Democrats’ ‘SALT’ headache hangs over budget reconciliation bill – By Lindsey McPherson and Laura Weiss (Roll Call) / Nov 16 2021
Independent analysts say House plan would cut taxes for the rich; Senate proposal would phase out tax break for higher incomes
Democrats set out to pay for their massive clean energy and social spending package with tax increases on the wealthy, but a parochial desire among lawmakers from high-tax states to provide relief from a $10,000 cap on state and local tax deductions has undermined that goal.
Any adjustment risks providing a windfall to wealthy taxpayers that they otherwise wouldn’t get under Democrats’ budget reconciliation bill. That’s why House lawmakers waited until the last minute to work “SALT” relief into the package and why there’s not a final agreement with the Senate on the best approach.
“Whatever they do on SALT is likely to scale back the tax increase on high-income households,” Kyle Pomerleau, American Enterprise Institute senior fellow for federal tax policy, said.
The latest House version, which the chamber is expected to vote on this week, would raise the $10,000 cap to $80,000 and extend its life by six more years, with the cap snapping back to $10,000 in 2031 before expiring.
CONTINUE > https://www.rollcall.com/2021/11/16/democrats-salt-headache-hangs-over-budget-reconciliation-bill/
