Photographer: Craig Warga/Bloomberg

Realtors, Teachers Jump in Fight for $1.8 Trillion Tax Break

  • Coalition launched to preserve state and local tax deduction
  • New details of tax overhaul could emerge as soon as next week

The National Association of Realtors and the American Federation of Teachers have joined a coalition to preserve a federal tax deduction for the state and local taxes that individuals pay, according to a Thursday release announcing the group.

That coalition, Americans Against Double Taxation, also includes groups of state and local officials and is the latest organization to mobilize in what could be a fierce battle to preserve loopholes, deductions and other benefits if they’re targeted in tax overhaul legislation this year. The Realtors’ group, which is also fighting to keep the mortgage-interest deduction, is one of Washington’s top spenders on lobbying.

“Repealing the deduction for state and local taxes is very bad news,” Evan Liddiard, director of tax policy for NAR, said in a call with reporters.

Congressional Republican leaders and officials in President Donald Trump’s administration have said they’ll release next week a framework for tax legislation -- though it’s unclear how detailed that document will be. Trump and his economic advisers have proposed ending the state and local deduction as a way to raise revenue to offset their proposed tax cuts, such as slashing the corporate rate from its current 35 percent to 15 percent.

Eliminating the deduction would raise federal tax revenue by $1.8 trillion over the next decade, the Tax Foundation, a Washington policy group, has said.

The state and local deduction, which is more than a century old, “has helped support vital investments in infrastructure, public safety, home ownership and education and provided states and local governments with the financial flexibility to meet the needs of their constituents,” the coalition said in the release.

Letter to Congress

The group outlined its support for the deduction in a letter to congressional tax-writers dated Thursday. Bob Chlopak, who is managing the coalition, said it will focus on building broad support from a range of groups.

“We are very aggressively taking this message to states and cities and counties, and to school boards and real estate organizations across the country,” Chlopak said on the call. “We believe we have the potential of a large army.”

Tom Cochran, executive director of the U.S. Conference of Mayors, which is also part of the group, said “the pressure will come from the hinterland across this nation.”

The 21-member coalition says it will also include the National League of Cities, the National Governors Association, the Government Finance Officers Association and National Sheriffs’ Association, among others. A coalition with many of the same members beat back an effort to end the deduction during President Ronald Reagan’s 1986 tax-overhaul efforts, the group said.

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