Legislation has been proposed by congressmen and U.S. senators from New York that would repeal SALT, the limit on deducting state and local taxes from federal tax returns.
Senate Majority Leader Charles Schumer and Sen. Kirsten Gillibrand introduced legislation in the Senate and Rep. Mondaire Jones joined with Rep. Tom Suozzi to introduce a bill in the House of Representatives. All are Democrats.
Other original co-sponsors of the House legislation include Rep. Brad Schneider (D-IL), Rep. Young Kim (R-CA), Rep. Josh Gottheimer (D-NJ), Rep. Chris Smith (R-NJ), and Rep. Andrew Garbarino (R-NY). Senators from New Jersey, Illinois and Oregon have joined to co-sponsor the Senate version.
The $10,000 cap on the state and local tax deduction that had been put into effect in 2017 by the Republican-controlled Congress and Trump administration would be repealed beginning with the 2021 tax year if the legislation becomes law.
was attended by other elected officials.
According to Schumer and Gillibrand, before the SALT cap went into effect, taxpayers who itemized deductions on their federal income tax returns could deduct state and local real estate and personal property taxes, as well as either income taxes or general sales taxes. State and local income and real estate taxes had made up approximately 60% of local and state tax deductions while sales tax and personal property taxes made up the remainder.
Jones hosted a news conference in White Plains on Jan. 29 to discuss the moves while Schumer and Gillibrand issued a joint statement in Washington.
“The cap is costing this community tens-of-thousands of dollars they could be using amid the (Covid) crisis,” Schumer said, with Gillibrand adding, “The reinstating of the SALT deduction will ensure that New York families have more money in their pockets, get much-needed tax relief and will once again be treated fairly.”
Jones said, “Donald Trump cut taxes for billionaires and big corporations and paid for it on the backs of hardworking families in Westchester and Rockland counties, where we pay the highest property taxes in the entire nation. That must change. Restoring the SALT deduction is a necessary first step to creating an equitable tax system.”
The legislation is expected to readily pass in the House where Democrats hold a relatively comfortable majority. The story in the Senate may be different where a 50-50 vote along party lines is possible with Vice President Kamala Harris being called upon to cast the tie-breaking vote.
