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SALT deduction relief may be in peril as Build Back Better stalls


California Democrat Judy Chu addresses a press conference to announce the State and Local Taxes Caucus in Washington, D.C. on Thursday, April 15th 2021.

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As Build Back Better stalls, the Democrats may lose their plan to raise the federal deduction for local and state taxes (known as SALT)

On Sunday, Sen. Joe Manchin (D-W.Va.) said he won’t vote for Build Back BetterStopping the current President Joe BidenThe package’s climate, social and environmental benefits total $1.75 trillion

All 50 Democratic Senators must support lawmakers in order to overcome Republican opposition during the budget reconciliation process.

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With some Democrats opposing SALT relief, it could be hard to pass the measure as an independent bill outside Build Back better.

However, some policy experts say Democrats may still revive the bill — including SALT cap relief — at the beginning of 2022.

Howard Gleckman (senior fellow at Urban-Brookings Tax Policy Center) stated that while I may have a tendency to be optimistic, there is still the possibility of the Democrats passing Build Back Better in the early part of next year.

They realize that they must provide for House Democrats from wealthy suburban areas.

Howard Gleckman

Urban-Brookings Tax Policy Center Senior Fellow

However, if Democrats revise the bill in order to reduce social spending they might be able to lower the proposed $80,000 SALT deduction limitHe replied, 

Gleckman stated that he believes the plan will be reduced. “But, I believe they realise they need to offer something for House Democrats who are wealthy and suburban.”

Senate intends to vote on Build Back Better in JanuaryThis was despite Manchin’s resistance. The bill could change, but it is not yet clear how. 

“I believe we can reach common ground to lower prescription drug prices, reduce taxes for middle-class families who have SALT, invest into pre-K for our children, and achieve other commonsense priorities,” Rep. Josh Gottheimer (D-N.J.), a longtime advocate for SALT relief and co-chairman of the Problem Solvers Caucus. said in a tweet.  

He stated, “I will be doing my part to bring everyone back together,”