House Dems vote to repeal 2017 cap on state and local tax deduction

The House approved a bill on Thursday that would remove the $10,000 federal cap on state and local tax deductions that Republicans included in their 2017 tax overhaul and that both Democrats and Republicans from high-tax states like New York and New Jersey have opposed.

The proposal, which would raise the cap to $20,000 for couples in 2019 and largely eliminate it for the next two years, passed nearly along party lines by 218-206, with most Democrats in support and most Republicans opposed. Five Republicans, four of them New Yorkers, joined Democrats in support.

The bill, sponsored by a Long Island Democrat and dubbed the Restoring Tax Fairness for States and Localities Act, also would reverse a 2017 cut in the top federal income tax rate, restoring the rate to 39.6 percent instead of 37 percent.

Opponents have condemned the so-called SALT deduction cap as “double taxation” – forcing some homeowners to pay federal taxes on income they already spent on local property taxes and state income tax – and even as a cynical retaliation against Democratic-leaning states. Both Reps. Sean Patrick Maloney and Antonio Delgado voted for the repeal proposal and applauded it in statements afterward.

“Middle-class families across the Hudson Valley have been absolutely slammed by the GOP tax bill and its unfair cap on state and local tax deductions,” Maloney, D-Cold Spring, said. “I’m proud to help pass this bill, which will right this wrong by ending this double taxation and bring fairness back to states like New York.”

Delgado, a freshman Democrat from Rhinebeck, said he had been working on legislation to repeal the SALT deduction cap since his second month in office.

“Working people in upstate New York are paying too much in taxes already, and the 2017 Republican tax law creates double taxation for middle and working class families while adding more than a trillion to the deficit,” he said.

Gov. Andrew Cuomo, a Democrat who has railed against the SALT deduction cap and sought ways for New Yorkers to circumvent it, cheered the House repeal bill as a restoration of fairness and urged the Senate to pass it.

“The Trump administration’s SALT policy was a politically motivated economic assault on New York,” Cuomo said. “As the number one donor state, New Yorkers are sick and tired of being used as ATMs, footing an additional $15 billion each year that will be redistributed to red states and big corporations.”

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