The nugget., December 20, 2017, Page 10, Image 10

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Wednesday, December 20, 2017 The Nugget Newspaper, Sisters, Oregon
Walden says new tax overhaul preserves key deductions
By Mike Rogoway
The Oregonian/OregonLive
PORTLAND (AP) —
Oregon Congressman Greg
Walden’s office says a new
version of the Republican tax
overhaul before Congress will
preserve some key tax deduc-
tions that Oregonians rely on,
including a major provision
that would allow the state’s
residents to continue deduct-
ing a portion of their state
income tax.
Compared with the tax
plans that originally passed
the House and the Senate,
that change alone could be
worth hundreds of millions
of dollars to Oregonians.
Some Oregonians still may
pay higher federal taxes under
the new plan than they would
under current tax rules.
The tax bills originally
passed by the House and
Senate would have eliminated
deductions for state income
taxes. Those deductions
are especially important to
Oregonians, because the state
has an unusually high income
tax to compensate for the lack
of a state sales tax.
Oregonians deducted $8.5
billion in state and local taxes
in 2015, the most recent year
for which data is available.
Eliminating the income tax
deduction could have cost
Oregonians hundreds of mil-
lions of dollars, which would
have partially or completely
offset tax cuts in other parts
of the bill for the state’s
residents, according to tax
experts.
Justin Discigil, Walden’s
communications director, said
the Republican congressman
has been working with mem-
bers of the conference com-
mittee, which is reconciling
the House and Senate ver-
sions. He said Walden pushed
them to retain local tax deduc-
tions and other provisions
of the tax code that many
Oregonians favor.
“While we have not seen
the actual bill text yet, it is our
understanding that some of
the changes he has been push-
ing for have been worked into
the final agreement,” Discigil
said in an email.
The House and Senate bills
allowed taxpayers to deduct
up to $10,000 in local prop-
erty taxes from their federal
taxes. Discigil said Walden’s
understanding is that a revised
version of the bill emerging
from conference commit-
tee would allow deductions
of both property and income
taxes, combined, up to that
limit.
“While we do not want
to rush to judgment — and
analyze what is only a partial
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review of what we believe the
final plan will include — Rep.
Walden is encouraged that
the bill will incorporate some
of the improvements he has
worked to include,” Discigil
said.
Additionally, Discigil
said Walden believes the bill
emerging from House and
Senate negotiators makes
other changes the congress-
man had sought. Those
include:
Preserving tax-exempt pri-
vate activity bonds, which had
been eliminated in the first
House bill. State and local
governments use the bonds
to finance affordable hous-
ing and other public projects,
including roads. Housing
advocates had warned that los-
ing the bonds would exacer-
bate Oregon’s housing crisis.
Retaining a deduction for
medical expenses and student
loan interest.
Eliminating an alternative
minimum corporate tax that
was included in prior ver-
sions of the tax legislation.
Congress is planning to cut
the corporate tax rate from
35 percent to 21 percent, but
an alternative minimum tax
could have reduced the tax
savings Intel, Nike and other
large companies anticipated.
Other reports indicate the
new bill would eliminate a
proposed tax on graduate stu-
dents, which had greatly con-
cerned Oregon’s universities.
“Rep. Walden is focus-
ing on the impact of this bill
for the middle-class fam-
ily in his district, where the
median household income
is $49,000,” Discigil wrote.
“Those families will see a
significant tax break under
our plan, and that has been
Rep. Walden’s goal from the
beginning.”
Walden represents the
sprawling 2nd Congressional
District, 20 counties in central,
southern and eastern Oregon.
The tax overhaul bills
passed the House and Senate
without a single Democratic
vote in either chamber, so
the Republican majorities are
steering the process them-
selves. Walden is among the
most influential Republicans
in the House, chairing the
powerful Committee on
Energy and Commerce
Committee. He’s the only
Republican from Oregon in
Congress.
Democrats, including Gov.
Kate Brown and the rest of the
state’s congressional delega-
tion, remain firmly opposed
to the tax overhaul. They
argue that it would dispro-
portionately benefit wealthy
Americans, increase the fed-
eral deficit and reduce funds
available for social programs.
Allowing deductions
for state income taxes
would be valuable for many
Oregonians, but the $10,000
limit on income and prop-
erty taxes could still hit some
taxpayers. Reports indicate
Republicans are planning to
lower the top federal tax rate
to preserve savings for the
wealthiest taxpayers.
Some middle-income tax-
payers would no longer item-
ize their taxes under the new
legislation because the over-
haul would nearly double the
standard deduction taxpayers
can take, to $24,000 for cou-
ples. Those savings would be
partially offset by the loss of
the personal exemption and
other deductions.
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