According to a report, House Democrats propose increasing the federal tax deduction for local and state taxes from $10,000 to $72,500. draft of the billReleased by the Rules Committee. The new limit will apply until 2031.

Some lawmakers representing high-tax states, such as New York and New Jersey have used the $10,000 SALT limit to bargain with Democrats on their $1.75 trillion spending plan. 

A second proposal was rejected by lawmakers from both the left and right, including Senator Bernie Sanders (I-Vt.). It would have a 5-year suspension from 2021 to 2025, with reinstatement starting in 2026 or 2031.

Learn more about Personal Finance
Here’s how Biden’s Build Back Better framework would tax the rich
Paid-leave advocates slam exclusion of policy from social spending bill
Enhanced child tax credit will continue for 1 more year, per Democrat plan

Sanders stated, “In a period of huge income and wealth inequalities, we shouldn’t be giving tax breaks to very wealthy people.” in a statement

He stated that Democrats campaigned for an agenda that requires that wealthy people pay more taxes and not just get more.

Sanders, however, is open to compromises that protect the middle class of high-tax states. For example: a repeal of SALT’s cap on income for people below a certain threshold.

Senator Bob Menendez (D-N.J.) has called the plan out as well in a tweetShe stated that “SALT proposals such as five years off and five years on were gimmicks” that would mostly be of benefit to millionaires, at the expense middle-class families.

The new proposal will still benefit those who make more than $200,000 but only 80%. Tax Foundation analysisThe biggest tax breaks may be available to those who make between $250,000 and $1 million.