U.S. Rep. Max Rose (D-South Brooklyn, Staten Island) voted last week to restore the State and Local Tax (SALT) deduction. The House narrowly voted to pass the bill, 218-206, mainly along party lines.
The state and local tax (SALT) deduction allows taxpayers of high-tax states to deduct local tax payments on their federal tax returns. President Trump’s new tax plan, called the Tax Cuts and Jobs Act, established a cap on the SALT deduction. Up until the 2018 tax year, there was no limit on deductions.
The Republican-passed Tax Cuts and Jobs Act of 2017 capped the SALT deduction for federal taxes at $10,000 per household.
“The fact that Republicans passed tax cuts for drug companies and billionaires on the backs of cops, firefighters, teachers, nurses and homeowners across Staten Island and South Brooklyn is a disgrace,” Rose said. “Today, we are one step closer to putting government back on the side of working Americans by restoring the SALT Deduction. We pay enough in property taxes and it’s time for the federal government to have our back.”
Rose was an original co-sponsor of the bipartisan Restoring Tax Fairness for States and Localities Act of 2019, a bill that will lift the $10,000 cap on state and local tax deductions for 2020 and 2021. The legislation will also eliminate the SALT Deduction Cap’s Marriage Penalty in 2019, which limits all households to $10,000 in state and local tax deductions, regardless of marital status.
The bill also doubles the deduction for educators’ out-of-pocket classroom expenses from $250 to $500, and creates a $500 above-the-line deduction for unreimbursed expenses of professional first responders related to the cost of uniforms or tuition and fees related to training. The cost of the bill will be offset by restoring the top individual income tax rate from the current 37 percent to the level of 39.6 percent before the Trump tax bill, while also restoring the top income bracket.
Governor Andrew Cuomo called on the New York delegation and Congress to vote to restore salt deductibility. “As the number one donor state, New York already sends back tens of billions of dollars more than we receive from the Federal government, and the cap on SALT deductibility took this imbalance and dramatically exacerbated it,” Cuomo said. “This policy is an economic civil war that helps red states and big corporations at the expense of blue states, and it needs to end immediately.”
At a House Committee on Ways and Means hearing earlier this year, Rose criticized the partisan tax bill that capped SALT deductions homeowners rely on, and called for adjustments.
“This was a political hit job passed a year ago or so, by a party that wanted to—under a thin guise—aid and abet their donors and corporate benefactors on the backs of people that they didn’t care about,” said Rose in his testimony. “We’re talking about cops, firemen, teachers, nurses, first responders—people that do everything right. They follow the rules, they keep their head down, they work hard, they serve us, and they keep us safe. We thank them, but then we hit them with something like this. It’s going to make it harder to own their home, their real-estate values are going to go down.”
