Bipartisan Legislation Wants to Restore SALT
House of Representatives passed Congressman Tom Suozzi’s (NY-03) legislation to restore tax fairness to families on Long Island and across the United States. Suozzi’s colleagues from Long Island Congressman Peter King (NY-02), Congresswoman Kathleen Rice (NY-04), Congressman Gregory Meeks (NY-05) all cosponsored the legislation. The final vote of 218 – 206 received bipartisan support, including Republican members voting yes. The bill now moves to the Senate.
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.
“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.
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 holding the bag to pay for school, police and other essential state and local tax burdens. “The hardship caused by the limitation of the SALT deduction has been a 1 - 2 punch to our village. It has resulted in higher taxes and lower home values. Many longtime residents are rethinking whether they can afford to stay in a village that has been home many years. This is not a Republican or Democrat question. It is a question of fairness. This SALT cap limit is totally unfair to villages like mine and others throughout the country. I want to thank Congressman Suozzi, on behalf of Bayville, for being a leader on this issue and for putting our taxpayers first.,” said Bayville Mayor Robert De Natale (testified before House Ways and Means earlier this year regarding impacts of SALT).
“The LIA commends Congressman Suozzi for his efforts to address the inequities in the federal law that caps SALT deductions that negatively impact our region,” said Long Island Association President & CEO Kevin Law.