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2021-5-25-09_Washington_DC_Capitol_Shutter_640x640

Financial Planning > Tax Planning > Tax Deductions

SALT Deduction Bill to Get Procedural Vote Wednesday

By Melanie Waddell

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Legislation to double the state-and-local tax deduction cap for joint filers, H.R. 7160, the SALT Marriage Penalty Elimination Act, will be up for a procedural vote Wednesday.

House Democratic whip Katherine Clark sent out a preview of the week’s schedule that includes the SALT bill. However, House Majority Leader Steve Scalise’s schedule does not mention the bill.

A spokesperson for Scalise’s office told ThinkAdvisor Tuesday in an email that while the majority leader does not put “rule votes on our schedule,” the procedural vote on whether to allow the bill to come to the floor for a vote will be Wednesday.

The bill would double the cap to $20,000 for couples beginning after Dec. 31, 2022, and before Jan. 1, 2024, if the couple’s adjusted gross income for a taxable year is less than $500,000.

The change would apply to taxable years beginning after Dec. 31, 2022.

The Capitol Hill newspaper Roll Call reported on Jan. 31 that House Republicans were considering moving what became the SALT bill “in parallel” with the $78 billion Tax Relief for American Families and Workers Act of 2024, which passed the House later that day.

The SALT cap, part of the 2017 tax overhaul during the Trump administration, has long been criticized and targeted by lawmakers from high-tax states like New York and California.

Erica York, senior economist and research manager at the Tax Foundation in Washington, told ThinkAdvisor Tuesday in an email that the bill “would double the cap on itemized deductions for state and local taxes paid for joint filers making under $500,000 in adjusted gross income in 2023.”

In doing so, York said, “it would increase the budget deficit, create a new cliff in the tax code, and mostly benefit higher earners, all without improving long-run economic growth.”

The bill “takes a flawed approach to tax policy,” York said. “Instead of weakening the SALT cap, policymakers should strengthen it to pay for permanent improvements to the tax code like lower marginal rates and better cost recovery for business investment.”

Melanie Waddell

@Think_MelanieW

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