Issa pushes back against Calif. governor in tax debate

Rep. Darrell Issa (R-Calif.) pushed back on Friday against his state’s governor’s warning about the proposed elimination of a deduction for state and local taxes in GOP plans for tax reform.

California is one of the populous, high-tax states that could suffer the most if Republicans decide to eliminate the state and local tax deduction (SALT).

Gov. Jerry Brown, a Democrat, sent letters to the Republican members of the California delegation this week, urging them all to oppose any proposal that takes away the deduction.

“Getting rid of an individual’s ability to deduct his or her California taxes is a horrible idea, but it is made far worse when you preserve — at the same time — the right of corporations to take those same deductions,” Brown wrote.

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House Republicans narrowly adopted a budget on Thursday that paves the way for the party to pass a tax overhaul without any Democratic support in the Senate. The budget allows the GOP’s tax bill to raise the deficit by $1.5 trillion.

Most Republicans in the New York and New Jersey delegations voted against the budget over concerns about the SALT deduction, which many of their constituents use to avoid being taxed twice.

But Issa and all the other Republican members of the California delegation voted for the budget to get tax reform moving.

Issa suggested that the SALT deduction wouldn’t be needed if California wasn’t such a high-tax state. He cited the nonpartisan Tax Foundation’s analysis estimating that California’s combined state and local taxes are among the highest in the nation.

“I recognize the role of the state and local tax deduction to reduce the tax burden on many Californians, but let’s be clear: it has only become of such importance as a direct result of the tremendous weight that your misguided policies have put on California taxpayers,” Issa wrote in a letter Friday responding to Brown.

“I will continue fighting for a fairer and simpler tax code that allows our constituents to keep more of their hard-earned money. I wish you could say the same,” he added. 

“It’s unconscionable that Rep. Issa would tax the people of his district while exempting his corporate allies and sponsors. What a betrayal of his oath of office,” Brown responded in a statement to The Los Angeles Times. 

Issa narrowly won reelection in 2016 in a San Diego-area district that was carried by Hillary Clinton, making him one of Democrats’ top targets next year.

The House Ways and Means Committee is expected to release its tax reform legislation next Wednesday. GOP leaders are trying to seek a compromise over the SALT deduction to win over enough Republicans in populous states whose constituents would be affected.

House Republicans are hoping to pass the legislation by Thanksgiving so it can be enacted by the end of the year.