Tax reform has long been a legislative priority for U.S. Rep. John Katko. And he believes that's exactly what Congress achieved with passage of a $1.5 trillion plan that reduces income tax rates for most Americans and slashes the corporate tax rate.
Katko, R-Camillus, was one of 227 House Republicans who voted for the bill Tuesday. The House needed to vote again after some provisions were stripped from the legislation to allow for the Senate to pass it early Wednesday.
Katko's position on the bill didn't change from when the House passed its own tax proposal. He voted for that measure, too, because he believed it would benefit his constituents.
With U.S. Rep. John Katko's support, the House of Representatives passed a $1.5 trillion tax…
The same is true for the final tax agreement passed this week. He thinks the conference committee report, which was negotiated after the House and Senate approved separate bills, is "even a little bit better" than the House bill he voted for in mid-November.
"It provides tax relief for the vast majority of my constituents, especially the working poor and the middle class in particular," Katko said in a phone interview Tuesday. "But it also provides everyone more job opportunities in central New York and lord knows after 20 years of the out-migration of jobs this may be something we can try to turn that around. I think it has a good chance to do so."
Katko said he played an active role in encouraging congressional leaders to restore certain credits or deductions that others want to eliminate in the GOP plans. Before a final agreement was reached, the House and Senate bills called for the elimination of most credits, deductions and exemptions. They justified their proposals by doubling the standard deduction for single filers and married couples.
One provision on the chopping block was the state and local tax deduction. While most taxpayers accept the standard deduction, those who itemize take advantage of the ability to deduct state and local taxes, especially residents in New York and other high-tax states.
New York Republicans, including Katko, advocated for a compromise in the House bill: Keep the state and local tax deduction, but for up to $10,000 of state and local property taxes. Income and sales taxes would be excluded.
The provision was added to the Senate bill, too. When House and Senate negotiators reached an agreement on the final tax bill, they opted to keep the deduction for state and local income, property and sales taxes, but cap it at $10,000.
Nearly 30 percent of residents in Katko's district, which includes all of Cayuga and Onondaga counties, deduct state and local taxes.
"It's a good deal for my district," he said. "A lot of my colleagues in New York state who voted against it are downstaters where they have ridiculous property values and ridiculous property taxes. So it's a different ballgame for them and I understand where they're coming from. For my constituents, we don't have that issue for the vast majority of them. I am pleased with how this worked out for my constituents."
Katko also took credit for lobbying to restore the historic preservation tax credit and tax-exempt status for private activity bonds, which the House GOP wanted to eliminate. The final bill kept tax-exempt status for the bonds, which help fund infrastructure projects, and modified the historic tax credit so that the benefits will be paid out over a five-year period instead of in one year.
Another provision in the House bill that would have a significant impact on central New Yorkers was a plan to calculate tuition waivers for graduate students as taxable income. Graduate students who receive free or reduced tuition for their research or teaching work would have been forced to pay thousands of dollars more in taxes.
The plan was criticized by graduate students at Syracuse University and other central New York institutions. Katko heard from university presidents about the issue. Other central New Yorkers contacted him about other provisions. For example, Syracuse Mayor-elect Ben Walsh urged Katko to restore the historic preservation tax credit.
"They said it was a high priority, so I made it a high priority for me," he said. "I went in and I just argued every day for it. I literally every single day was talking to them about it and they finally aw the light and got those back in and it worked out great."
Katko views the tax bill as good for business. The legislation will lower the corporate tax rate from 35 to 21 percent beginning in 2018.
When he met with central New York business leaders last month, lowering the corporate tax was one of the ideas they wanted to see in the final tax plan. He thinks lowering the corporate tax rate will "level the playing field" for American companies.
"We just went from having one of the highest tax rates for businesses in the industrialized world to one of the best," he said.
Anne Messenger considers it one of U.S. Rep. John Katko's worst votes. Dana Balter called it…
The final tax bill includes a controversial provision to eliminate the Affordable Care Act's individual mandate. The House bill Katko supported in November didn't include the proposal, but the Senate pushed for the repeal.
The individual mandate requires people to buy health insurance or pay a financial penalty. Under the tax bill, the mandate will not be repealed until 2019.
Katko, who wants to repeal and replace the Affordable Care Act, supported the elimination of the individual mandate.
"I don't think there is a time or a place where we should impose mandates on people where basically, if they don't do something that is strictly a voluntary thing like get insurance, they are going to be penalized for it," he said. "I just don't think we should do that. I've voted that way in the past and my vote on this bill is consistent with that."
Since taxes became the top priority for Congress, Katko has heard the critics of the proposal. On Tuesday, two of his potential Democratic opponents, Dana Balter and Anne Messenger, slammed his decision to support the tax plan.
Balter, D-Syracuse, singled out several provisions in the bill, including the elimination of the individual mandate. She said ending the requirement will hurt the health insurance market and raise premiums.
"As a constituent, I'm incredibly disappointed he is voting for this," she said.
New York Gov. Andrew Cuomo has repeatedly railed against the GOP tax plan. He believes the changes to the state and local tax deduction will be a blow to the state's finances.
Cuomo, a Democrat, has targeted Republicans who support the bill. He has referred to Katko and his colleagues as traitors.
Katko has seen the comments, but declined to engage in a back-and-forth with the governor.
"I don't think it's productive and I'm not going to now," he said. "I just want to engage in what's best for my constituents."
There are some parts of the tax bill Katko doesn't like. One example he mentioned is the state and local tax deduction. He wishes they could have preserved the deduction in its current form.
But he believes the compromise on that issue and the whole bill will benefit taxpayers.
"It's simplified, it's fair and it's going to help my constituents," he said.