Moderate Democrats want the $3.5 trillion spending plan to remove the limit on state and local tax deductions

Trump’s tax law limited SALT deductions to $10,000, meaning that residents in higher-tax states like New York and New Jersey could no longer deduct the full value of their state tax obligation from their federal bill. No limit existed before the Trump tax cuts.

While some politicians had left room for negotiating the cap higher, Sherrill doubled down on her view that the limit ought to be completely eradicated.

“I really think that what is required here is a full repeal,” Sherrill said in a phone interview.

“Because I think not only is it something that would be helpful as we try to recover the economic engine that is New Jersey … but I also think that it is a value in our tax system,” she added. “That if we are going to fund things like our teachers, and our cops, and our schools through state and local taxes, that you don’t hinder a state’s ability to do so.”

Suozzi also wants a full repeal.

“I am completely opposed to an increase to the cap. That would be a great political victory because it would help a lot of people in my district and in many districts throughout the country,” he said. “But it wouldn’t address the policy issue, which is that people are leaving our states. And that’s bad policy for us.”

Gottheimer, Sherrill, Pascrell and Suozzi all represent wealthy districts compared with the national average. Of the four, Pascrell is the only one to represent a district with a median household income below $100,000, according to recent Census data.

Some of their more-progressive peers say that lifting the cap would disproportionately benefit the wealthiest American households.

Rep. Alexandria Ocasio-Cortez, D-N.Y., said in April that doing away with the cap would be “a giveaway to the rich.” The progressive lawmaker noted at the time that she is open to “a conversation” about edits, but that a full repeal is excessive.

Ocasio-Cortez represents a district with a median household income of $66,700, according to Census data. Her office declined to comment for this story.

Article source: https://www.cnbc.com/2021/09/08/moderate-democrats-want-biden-spending-plan-to-eliminate-salt-cap.html