House Democrats push for SALT relief in appropriations bill
[ad_1]
Rep. Tom Suozzi (D-N.Y.) speaks at a news conference to announce the State and Local Taxes Caucus (SALT), outside of the U.S. Capitol, April 15, 2021.
Sarah Silbiger | Bloomberg | Getty Images
Five House Democrats, despite roadblocks to their cause, are fighting for relief from the $10,000 federal deduction for local and state taxes. This is known as SALT.
Rep. Mikie Sherrill, D-N.J., sent a letter to leaders of the House Appropriations Subcommittee on Financial Services and General Government, urging colleagues to deny the IRS funds to block state-level SALT cap workarounds.
Signed by Reps. Josh Gottheimer, D-N.J.; Tom Malinowski, D-N.J.; Katie Porter, D-Calif.; and Tom Suozzi, D-N.Y., the letter requests a provision be added to the fiscal year 2023 appropriations bill.
Find out more from personal finance:
Women are still paid 83 cents for every dollar men earn
How to sidestep a tax bomb when selling your home
High-yield bonds may lose appeal amid rising interest rates
In particular, the letter mentions legislation in New York State and New Jersey which allows local authorities to set up charitable funds that offer homeowners property tax credits. This law would allow taxpayers who have itemized their deductions to be eligible for a charitable write off.
However, the IRS as well the U.S. Department of the Treasury remain in effect barred this workaround in 2019It would be a “quid proquo” to say that a charitable contribution received a SALT credit.
Gottheimer co-chairs this committee. “Congress did not give the IRS permission for the IRS to interpret the tax code as they see fit. They have done so by dismantling charitable tax deduction.” SALT Caucus.
“We need to do everything possible, even restoring SALT,” he said.
Former president enacted the $10,000 limit on SALT. Donald TrumpThis tax reform, which is the signature of President Obama, has proven to be a problem for many high-tax states like New York, New Jersey and California. It prohibits residents from deducting more than $10,000 in local and state levies when filing federal taxes.
The SALT cap, which was an issue for Build Back Better negotiations and was supported by a small Democratic House majority in November, was passed by lawmakers. $80,000 SALT cap through 2030in their spending packages. But Sen. Joe ManchinThe Senate was blocked by D-W.Va.
Another setback occurred in April for the SALT reform movement. Supreme Court rejected a challengeNew York City and three states will overturn the legislation.
Pressure on the SALT relief
Garrett Watson, senior policy analyst at the Tax Foundation, called the SALT relief advocacy’s recent move “an interesting approach” and expects resistance from both lawmakers and the public.
“The appropriations period is already quite turbulent between both parties,” said he, in reference to continuing disagreements over IRS funding and direction.
Watson suggested that another worry could be about the type of taxpayers trying to benefit from state-level SALT Cap workarounds. These people are “more sophisticated,” which Watson says correlates with income.
Current workarounds in some statesOnly pass-through business are eligible for the benefits. Owners receive their individual tax returns. Opponents of SALT relief have long maintained that the lifting of this cap could primarily be beneficial to wealthy households.
A Tax Policy Center report suggests that if repealed, over 96% of relief may be available to taxpayers who are in the top 20%. reportOnly 9% affect American households.
[ad_2]