In the News

The House Rules Committee approved a bill led by New York Republicans on Thursday that would increase the state and local tax (SALT) deductions cap, setting up a potential floor vote on the measure next week.

The Rules panel voted 8-5 along mostly party lines to pass the legislation, which aims to eliminate the so-called “marriage penalty” for joint filers making under $500,000 annually and sets their SALT deductions cap at $20,000.

Texas Rep. Chip Roy was the only committee Republican to join with Democrats in voting against it, indicating the New York GOP delegation may have to whip other colleagues to pass the bill in the narrowly divided House.

The SALT Marriage Penalty Elimination Act was introducedby Empire State GOP Reps. Mike Lawler, Anthony D’Esposito, Marc Molinaro, Nick Lalota and Andrew Garbarino — who all threatened to withhold votes on other bills if theirs failed. 

“I promised to vote against House Republicans’ tax legislation if it didn’t include any provisions to raise the cap on the SALT deduction. I kept my promise,” D’Esposito said in a statement.

“Fellow New Yorkers and I made the importance of SALT clear to House leadership, and I co-sponsored a bill to raise the SALT cap for married tax filers,” he added. “I will continue advocating for New York taxpayers and fight to get this bill passed in the House.”

Lawler said his bill would be considered “as early as next week,” but a spokeswoman for House Speaker Mike Johnson (R-La.) was unable to confirm the exact timeline. 

“There is still more work to be done, however, and I look forward to this crucial legislation passing the House,” Lawler added. “We must finish the job and get this passed in the Senate and sent to the President’s desk expeditiously – hard-working middle-class families across our country deserve this critical relief.”

A $10,000 SALT deductions cap was introduced by the Tax Cuts and Jobs Act signed into law by President Donald Trump in 2017, hurting residents of high-tax states like New York and New Jersey who were formerly able to deduct state and local real estate taxes from their topline federal amount owed.

“By extending the expired provisions of Trump’s economic policies that brought us the lowest unemployment in 50 years and expanded the child tax credit that lifted millions of families out of poverty, we are helping bring our economy back,” Staten Island Rep. Nicole Malliotakis (R-NY) told The Post. 

“As a member of the Ways and Means Committee, I look forward to continuing to bring tax relief to Americans and work on increasing the Standard Deduction, SALT relief and exempting more Social Security income from taxation.”

But House Minority Leader Hakeem Jeffries (D-NY) blamed Republicans during a press conference for having created the problem when they blew up the state and local tax deduction and stuck middle-class families, in some cases, with tax bills that were $10,000 or $20,000 or $25,000 more than they might have otherwise faced.

New Jersey Democratic Rep. Mikie Sherrill had co-sponsored a nearly identical but earlier version of the bill. Still, it remains unclear how many other Democrats would vote for its passage.

Rep. Bill Pascrell (D-NJ) introduced an amendment to raise the SALT cap to $60,000 as part of a larger tax bill considered in the House Ways and Means Committee, but every Republican voted the amendment down.

The New York GOP lawmakers previously sought that same deduction amount during last year’s debt ceiling fight.

On Wednesday, the House passed the $78 billion tax bill in a 357-70 bipartisan vote, with 47 Republicans — including D’Esposito and LaLota — and 23 Democrats voting against the measure.

The bicameral Tax Relief for American Families and Workers Act was crafted by House Ways and Means chairman Jason Smith (R-Mo.) and Senate Finance Committee chairman Ron Wyden (D-Ore.), and brought up under suspension of the rules, meaning it faced no procedural hurdles before the final vote.

The bill increases the maximum tax credit per child to $2,000 through 2025 and ups the low-income housing tax credit by 12.5% through 2025.

It also has provisions to deduct any taxable income from disaster relief due to wildfires or the Norfolk Southern train derailment in East Palestine, Ohio, as well as various business deductions and a carveout for Taiwanese companies to avoid taxing their workers twice in the US and abroad.

https://nypost.com/2024/02/01/news/ny-gop-moves-state-and-local-tax-bill-to-raise-deductions-slated-for-house-vote-next-week/