Jan 30, 2024 - Politics & Policy

Some vulnerable Republicans look to tax deal as 2024 asset

Illustration of Uncle Sam placing a quarter in a person's outstretched hand.

Illustration: Shoshana Gordon/Axios

While some vulnerable, blue-state House Republicans are raising hell over the lack of tax relief for their constituents in the bipartisan tax bill set to be voted on this week, others see it as a key win going into the 2024 election.

Why it matters: The 118th House and its narrow GOP majority have been marked by infighting and minimal legislative productivity aside from "must-pass" measures heading off a debt default or a government shutdown.

Driving the news: The $78 billion deal between House Republicans and Senate Democrats is set to be voted as soon as Tuesday under a process that requires it to receive a two-thirds majority to pass.

  • The deal would expand the Child Tax Credit to lower-income families, allow companies to deduct research and development costs, boost tax incentives for low-income housing and end a pandemic-era tax incentive for retaining employees.
  • It's a rare bipartisan deal in a Congress that has been bereft of them.

The latest: Some Republicans in high-tax blue states, many of whom represent districts President Biden won, are vowing to vote against the bill because it doesn't raise the cap on the state and local tax deduction, or SALT.

  • Rep. Anthony D'Esposito (R-N.Y.) "is a 'no' on the tax bill without SALT provisions," his office told Axios.
  • The anger at the lack of SALT is so profound that it has touched off an effort to oust Ways and Means Committee Chair Jason Smith (R-Mo.), one of the architects of the deal, Axios' Juliegrace Brufke reported.

Yes, but: Not every vulnerable Republican opposes the bill. "I love it," Biden-district Rep. Don Bacon (R-Neb.) told Axios. "Good policy is good politics."

  • Another swing-district Republican told Axios on the condition of anonymity that they are "supportive" of the bill, despite their district benefiting from SALT, in part because of its other deliverables and as a demonstration that House Republicans can govern.
  • Rep. John Duarte (R-Calif.), another Biden-district Republican, told Axios, "The bipartisan tax agreement is very important. The R&D treatments, the bonus depreciation – we need this stimulus now."
  • "This is helping grow wages across the economy. Joe Biden says he's for the middle class, this is where he shows it or fails it," Duarte added.

The intrigue: Even some Republicans who have criticized the lack of SALT in the bill are weighing voting for it.

  • "I have been saying for a while I will be voting against any tax package that doesn't address SALT," said Rep. Mike Garcia (R-Calif.) – but, he added, he is "officially undecided" because "I like elements of the bill."
  • Garcia said he can see himself touting the tax package on the campaign trail despite the lack of SALT relief, telling Axios, "every day we try to communicate the progress that we're making but also the handicaps that we have in this very thin majority."
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