A group of moderate House Democrats are considering creating a new minimum tax on high-income households in exchange for suspending a $10,000 cap on state and local tax deductions imposed during the Trump administration, The Washington Post reports.
"The cap on the SALT deduction remains a punishing blow to our home states of New York and New Jersey as we work to recover from the pandemic and get our economies on strong footing and our constituents back to work," Democratic Reps. Tom Suozzi of New York and Josh Gottheimer and Mikie Sherrill of New Jersey said in a statement Tuesday.
"Today’s news is encouraging for a SALT cap repeal to be included in the final reconciliation package," they continued, according to CNBC. "We will continue to work with House and Senate leadership to ensure the cap on the SALT deduction is repealed. No SALT, no deal."
The SALT cap has faced criticism from Democrats, Republicans and independents who say that the rule prevents Americans from saving possibly hundreds of thousands of dollars on their taxes, and that repealing it would help high-income individuals in high-tax states like New York and New Jersey.
Gottheimer has previously said that if President Joe Biden’s Build Back Better package doesn’t repeal the SALT cap, then he won’t vote for the legislation.
Steve Wamhoff, an expert on taxes with the Institute on Taxation and Economic Policy, said that "the majority of benefits from repealing the SALT cap just go to the 1 percent. If BBB [the Build Back Better legislation] is amended to include that, we could be looking at a bill that cuts taxes for a lot of rich people — which is the opposite of what we’ve been led to expect."
Sen. Bernie Sanders, I-Vt., who chairs the Senate Budget Committee, released a statement opposing repealing the SALT cap for high-income earners, saying that nonpartisan estimates found that a full repeal would cost the government about $475 billion and grant the richest 5 percent of people in the country an additional $400 billion.
"At a time of massive income and wealth inequality, the last thing we should be doing is giving more tax breaks to the very rich. Democrats campaigned and won on an agenda that demands that the very wealthy finally pay their fair share, not one that gives them more tax breaks," Sanders said in a statement, according to CBS News. "I am open to a compromise approach which protects the middle class in high tax states. I will not support more tax breaks for billionaires."
© 2022 Newsmax. All rights reserved.