Democrats seek sweet spot for ‘SALT’ deduction
A compromise without a full repeal appears to be the direction Democrats are taking, according to lawmakers and their aides. They could lose two House Democrats – Tom Suozzi of New York and Josh Gottheimer of New Jersey – who have taken a hard line. But more limited SALT relief is seen as satisfying enough to lawmakers to avoid sinking the larger bill.
New Jersey Rep Bill Pascrell Jr., who joined Suozzi and Gottheimer earlier this year to pledge “No salt, no deal,” said in a brief interview that he was prepared to accept a less than complete repeal. “I wanted to say that I had put [the cap] at around $ 25,000. But I’ll be content [$20,000],” he said.
Support for the SALT deduction has always been more regional than ideological.
Leading Democrats such as Senate Majority Leader Charles E. Schumer of New York and President Nancy Pelosi of California support repealing the cap because it would benefit their constituents. But they’re also aware of concerns from Democrats in low-tax states that the deduction, which can only be claimed by taxpayers who detail, helps wealthy households the most.
A 2019 Joint Committee on Taxation report predicted that 94% of the benefits of repealing the SALT cap that year would go to taxpayers earning $ 100,000 or more. But about a third of the returns claiming the deduction would be from households in the $ 100,000 to $ 200,000 range, the JCT found. In states like New York, New Jersey and California, where the cost of living is higher, these are middle income people.