The House Committee on Ways and Means passed legislation introduced by US Reps Tom Suozzi (D-Glen Cove) and Peter King (R-Seaford) to double the state and local tax deduction (“SALT”).
Suozzi and King’s colleagues from Long Island Congresswoman Kathleen Rice (D-NY-04), Congressman Gregory Meeks (D-NY-05) are cosponsors of this legislation, as well as more than 40 other bipartisan cosponsors.
This legislation would eliminate the marriage penalty by doubling the cap to $20,000 for joint filers for 2019 and would fully restore the state and local tax (SALT) deduction for 2020 and 2021. The cost of this plan would be fully offset by returning the top individual tax rate from 37 percent, back to 39.6 percent, prior to the GOP tax bill of 2017.
The bill, which has more than 40 bipartisan cosponsors in the House and passed through the House Ways and Means Committee by a vote of 24 – 17 (with Republican yes vote), is a concrete step in repealing a provision of the 2017 GOP tax law that placed a devastating cap on state and local tax deductions. The limitation of this critical deduction has resulted in a tax increase for families across Long Island.
“In the midst of all the battles in Washington, DC, I know that my constituents on Long Island want tax fairness. The 2017 cap on SALT broke a century-old agreement. A covenant to protect state and local government and my bill restores that protection, it restores that covenant, and it restores fairness as well,” said Suozzi. “I thank Chairman Neal and the Ways and Means Committee for passing my bipartisan legislation and I hope it will be passed by the House of Representatives in short order.”
The capping of the SALT deduction was unfair to Long Island because:
•New Yorkers already subsidize other states by paying $48 billion more in taxes than they receive back from the federal government, more than any other state.
•The repeal of the SALT deduction results in double taxation by imposing a federal tax income which already paid for state and local taxes.
•State and local governments are being penalized – the creation of the SALT deduction was coupled with the creation of a federal income tax in 1913. When the 16th amendment was ratified, lawmakers at the time did not think it was fair for Americans to pay taxes on taxes.
•The elimination of the deduction drives people to other states and leaves middle- and lower-income taxpayers hold ing the bag to pay for school, police and other essential state and local tax burdens.
“Eliminating deductions for local and state taxes will have a devastating effect on New York. We give far more to Washington then we get back. For every dollar we give, we get $.79 back. That’s a $48 billion shortfall and hurts our middle-class Long Islanders. This legislation is critical,” said Rep. King.
“Before the tax bill, more than half of my constituents deducted their state and local taxes for an average of $23,000 a year,” said Rep. Rice. “The President's cap on those deductions has devastated my community and it’s past time that Congress take action to right this wrong. I'm proud to support this bipartisan bill, which would finally provide much-needed relief to middle class and is critical,” said Rep. King.
The Restoring Tax Fairness for States and Localities Act has already been endorsed by several organizations including:
• US Conference of Mayors;
• National Association of Counties;
• National League of Cities;
• International Association of
• National Association of Realtors;
• American Federation of Teachers