Senate Republicans held together in votes on eliminating the state and local deduction Thursday, clarifying the politics around the top tax break the Trump administration hopes to kill to raise revenue for rate cuts.
On mostly party lines, the Senate voted in favor of an amendment, submitted by Sen. Shelley Moore Capito of West Virginia, supporting an end to the $1.3 trillion tax break to offer tax relief instead to middle-class taxpayers.
"We must reduce expensive deductions that do little to benefit everyday Americans," Capito said. "That money would be better spent on the middle class."
Sen. Rand Paul of Kentucky voted against the amendment, while Democrat Joe Manchin of West Virginia voted in favor.
Minutes later, Republicans voted as a party to stymie an effort by Democrat Maria Cantwell of Washington to have a vote on requiring a 60-vote threshold for any bill that modified the state and local tax deduction.
Thursday's votes came as amendments to the budget Republicans are trying to pass to unlock the procedure that will allow them to pass tax legislation without facing a Democratic filibuster.
Ending the state and local deduction is one of the most contentious issues facing Republicans as they move toward a major tax bill. In the House, representatives of high-tax states such as New York and New Jersey have tried to negotiate to keep some of the break for their constituents.
While Republicans favor eliminating the deduction, the stated point of the overhaul is that they aim to do so while also lowering tax rates and simplifying the tax code, not simply ending a tax break.
"I wouldn't favor eliminating that deduction unless we are lowering the tax rate enough that people in New York state, that people in Orange County, California, are paying less in total taxes," Sen. Ted Cruz, R-Texas, said Wednesday night in a debate on tax reform with Bernie Sanders, I-Vt. "They're not deducting their state and local taxes, but the rate is a lot lower so the check they're writing at the end of the day is smaller."
Nevertheless, Democrats have rallied around preserving the break and used the opportunity to accuse the GOP of raising taxes on the middle class.
Americans Against Double Taxation, a coalition of state and local officials and real estate agents, encouraged senators to vote Thursday against Capito's amendment and in favor of Cantwell's, saying that eliminating the break "could subject households to double taxation and chip away at the [state and local tax] deduction that supports the middle class, homeowners and public services such as education and public safety."