A congressional delegation of six Democratic lawmakers from New York, including senators Kirsten Gillibrand and Charles Schumer, is urging President-elect Donald Trump to permanently remove the cap on the state and local tax (SALT) deduction. During a press conference on Sunday, the lawmakers said that removing the SALT deduction cap would allow New Yorkers who itemize when filing federal taxes to fully deduct certain taxes paid to state and local governments, including property, income, and sales taxes.
Gillibrand says, “Republicans created this problem, and it is now their responsibility to fix it and restore the full SALT deduction. This would change the lives of hardworking New Yorkers who have been robbed. A full SALT deduction would ensure that families have more money in their pockets, get much-needed tax relief, and are once again treated fairly. President-elect Trump has an opportunity to reach across the aisle while also working within his own party to make an impact by eliminating an unfair and economically prohibitive policy.”
The 2017 Tax Cuts and Jobs Act (TCJA) capped the SALT deduction at $10,000 per year, negatively impacting New Yorkers’ pockets. According to the State of New York, the SALT deduction cap has cost New Yorkers as much as $12 billion every year since it took effect in 2018.
Gillibrand pointed to the following additional reasons for why reinstating the full SALT deduction will have positive benefits for New Yorkers:
- New Yorkers already subsidize other states by paying nearly $20 billion more in taxes than we receive back from the federal government.
- The SALT deduction cap resulted in double taxation by imposing federal taxes on the income used to pay state and local taxes above $10,000.
- The cap on the deduction encourages wealthier people to move to other states and leaves middle- and lower-income taxpayers holding the bag to pay for school, police and other essential state and local tax burdens
