The Biden infrastructure bill aims to provide far-reaching benefits — and also contains several tax provisions designed to provide funding to accomplish its goals. It does not, however, address the $10,000 cap on the deduction for state and local taxes (the “SALT cap”) that many in Congress have long sought to eliminate. In response, several members of Congress have indicated that they will block the infrastructure proposal if the SALT cap is not repealed.
We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about the lawmakers’ threat.
Below is a summary of the debate that ensued between the professors.
Bloink: The SALT cap is patently unfair to millions of Americans who live in high-tax states. Repealing or scaling back the SALT cap would be a key way that we can help taxpayers who have been hit hard by COVID-19. We now have a piece of legislation on the table that could be used to accomplish just that — and I don’t blame Democrats in Congress for using that legislation to hold our new administration to their campaign promises.
Byrnes: This is politics at its worst. Democrats are using the infrastructure bill as a way to sneak a SALT cap repeal past the American people. I’m surprised anyone reasonable in Congress is even pushing for this in light of the limits that have been placed on stimulus payments for those with even moderate incomes. We’re already looking at a proposed law that would hurt the businesses that we should be trying to support. Using those corporate tax hikes to support a tax cut for a group of wealthy Americans seems counterproductive.