Tax decision

White House 'close' on state, local tax decision, N.Y. rep says

By AARON LORENZO

Top Trump administration officials are nearing a decision on the federal deduction for state and local taxes in a tax overhaul, they told New York’s nine GOP House members late Monday.

Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn promised in a phone call with the lawmakers they would work on the issue throughout the day Tuesday, said Rep. Dan Donovan (R-N.Y.).

“They’re saying they’re close,” Donovan said.

But he wouldn't say whether he’d vote against tax legislation if it doesn't treat the longstanding deduction to his liking. Congressional Republican leaders previously proposed getting rid of it, with support from President Donald Trump.

More recently, in an effort to maintain support for their broader tax bill, House GOP leadership proposed keeping a deduction for property taxes but ending it for non-federal income and sales taxes.

Mnuchin and Cohn didn’t commit to fully preserving or eliminating the existing deduction, which matters in high-tax states like New York that funnel more tax revenue into federal coffers than they get back in benefits, Donovan said. They also didn’t commit to a compromise, either.

But Mnuchin's and Cohn’s New York ties – both have lived and worked there – give them a better understanding of the situation than others who have called for killing the deduction, Donovan said. The same is true of Trump, Donovan said.

“They understand how important it is to the nine of us and the people we represent,” he said.

All nine Republican House members from New York spoke on the call, Donovan said, adding that he and the others heard more about this issue from constituents than anything else over their past few days back in their districts.