Today, U.S. Senator Kirsten Gillibrand, Senate Minority Leader Chuck Schumer, and Democratic members of the New York congressional delegation urged President-elect Trump to permanently remove the cap on the state and local tax (SALT) deduction and put more money in the pockets of everyday New Yorkers. 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.
“Republicans created this problem, and it is now their responsibility to fix it and restore the full SALT deduction,” said Senator Gillibrand. “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.”
“Eliminating the SALT cap is not just about fairness; it’s an economic imperative to support middle-class families, bolster local municipalities, and safeguard vital services like public safety and emergency response,” said Congressman Jerrold Nadler. “As Dean of the New York House Delegation, I am proud to join my New York Democrat colleagues in calling for the full elimination of the SALT deduction cap in any tax-related legislation brought to the House floor.”
“Eight years ago, Donald Trump and the Republican party dramatically reduced the State and Local Tax deduction, exacerbating the affordability crisis and costing working New Yorkers billions of dollars a year,” Congressman Dan Goldman said. “With Trump’s Republican Party in full control of Washington, it is up to New York House Republicans to stand by their campaign promises and permanently reinstate the full SALT deduction. There are no excuses: you either deliver for your constituents or you don’t.”
“Restoring the SALT deduction before the next annual income tax filing date is an imperative goal due to the negative impact its repeal continues to have on middle-class tax-payers in New York,” said Congressman George Latimer. “I stand with my colleagues urging the House and Senate to implement a tax policy that benefits the middle class homeowners, and immediately relieves New Yorkers of this disproportionate financial burden.”
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.
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