Bipartisan House Bill Aims To Restore Full SALT Deduction
Two New York Congress members have introduced a bipartisan bill to restore the SALT, or state and local tax deduction. The federal tax legislation President Trump signed last month curtails the deduction that many depend on in high-tax states like New York.
Congresswoman Nita Lowey, ranking Democrat on the House Appropriations Committee, says The Securing Access to Lower Taxes by Ensuring Deductibility Act, or SALT Deductibility Act, would repeal the $10,000 limit on the SALT deduction, providing tax relief for millions of families who rely on it.
“I want to make it clear: This is a big deal for my constituents in Westchester and Rockland Counties,” Lowey says.
Lowey says the cap on SALT deductions is all she hears about from her constituents.
“My phone is ringing off the hook. We’re getting emails, letters, meetings. People are furious,” says Lowey. “They are, again, they’re hardworking people. They’re nurses, they are firefighters, they’re policeman. This is a major, major problem for people. Some are talking about leaving. They’re talking about people who are saying they’re selling their house. The real estate market is in terrible shape. People say, ‘I’m going to move to a state where there are no taxes.”
Republican Long Island Congressman Peter King, who is co-sponsoring the SALT Deductibility Act, says, he too, gets an earful.
“I would say this is probably the only issue that I’m hearing about other than general issues that you always hear about, but this is the most intense,” says King. “Everywhere I go, people bring it up.”
Lowey and King together represent portions of the three counties with the highest property taxes in New York - Westchester, Rockland and Nassau. Lowey represents all of Rockland. Lowey says the former SALT deduction was a major source of tax fairness for high-taxed states like New York, where 35 percent of taxpayers deduct an average of more than $22,000 every year. Lowey says the rate in her 17th District, is even higher, with 45 percent of taxpayers relying on the state and local tax deduction at an average of $26,000. Lowey says the new tax law raises taxes on millions of middle-class Americans.
“As donor states, we agree that the federal government should be in the business of finding tax relief for our constituents, not more burdens for New York families,” Lowey says.
“It’s really essential that we do all we can to restore this,” says King. “And, as Nita pointed out, there’s a real inequity here.”
Republican House Speaker Paul Ryan disagrees. He says the more than $2,000 tax cut for an average family of four earning the median income is a big help as are lower tax rates across the board. In response to the SALT deduction cap, he has said that doubling the standard deduction will help the average taxpayer.
King admits the bill that was introduced Monday faces a tough road, but he believes there will be opportune times to garner support.
“And I will do all I can, working with members from other states like California and New Jersey, Massachusetts, Maryland, all of whom get hurt by it to one extent to the other,” says King. “And, again, it’s not going to be easy and it’s going to be a long fight, but, again, there will have to be, I’m sure, corrections made to the tax bill that was passed. We can use those moments as opportunities to go forward with this. Other times when there’s discussion to where our votes are needed, we can come together on this. But, in any event, it’s a fight that has to be continued.”
Lowey and King said many taxpayers in their districts lined up in late December to prepay their property taxes, with the hope of applying the then unlimited SALT deduction to prepayments. Lowey says she sent a letter to the IRS about allowing pre-payment deductions.
Democratic New York Governor Andrew Cuomo, who has continuously railed against what he calls Washington’s direct attack on New York’s economy, praised Lowey and King for putting partisanship aside and New York first.