Democrats search for sweet spot on ‘SALT’ deduction – Roll Call

A compromise short of full repeal appears to be the direction Democrats are headed, lawmakers and aides say. They may lose two House Democrats — New York’s Tom Suozzi and New Jersey’s Josh Gottheimer — who  have taken a hard line. But more limited SALT relief is seen as satisfying enough lawmakers to avoid sinking the broader bill.

New Jersey Rep. Bill Pascrell Jr., who earlier this year joined Suozzi and Gottheimer in pledging “No SALT, no deal,” said in a brief interview that he’s willing to accept less than full repeal. “I wanted to say I’d set [the cap] to about $25,000. But I’ll settle for [$20,000],” he said.

Support for the SALT deduction has always fallen more on regional lines than ideological ones.

Top Democrats such as Senate Majority Leader Charles E. Schumer of New York and Speaker Nancy Pelosi of California support repealing the cap because it would benefit their constituents. But they’re also conscious of concerns from Democrats in lower-tax states that the deduction, which can only be claimed by taxpayers who itemize, helps wealthy households the most.

A 2019 Joint Committee on Taxation report projected that 94 percent of the benefits of SALT cap repeal that year would go to taxpayers earning $100,000 or more. But about one-third of returns claiming the deduction would be households in the $100,000 to $200,000 range, the JCT found. In states like New York, New Jersey and California, with higher costs of living, those are middle-income earners.

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