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April 16, 2021, 12:00 a.m. EDT

Lawmakers launch bipartisan ‘SALT caucus,’ escalating push to remove cap on federal deductions for U.S. state and local taxes

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By Victor Reklaitis

A drive led by some U.S. lawmakers from high-tax states gained steam on Thursday, as they launched a bipartisan “SALT caucus.”

The new 30-member group seeks a repeal of the $10,000 cap on deductions from federal income tax for state and local taxes that was put in place by 2017’s tax overhaul. 

The push on the SALT cap poses a risk to President Joe Biden’s infrastructure and tax plans , as some House Democrats have threatened to oppose them unless the SALT issue is addressed.

The Biden administration has been reluctant to take up the issue so far, given it would both cost the government revenue and the benefits in many cases would go to higher-income residents of those relatively high-tax states.

At Thursday’s rollout of the new caucus, members of the group made an effort to emphasize how their issue affects middle-class Americans.

“I think there’s some misconception out there that this won’t help middle-class families,” said Democratic Rep. Mikie Sherrill of New Jersey.

“Over half of our constituents in my district took the SALT deduction before the 2017 tax plan, so this has really been harmful to teachers and cops throughout my district,” she added.

Other members of the new caucus stressed that their districts have higher incomes but also higher costs of living.

“This group is going to work together to educate people about how the middle class in my district — or in many of the districts here — is very different than the middle class in other districts in the country,” Democratic Rep. Tom Suozzi of New York said.

“If you make $100,000 or $120,000 or $150,000 in my district, that’s middle class. In other parts of the country, that’s seen as being upper income.”

The Committee for a Responsible Federal Budget has called repealing the cap a “regressive” move, noting a Tax Policy Center estimate that 96% of the benefits from a SALT cap repeal would go to the top 20% of taxpayers.

Opinion:   We don’t know if the SALT cap is driving away residents of high-tax states

White House press secretary Jen Psaki told reporters Wednesday that the administration is interested in other ideas on how to pay for an infrastructure package, and the SALT deduction “would not be a revenue raiser.”

“We’re certainly happy to hear more from them and the impact and why they think this is so important to their states and communities,” she said of the lawmakers fighting for a removal of the cap.

Jonathan Nicholson contributed to this report.

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