Lawmakers offer bill to repeal cap on SALT deduction
Lawmakers in the House and Senate from high-tax, Democratic-leaning states introduced legislation on Thursday to repeal a provision in former President TrumpDonald TrumpPalm Beach reviewing Trump’s residency at Mar-a-Lago Immigration reform can’t wait On The Money: Five questions about the GameStop controversy | Biden, Yellen call for swift action on new aid MORE‘s 2017 tax cut law that limits the state and local tax (SALT) deduction.
The bill’s introduction comes amid a push from a number of blue-state lawmakers for a rollback of the cap to be included in coronavirus relief legislation.
“The full SALT deduction must be restored,” Rep. Thomas Suozzi (D-N.Y.), the lead sponsor of the House version of the bill. “Without the full SALT deduction, families will leave New York and the last thing we need in the midst of the health and economic devastation of COVID-19 is to lose our residents and taxpayers. Congress must act immediately.”
Suozzi’s bill is co-sponsored by six lawmakers from high-tax states, including Republicans Chris SmithChristopher (Chris) Henry SmithLawmakers offer bill to repeal cap on SALT deduction New Jersey lawmakers press for SALT cap repeal in next relief package Democrats were united on top issues this Congress — but will it hold? MORE (N.J.), Andrew Garbarino (N.Y.) and Young Kim (Calif.).
Senate Majority Leader Charles SchumerChuck SchumerImmigration reform can’t wait Psaki expects DHS nominee Mayorkas to head task force to reunite separated families Biden DHS pick advances in Senate, clearing Republican hurdle MORE (D-N.Y.) introduced a version of the bill in the Senate, which is co-sponsored by Democratic senators from New York, New Jersey and Illinois, along with incoming Senate Finance Committee Chairman Ron WydenRonald (Ron) Lee WydenHillicon Valley: Fallout from Reddit-driven stock rallies, GameStop purchase ban continues | Lawmakers grill NSA on years-old breach in the wake of massive Russian hack | Facebook reportedly considering antitrust lawsuit against Apple Lawmakers grill NSA on years-old breach in the wake of massive Russian hack Lawmakers offer bill to repeal cap on SALT deduction MORE (D-Ore.).
The 2017 tax law capped the SALT deduction at $10,000. Politicians from high-tax states have been opposed to the cap, arguing it hurts their residents and limits their states’ abilities to provide robust public services. But Republicans, as well as some left-leaning tax experts, are defending the cap on the deduction, saying that repealing it would primarily benefit high-income taxpayers.
The House passed two coronavirus relief bills last year that included a temporary repeal of the SALT deduction cap, but those weren’t taken up by the Senate. The New Jersey House delegation on Wednesday urged congressional leaders and the Biden administration to include repeal in the next relief package.
It could be challenging for lawmakers to get a repeal of the cap included in a relief package this year, since Republicans and some centrist Democrats want to limit the price tag of a stimulus measure.
Repeal of the SALT deduction cap was not included in a $1.9 trillion proposal floated by President Biden. Treasury Secretary Janet YellenJanet Louise YellenOn The Money: Five questions about the GameStop controversy | Biden, Yellen call for swift action on new aid Lawmakers offer bill to repeal cap on SALT deduction Biden, Yellen call for swift action on coronavirus relief package MORE said during her confirmation hearing that she wants the department to study the impact of the cap on state and local governments before taking a position on the cap.