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The U.S. House passed legislation Wednesday to prevent D.C. from opting out of Trump administration tax cuts that District leaders warn could blow a $600 million hole in its spending plan.
The vote on the Republican bill was divided along party lines, 215-210.
The congressional action follows a vote last year by the D.C. Council, which decoupled the city from President Donald Trump’s tax cuts.
D.C. leaders note that similar action has been taken by several states in an effort to maintain revenue.
“Congress has never overturned a revenue-raising law for D.C.,” D.C. Del. Eleanor Holmes Norton said. “Doing so would be a reckless escalation with real and lasting consequences.
The action by the council was taken to allow the District to spend at least $600 million in local revenue through 2029.
D.C. officials said the congressional action threatens to upend the filing of local taxes, since the District had already prepared paperwork for people to file.
Norton said it “will sow chaos in the middle of tax filing season.”
“It is sabotage and the damage could be severe and intentional,” she said this week, ahead of Wednesday’s vote.
The District has planned to use part of the funds it expected to receive by opting out of the federal tax cuts to expand the local child tax credit and the Earned Income Tax Credit.
Republicans say DC action hurts taxpayers
House Speaker Mike Johnson is among the Republicans who criticized D.C. for not including all the provisions of the tax cuts included in the president’s “One Big Beautiful Bill” that Congress passed last year.
“If this act were to become local law, D.C. residents would be prevented from claiming no tax on tips, no tax on overtime, the increased standard deduction and so much more,” Johnson said. “It’s just wrong.”
Rep. Brandon Gill, a Republican who represents the 26th District in Texas, is the sponsor of the legislation.
“The D.C. Council would rather punish their own residents, their own people, than recognize the achievements of President Trump’s legislation,” Gill said Wednesday on the House floor.
Norton on the floor on Wednesday called the measure “paternalistic.”
“The D.C. law changed only the D.C. tax code,” Norton said. “It did not and could not change the federal tax code.”
Rep. Maxwell Frost, a Democrat who represents Florida’s 10th District, said states that have decoupled from provisions of the tax cuts include Virginia, Pennsylvania, Michigan, Maine, Colorado and Alabama.
The U.S. Senate is also considering a GOP bill that would block D.C. from decoupling from the federal tax cuts.
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