fellow Republicans will oppose the resolution for that reason. With 240 House Republicans currently, and 218 votes needed to win (there's one Republican vacancy), the Republican leadership can afford 21 defections — but not 23.
The state and local tax deduction is of negligible political and economic importance in most congressional districts, because the great majority of taxpayers there save more by taking the standard deduction (which the Republican budget resolutions would raise) than they would net by deducting state and local taxes. Where it really bites is in high-income, high-tax districts like Peter King's.
Currently there are 28 House Republicans from the highest tax states — Connecticut (0), New York (9), New Jersey (5) and California (14). This is a much lower number than in the past, as voters have trended Democratic in high-income suburbs in the House; in the Congress elected in 1994, for example, there were 50 such Republicans, which meant that abolishing or limiting the state and local tax deduction just wasn't going to happen.
Some of those 28 current House Republicans from those come from districts where the deduction is not so important — six from interior California for example, including Majority Leader Kevin McCarthy, and six from Upstate New York. And there are a few other House Republicans, including Virginia's Barbara Comstock, Illinois's Peter Roskam and Randy Hultgren, and Minnesota's Erik Paulsen who come from high-income districts where 46 percent-51 percent of tax filers take the deduction.
The state and local tax deduction is an important issue, because it in effect subsidizes high state and local spending, and therefore also subsidizes powerful public employee unions in large parts of the country. If the deduction is eliminated or scaled far back, that will weaken a major source of money for the Democratic party nationally. All the more so if the Supreme Court, as widely expected, rules in Janus v. American Federation of State, County and Municipal Employees that public employees' dues can't be automatically deducted and paid to unions.
The Senate version of the budget resolution would allow the Senate to eliminate the state and local tax deduction with just 50 votes. Senate Republican leaders wouldn't have to worry about colleagues from the high-income, high-tax states: Connecticut, New York, New Jersey and California, and Virginia and Minnesota as well, have a grand total of exactly zero Republican senators.
The House Republican leaders, however, need to worry about Peter King's 21 votes, and perhaps more. Word is that they're considering just limiting the deductibility of state and local taxes instead of eliminating it entirely. One way would be to eliminate it for very high income taxpayers — a small number of people who contribute hugely disproportionately to state and local revenues. This would put pressure on state and local budgeteers and public employee unions without affecting very many voters — people with incomes at the $100,000-$200,000 level, say, most of whom do not consider themselves rich.
Of course it's usually better to eliminate a noxious tax provision entirely rather than to leave it partly in place, where it can be more easily expanded again later. But Republicans here have a window of opportunity, one that might never open again for years, to strike a one-two punch against unfair public institutional support of the Democratic Party. Public employee union dues come entirely from taxpayers.
Some may not like to hear it, but this window of opportunity has come open only because Donald Trump was elected president.