Yahoo Finance Schumer Leads New Push to Repeal SALT Cap
Senate Majority Leader Chuck Schumer (D-NY) and a bipartisan group of blue-state lawmakers introduced legislation on Friday to repeal the $10,000 cap on state and local tax deductions created under the 2017 Republican tax law. Their proposal would restore taxpayers’ ability to write off the full amount of their state a local taxes, a change that would be of particular benefit to residents of high-tax states like California and New York.
“When it comes to SALT, New York families needed and deserved this money before the coronavirus took hold, the stakes are even higher now because the cap is costing this community tens-of-thousands of dollars they could be using amid the crisis,” Schumer said in a statement. “We need to bring our federal dollars back home to cushion the blow this virus—and this harmful SALT cap—has dealt so many homeowners and families locally.”
What it means: Democrats have made repealing the SALT cap a priority in recent years, but their efforts had been blocked in the Republican-led Senate. Now that Democrats control that chamber, too, they are hoping they can push the change through, whether as part of a coronavirus relief package or in legislation later this year. But the repeal would be costly — and would primarily benefit higher-income households. Laura Davison of Bloomberg News reports: “To allow unlimited deductions just in 2021 would cost $88.7 billion, according to the Joint Committee on Taxation, Congress’s non-partisan scorekeeper. Permanently repealing the limitation would cost many multiples of that.”
