Republicans in Congress are attempting to extend the tax cuts that were implemented by former President Donald J. Trump, but the sticking point seems to be the $10,000 cap on deducting state and local taxes (SALT).
Many homeowners who live in high-tax areas, especially Long Island, take advantage of the SALT deduction. That is because a majority of their tax bills are property taxes, which are higher than the state and national averages. According to the Tax Foundation, Long Island is one of the most expensive areas to live in, with Nassau County being the most expensive and Suffolk as the 12th most expensive county in the nation.
“While there are some tax cuts and other provisions of the law that we would like to see extended, the SALT cap is not one of them,” Long Island Congressman Andrew Garbarino, a Republican and co-chairman of the SALT Caucus, told The Washington Examiner. He is introducing the SALT Deductibility Act (H.R.613), which would eliminate the cap and reinstate the full SALT deduction.
In 2021, the Senate considered a repeal of the SALT cap on those making $500,000 annually or less. According to the Center for Responsible Budgeting (CFRB), the Senate proposal would result in a loss of $150-$200 billion in tax revenue over a five-year period.
U.S. Representative Mike Lawler (R-Pearl River) announced that he is introducing the SALT Marriage Penalty Elimination Act, which would double the deduction to $20,000 for married couples. He said it is unfair for married couples who file jointly to receive only a $10,000 deduction, while single homeowners are entitled to the same amount. The bill is being co-sponsored by Republican Anthony D’Esposito of Long Island and Democrat Mikie Sherrill of New Jersey.
“What I’m introducing here is a commonsense, bipartisan piece of legislation that begins to chip away at the cap on SALT in a way that I think we can get it passed,” Lawler told The Examiner-News.
The SALT deduction cap is set to expire in 2025, which is OK with Garbarino. “The clock is running out,” he told Roll Call. “To me, I’d like to see it go completely in three years. I think it would be better than doing any sort of extension with a lift or with an increase right now. So I think time is on our side.”