A group of powerful Democrat governors is pressuring President Joe Biden to remove a cap on state and local tax deductions, known as SALT. New York Gov. Andrew Cuomo, California Gov. Gavin Newsom, and five other governors wrote to Biden on Friday praising his administration for steps its taken so far, including the $1.9 trillion COVID-19 relief package it was able to ram through Congress.
"We applaud those efforts to help our citizens. But we must go further and undo the cap placed on State and Local Tax deductions by the Trump Administration through the Tax Cuts and Jobs Act in 2017," the group said.
Former President Donald Trump signed into law a tax cut bill in the first year of his administration that capped the itemized deduction for state and local taxes to $5,000 for a married person filing a separate return and $10,000 for all other tax filers.
The attorneys general for New York, New Jersey, Maryland, and Connecticut sued the Trump administration, arguing that the SALT cap was unconstitutional because it pressured the states to change their tax policies.
"In short, middle-class Americans are struggling under this federal tax burden, while corporations-which are still able to fully deduct SALT as business expenses-are profiting because of the same law. The negative impacts of the SALT cap on middle class families are particularly egregious when you consider that in the states most affected by this cap, the federal government already takes more in federal taxes than the states receive in federal support, effectively subsidizing federal payments to other states," the governors wrote, urging Biden to immediately repeal the provision.
The state and local tax limit "Raised marginal rates for a lot of folks at the top," Garrett Watson, senior policy analyst at the Tax Foundation, a nonpartisan tax policy group, told The Epoch Times in a previous interview.
House Speaker Nancy Pelosi said during a press call on Thursday that she supports adding a SALT cap repeal into an upcoming piece of legislation, saying the limits were "Devastating to the state of California."
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Sunday, April 4, 2021
Democrat Governors Push Biden to Remove Cap on SALT Tax Deductions
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