SACRAMENTO (CBS13) — House and Senate Republicans have reached an agreement on the tax plan and seem to have enough votes to push it through Congress. But what looks like a victory for Republicans has Democrats outraged.
“We think this tax plan is a tax scam,” said Assemblyman Phil Ting (D-San Francisco), chairman of the Budget and Finance Committee.
GOP House and Senate leaders released the final text of the legislation Friday after working out the differences between the two bills. One notable part of this final agreement eliminates the individual mandate penalty under Obamacare.
“It has been 31 years in the making,” said Rep. Kevin Brady (R-Texas). “We’re also going to have tax relief for families who live in these high tax states.”
But in California, Ting is not on board. Under the new tax plan, Californians can only deduct a total of $10,000 for state property taxes and income taxes combined. In the Bay Area, the Government Finance Officers Association says the average amount deducted is $24,000.
“They’re taking away our state income tax deduction so Californians, whether you are the wealthiest Californians, or you’re the poorest Californian, you are going to be really hurt,” Ting said.
Senate Minority Leader Chuck Schumer echoed Ting’s position, saying the new plan is the opposite of what America needs.
In a statement, Schumer said, “Under this bill, the working class, middle class and upper-middle class get skewered while the rich and wealthy corporations make out like bandits.”
GOP leaders gained key “yes” votes they need to pass the bill from a number of Republican holdouts. Sens. Bob Corker, Marco Rubio and Mike Lee all announced their support on Friday after Republican leaders made compromises in the bill to meet their demands. No Democrats are expected to vote for the legislation when the House takes it up on Tuesday.
Ting says he’s ready to take action in 2018.
“We’re going to go in January when we get back in session and look at some options,” he said.
One option is to move from a state income tax system to a payroll tax system so a person’s income would be reduced by state taxes on the front end, instead of paying taxes and deducting it later. And Ting says, Californians can expect a ballot measure.
“I think what we’re really looking at is a direct response to this tax scam and seeing if we can take some of the money that the middle class gave to corporations and bring it back to the middle class,” he said.
Lawmakers will have the weekend to read the bill before voting on it next week. There is still concern about Republicans John McCain and Thad Cochran, who are battling illness. But both are expected to vote yes.