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ICYMI: Tax Plan Burdens Blue-State Republicans and Their Districts [New York Times]

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Tax Plan Burdens Blue-State Republicans and Their Districts
New York Times
https://www.nytimes.com/2017/11/05/us/tax-bill-blue-state.html?_r=0

Steve Schwartz looks like a voter who might swoon for the Republican tax plan, unveiled last week in Washington. He is a political independent who owns a company that makes windshield wipers, he describes himself as leaning “right on fiscal matters,” and he said he would benefit from the elimination or scaling-back of the estate tax.

But Mr. Schwartz, 72, said he is deeply wary of the House bill. “I’m not happy,” he said, “if they take away New Jersey’s deductions.”

In the dense suburbs of northern New Jersey, where property values are high and local taxes keep climbing, Mr. Schwartz has ample company in his unease. It is in places like West Caldwell, in New Jersey’s 11th Congressional District, where Republicans are facing the most furious internal resistance in their drive to overhauling the tax code — and the greatest political risks if they succeed.

Indeed, Republican proposals to raise revenue by targeting high-tax states dominated by Democrats could endanger Republicans in districts like this one, particularly in states like New Jersey, New York and California, perhaps putting the party’s majority in Congress in peril.

The 11th District, a Republican-leaning hodgepodge of quaintly verdant residential streets, snarling highways and big-box shopping centers, groans under an extraordinary tax burden. To voters here, a range of federal tax write-offs are nearly sacrosanct, none more so than deductions for state and local taxes. The House tax bill would undo or sharply limit all of them.

[…] The potential backlash for suburban Republicans is significant. While the party’s base is mainly rural and culturally conservative, a small group of solidly Democratic states with complex local tax codes could, in theory, nearly cost Republicans control of the House. In New Jersey alone, there are as many as five Republican-held districts where the tax plan is likely to be unpopular; add in those in New York and California and the number approaches 20. To gain a majority, Democrats must take two dozen seats away from the G.O.P., and they have already been hungrily eyeing the educated suburbs where President Trump is unpopular.

[…] In California, another state likely to be hit especially hard by the tax proposals, Republicans have been more supportive of the House bill, a dynamic that lawmakers attribute to the influence of Representative Kevin McCarthy, a California Republican who is the House majority leader.

But key blue-state Republicans face an agonizing balancing act, weighing their ambition to deliver broad tax cuts with the narrower interests of their districts. Where most Republicans take it as an article of faith that passing a tax bill would buoy the party in 2018, lawmakers in these areas worry that a law burdening the suburbs would doom them.

In New Jersey’s 11th District, Representative Rodney Frelinghuysen already figured to face a stiff challenge in 2018 before the vote to approve consideration of the tax legislation, an important procedural step. He was one of few Republicans from the Northeast to vote in favor, and the only one from New Jersey. His vote did not sit well in his district, an affluent and well-educated area where the average household income is more than $100,000 a year.

[…] An aide to Mr. Frelinghuysen did not respond to a request for an interview. But Mr. Frelinghuysen, who chairs the powerful Appropriations Committee, has emerged as something of a bellwether figure in New Jersey. Though he is viewed locally as a moderate, Mr. Frelinghuysen has taken a series of perilous votes to back the agenda of Republican leaders, supporting both the tax plan and an unpopular bill to repeal the Affordable Care Act.

Mr. Frelinghuysen, who has served in Congress since 1994, is facing his first concerted challenge in years after his district favored Hillary Clinton over Mr. Trump in 2016. Democratic Party polling has found the tax issue to be a potent one in districts like his, with voters inclined to view it as a giveaway to the extremely wealthy, according to a strategist who advises House Democrats and was briefed on the polling.

Mikie Sherrill, a lawyer and former helicopter pilot who has emerged as the most formidable of Mr. Frelinghuysen’s potential Democratic opponents, quickly seized on the tax plan to brand the incumbent as out of touch.

Describing the bill as a “gut punch” to the district, Ms. Sherrill stressed that New Jersey taxpayers would not benefit from the legislation in the same way as people in redder states, where local tax deductions are less valuable.

“I don’t think we are going to feel it here in New Jersey as a tax-cut bill,” she said of the House plan. “Being middle class in New Jersey is a little different from being middle class elsewhere, like Alabama.”

That sense of regional grievance crosses party lines, with both Republicans and Democrats in prosperous coastal areas venting frustration at the possibility that their tax burden may rise as rates fall for corporations and taxpayers in redder states. Mr. Zeldin said that would exacerbate the existing indignity that New Yorkers pay more money in federal taxes than the state gets back from Washington.

Representative Peter T. King of New York, a Republican whose district neighbors Mr. Zeldin’s, said suburban voters would punish Republicans if the current bill becomes law. He said lawmakers had appealed to members of the Trump administration who hail from the area, like Treasury Secretary Steven Mnuchin and Gary Cohn, the president’s top economic adviser, but so far to little avail.

“Maybe it’ll strengthen them in other parts of the country, but it’s going to create very real and justifiable political issues in New York and New Jersey,” Mr. King said of Republican candidates. “You’re talking about restructuring a large part of the economy of the Northeast.

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