Tax Overhaul Puts California Republicans In Tight Spot

LOS ANGELES, CA — California’s Republican legislators, already an endangered species, are in a precarious position thanks to the Republican tax plan, which forces them to choose between their party’s signature legislation and protecting many of their constituents from having to pay more in taxes.

The tax plans under consideration in the House and Senate ostensibly reduce taxes, but they eliminate tax deductions that are particularly valuable to Californians. Specifically, the House bill eliminates the individual deduction for state and local taxes and places a cap on the mortgage interest deduction, and the Senate bill eliminates the property tax deduction. As a result, many California voters could lose tens of thousands of dollars in tax breaks. Republican legislators face possible backlash from conservative voters expecting their tax burden to be reduced.

This week, the first of the state’s 14 Republican legislators broke ranks to come out against the bill. Darrell Issa (R-Vista) announced his opposition to the Republican tax plan with a scathing denunciation. Issa’s seat is considered one of the most vulnerable in next year’s election.

“The House bill needed to deal fairly with the recognition that Californians should not pay taxes on the same income twice,” Issa told the San Francisco Chronicle. The senate’s bill, he said, goes “from bad to hopeless.”

About a third of Californians use the state and local deduction — an average deduction of $18,437 from their income, the Chronicle reported.

Several Democrats accuse the Republicans of drafting a tax plan that punishes residents in Democratic-leaning states because they tend to have higher state taxes and property values. In addition to killing the state and property tax deductions, the bills would eventually eliminate the ability to deduct losses from earthquakes and wildfires, but hurricane and flood damage deductions, which tend to be a problem in Republican states, would remain intact, according to the New York Times.

“I would like to think that this isn’t directly aimed at California, but it’s hard not to think that Congress has their sights set on the Golden State,” Bay Area State Senator Mike McGuire, told the New York Times. “No matter if it’s an earthquake, a wildfire or a hurricane, families should be able to deduct the damage.”

This week, Gov. Jerry Brown and New York Gov. Andrew Cuomo held a press conference accusing Congressional Republicans of selectively punishing their left-leaning states.

“It’s using a handful of states to finance the tax cuts for their states,” said Cuomo.

Brown called the tax plan “a gross manipulation of our tax code.”

Unlike their East Coast GOP counterparts who voted against moving forward with the tax plan until they could negotiate concessions, California’s Republicans voted with the majority to move ahead with the overhaul. That may be because House Majority Leader Kevin McCarthy of Bakersfield has championed the bill while demanding party loyalty to ensure that Republicans pass a major piece of legislation while controlling all branches of government.

“I expect all, or nearly all, of them to support the measure regardless of the deductibility of state and local taxes,” former California Republican Party Chairman Ron Nehring told the Los Angeles Times. “That is a tribute to Kevin McCarthy’s skill and influence.”

McCarthy has been defending the bill in a series of media appearances. "Look, we are cutting rates. We're not raising rates. So, this is a tax cut,” he said on “Face The Nation.” “It is a fact that the first $55,000 you earn for a family of four will not pay any tax. So, it is a tax cut for the middle class."

Across the aisle, the Democrats are ratcheting up the pressure on vulnerable Republicans such as Issa.

“We would hope our colleagues would use their numbers — 14 — to influence the Republican leadership to take this out of the bill. Short of that, we indict them for causing great harm to their constituents,” House Minority Leader Nancy Pelosi (D-San Francisco) told the Los Angeles Times. “Are they so weak that 14 of them could not weigh in and say this is just not right for the future of our country?”

Photo: Rep. Darryll Issa (R-CA)(Photo by Chip Somodevilla/Getty Images)