When the U.S. House votes Tuesday on the final tax cut bill, Californians will see clearly who their 14 Republican representatives put first – their party or their state.
This is a career-defining vote that voters should watch in deciding whether to support them next November.
The GOP tax plan, unveiled Friday, is bad for America in many, many ways. It increases the federal deficit, weakens health care and is a giveaway to corporations and the super-rich.
But the bill is especially awful for California.
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About one in three households – 6 million in all – claim tax deductions that would be reduced in the bill. They were worth about $100 billion in 2015. The average was $16,000 in state and local income taxes, plus $6,000 in property taxes. Under this bill, those deductions would be limited to $10,000 total, less than half.
More than 4 million households deduct interest on mortgages, an average of $12,000. Under this bill, interest could be deducted on the first $750,000 of a loan, down from $1 million now. Housing prices are more than that in much of California, including large parts of Orange and San Diego counties and enclaves such as Granite Bay represented by Republicans. The change will put home ownership even further out of reach for families.
For a state that has suffered immensely from wildfires and floods this year, the tax bill piles on by ending the deduction for losses from natural disasters that are not officially declared by the president. Insurance Commissioner Dave Jones was right to call the move “outrageous.”
Gov. Jerry Brown is also trying his best to stop the bill. On Monday, he released a video urging Californians to contact their GOP representatives. Brown says the plan would give a massive tax break to corporations paid for by “people who live in states that voted against Donald Trump. That’s not fair. That’s not treating America as one nation, indivisible, with liberty for all of us.”
When the House passed its bill last month, the tally was 227-205 and only three California Republicans voted “no” – Reps. Tom McClintock of Elk Grove, Darrell Issa of San Diego County and Dana Rohrabacher of Orange County.
If all 14 say no this time, it’s conceivable the bill could be defeated.
House Majority Leader Kevin McCarthy of Bakersfield is trying to keep Republicans in line so the bill passes. But in his district, nearly 30 percent of households take the state and local tax deduction, an average of $14,370 each. McCarthy, a Republican who claims he wants to lower taxes, is pushing to raise taxes on many of his constituents.
McCarthy has sought to shift blame by criticizing Brown and the Democratic Legislature for raising state taxes, most recently the gas tax. That’s the party line – that high-tax, Democratic states should no longer be subsidized by the rest of America through tax deductions. But California and other blue states send far more in taxes to Washington than they get back in federal spending.
Trump and his Republican minions also argue that this tax bill is focused on helping working and middle-class families. But their savings will be a pittance compared to the windfall for the wealthy. And many in California would end up paying more, according to a new analysis, while the richest 1 percent will save $14,170 each.
The lion’s share of benefits would go to corporations, whose tax rate would be slashed from 35 percent to 21 percent. While the individual tax cuts would end in 2026, the corporate tax cuts would be permanent. And guess who will face the brunt of spending cuts forced by the nearly $1.5 trillion these tax cuts would add to federal deficits? It won’t be the corporate CEOs and wealthy donors who love this bill.
Republicans like to claim they’re looking out for the common man. This is the time to put up or shut up.