WASHINGTON — Senate Majority Leader Mitch McConnell says Chuck Schumer’s move to kill the $10,000 federal cap on state and local taxes is nothing more than a tax break for “millionaires who live in Brooklyn.”
“I am sorry to break it to my Democratic colleagues, but the middle-class Kentuckians I represent have zero interest in cross-subsidizing the tax bills of millionaires who live in Brooklyn and the Bay Area,” McConnell said from the Senate floor Wednesday.
The Kentucky Republican also called it “downright comical” that the Democrats were “helping wealthy people in blue states find loopholes to pay even less.”
Minority Leader Schumer plans to force a floor vote Wednesday on a Senate resolution that would kill an IRS rule from June that banned charitable contributions to state and local governments in exchange for tax write-offs.
The charity swaps were being used by high-tax states like New York to get around the $10,000 federal cap that limited how much taxpayers could deduct of their state and local taxes. The $10,000 cap was part of President Trump’s December 2017 tax package. Democrats have long said it unfairly hurt high-tax blue states like New York and California.
Schumer argued that repealing the rule isn’t a handout to the rich.
“It hurts so many people in New York, who are middle class, not wealthy,” he said in a floor speech Tuesday. He also said the IRS rule was so broad that it meddled with state charitable credits, which impacted charities in red states too.
The New York Democrat is using the Congressional Review Act, which gives even the minority party the ability to undo an administration’s rule within 90 days of it being issued. The deadline to nix the IRS rule is next week.
A floor vote is scheduled for Wednesday afternoon.