U.S. Reps. Andrew Garbarino (R-NY) and Young Kim (R-CA) earlier this week joined several Republican colleagues to request that congressional leaders and the Biden administration immediately repeal the State and Local Tax (SALT) deduction cap.
“The weight and burden placed upon a great many of our constituents by the imbalanced features of the unreasonable $10,000 cap on the SALT deduction must be addressed by this current Congress,” the members wrote in a July 27 letter.
While the Tax Cuts and Jobs Act included many provisions that simplified the federal tax code and decreased the overall tax burden for many Americans, they wrote, “the unfair and counterproductive provision imposing the SALT cap” has harmed their constituents because the law did not consider regional differences in income across the United States.
“Instead it has imposed a de facto double tax on hardworking taxpayers in communities across the country,” the congressmen wrote.
According to their letter, the initial purpose of the SALT deduction was to prevent imposing federal taxes on top of state and local taxes already paid, and putting the cap in place ensures that taxpayers who reside in already high-taxed states, such as New York and California, are effectively taxed on a portion of income that was never available to that taxpayer.
Additionally, the cap on the SALT deduction has incentivized taxpayers from high-taxed states to flee these areas, costing state and local governments valuable tax revenues, wrote Rep. Garbarino, Rep. Kim, and their colleagues.
“Many of our constituents, including teachers, first responders, and members of law enforcement earn incomes that are higher than many with the same jobs in other parts of the country, but these incomes make them middle class in the high cost of living communities we represent,” wrote the members. “We welcome you, and all our colleagues, to visit our home districts and meet the real people being penalized and financially harmed by the cap.”
The congressmen asked that congressional leaders and the Biden administration repeal the SALT deduction cap. “Imposing the cap wasn’t fair in 2017, and it is still being proven to be unfair as it financially harms so many in our communities,” they wrote. “It is time that we as lawmakers bring commonsense and balance back to our tax code.”
