House Ways and Means Committee Chair Jason Smith (R-Mo.) is setting expectations for a tax fight that’s only getting hotter: the battle over deductions for state and local taxes.
New York Republicans got a bruising dose of reality last week from their GOP colleagues on SALT. Eighteen House Republicans wouldn’t even support a rule — typically a party-line vote — to tee up a bill allowing a minor boost in deductions.
We caught up with Smith on the SALT impasse during our exclusive sit-down with the Missouri Republican, which you can read in this week’s The Sunday Vault.
Smith delivered a hard truth for blue-state Republicans about next year when the GOP-crafted, $10,000 cap is scheduled to expire along with much of the 2017 Republican tax law:
Smith added the cap also brought in hundreds of billions of dollars “that was used to lower tax rates for everyone.” Keeping the cap in place could bring in more than $900 billion over a decade.
Blue-state Republicans argue the cap is hurting them in election contests that could determine who controls the House, but that hasn’t turned the tide.
Smith said he wanted to aid the New Yorkers and met with them extensively as he prepared his bipartisan tax package. But he was also trying to help them understand they just didn’t have the numbers on SALT.
Smith acknowledged proponents of lifting the cap will have the most leverage next year because it expires and said he’s open to compromise.
Smith on what’s next: We covered much more ground in our interview with Smith for The Sunday Vault:
→ Smith is confident his $79 billion bipartisan tax bill will become law — and most likely as-is — after talking with GOP senators. But he’s also warning Senate Republican opponents that opening it to amendments could lead to the child tax credit portion of the bill growing. Smith believes there’s enough Senate GOP support to go bigger on the family benefit.
→ Smith’s next tax policy projects for Ways and Means include pulling back clean energy tax credits from the Democrats’ Inflation Reduction Act, expanding 529 education savings plans and cracking down on tax-exempt nonprofits dabbling in politics.
→ Smith is setting up Ways and Means member-led working groups “very shortly” to prepare for the expiration of many of the 2017 Trump tax cuts at the end of next year. He told us everything — meaning all aspects of tax law and new policies — is on the table as part of the negotiations.
— Laura Weiss
