SALT healthy for N.Y.: pols
State’s lawmakers aim to double federal tax deduction
Members of New York’s congressional delegation are aiming to double the state and local tax deduction as the House finalizes a broader tax bill that would restore the child tax credit.
A group of suburban New York Republicans say they won the backing of House Speaker Mike Johnson (R-La.) to allow a separate vote on a bill to raise the so-called SALT deduction to $20,000 for married couples who file jointly.
Rep. Mike Lawler (R-N.Y.), whose district includes all or parts of Westchester, Rockland, Putnam and Dutchess counties, says his SALT Marriage Penalty Elimination Act would ease the burden of taxpayers in the New York suburbs and beyond, although he insists the ultimate goal would be to restore the unlimited deduction.
The prospects for passage in the House remained unclear as the body was expected to vote on the tax legislation Wednesday night. Many right-wing Republicans and some progressive Democrats oppose raising the cap because they say it’s mostly a boon to high earners from high-tax blue states like New York, New Jersey and California.
But advocates on both sides of the aisle say the deduction mostly benefits middle-class homeowners who should not be forced to pay tax twice on the same income and property taxes.
The SALT deduction was capped at $10,000 as part of former President Donald Trump’s sweeping 2017 tax cut bill, which Democrats deride as mostly a giveaway to the wealthy and big corporations.
Since then, members of both parties from the New York area have pushed to raise the cap or restore the deduction entirely, while pointing fingers at one another along the way.
The deal to seek a path forward for the SALT bill came as the House seemed poised to pass a $78 billion bipartisan tax bill that would partially restore the child tax credit that was allowed to expire after the COVID-19 pandemic eased. It would also restore a low-income housing tax break and some exemptions for research and development and capital expenses for businesses that had expired.
“The Tax Relief for American Families and Workers Act is important bipartisan legislation to revive conservative pro-growth tax reform,” Johnson said in a statement.
The compromise appeared to be on a glide path through the House after winning near-unanimous approval in the powerful Ways and Means Committee.
But it’s far from a sure thing that it will pass the Senate, and any tinkering with the carefully crafted deal could lead it to collapse, pols said.
Pro-SALT lawmakers originally hoped to tack the measure easing the cap onto the larger bill, but settled for winning assurances of a vote on a stand-alone bill.