Letter to the Hon. Mitch McConnell, Senate Majority Leader, the Hon. Paul Ryan, Speaker of the House, the Hon. Chuck Schumer, Senate Minority Leader, and the Hon. Nancy Pelosi, House Minority Leader - Issa Implores Tax Conference Committee To Restore SALT and Wildfire Tax Deductions

Letter

Dear Leader McConnell, Speaker Ryan, Leader Schumer, Leader Pelosi and Conferees,

I write to express serious concerns with the House and Senate passed tax reform proposals which, as written, could leave many constituents in my district facing significant tax increases. As the Conference Committee works toward a final package, I ask that changes be made to ensure that the final plan will bring relief for all of our nation's taxpayers -- California residents
included.

It's been more than three decades since we've overhauled our tax code. We have a once-in-a-generation opportunity to deliver real reprieve from years of heavy-handed, misguided tax policy that has left millions paying more to their government and getting less in return. We must not squander this moment by passing a bill that does not allow all hard-working taxpayers to see
relief.

Done correctly, tax reform has the potential to restore America's global competitiveness, generate widespread economic opportunity, unleash untold levels of job creation, and allow families to keep even more of their hard-earned paychecks. Done poorly, a tax bill would pick winners and losers, and unnecessarily punish some taxpayers to the benefit of others.

As its written today, I fear the bill looks more like the latter than the former.

Californians already endure some of the highest housing costs, the highest state sales taxes, the highest state income taxes, and the highest gas prices in the nation. They've been buried under the weight of high state tax and regulatory burdens which, together, have made it increasingly difficult to get ahead.

Yes, the tax factory known as the California State Legislature is the root cause of the problem. But my constituents did not ask me -- or any Republican for that matter -- to vote to make their tax burden even worse.

The House and Senate tax reform proposals do not guarantee relief for constituents in my district, and in fact, may result in a net increase in their financial liability to the federal government. Among the plan's deficiencies is the elimination of the State and Local Tax Deduction (SALT) which since the advent of our federal income tax has prevented the double taxation of Americans' income and allowed states to operate as laboratories of experiment as our founders intended. Eliminating this important deduction would be a mistake that would undo years of precedent that, in our federalist system, has said that the federal government may calculate its tax liability only after state and local taxes have first been deducted.

Unlike other states -- Wisconsin and Kentucky, for example -- California is a donor state, meaning it gets back less from the federal government than it pays in. Without changes to this plan, taxpayers in my state will continue being asked to pay even more only to subsidize benefits for citizens elsewhere.

Furthermore, as devastating wildfires continue to ravage our state, it would be unthinkable to do away with important and much-needed relief for constituents who've lost their homes, property and livelihoods. We must ensure that those who've already lost so much, won't be left without the important relief they need to rebuild and restore their lives. I know Majority Leader McCarthy and others are working diligently to address this concern by the end of the year, but we must ensure disaster relief is not weakened through this tax bill.

I implore the Conference Committee to include these proposals, as many of the cities I represent suggest in the enclosed letters. We have the opportunity to make the tax code work for all Americans. Now, let's get the details right.

Sincerely,

Congressman Darrell Issa

Source