SALT Lawmakers Taking to House Floor in Push for Tax Break

(Bloomberg) -- A rare show of bipartisan unity over tax policy may unfold Tuesday evening, with 18 lawmakers set to make their case on why House Speaker Nancy Pelosi should include an expansion of the state and local tax deduction in upcoming legislation.

The lawmakers, including Democrats Tom Suozzi and Josh Gottheimer and Republicans Michelle Steel and Young Kim, will spend more than an hour Tuesday evening defending the state and local tax, or SALT, write-off on federal taxes, according to plans from the lawmakers. They aim to detail why the break needs to be expanded as part of Biden’s broader economic agenda.

The SALT deduction is a top priority for many lawmakers from high-tax states including New York, New Jersey and California. Those legislators say that it’s critical for middle class residents of their states to be able to write off more than $10,000 of local levies -- a limitation that was placed on the tax break in President Donald Trump’s 2017 tax law.

In their continuing campaign, Kim and Suozzi on Wednesday will host an event with representatives from the National Association of Counties and National League of Cities to talk about how the limits on the SALT deduction hamper local governments from raising revenue to fund services, including education, housing and transportation.

Expanding the tax break has become a key point of tension for House Democrats as they begin to craft legislation to pump trillions of dollars into education, child care and housing, paid for by tax increases on the wealthy and corporations. More than 20 House Democrats say that bill also needs to include SALT relief to win their votes, but progressives have countered that the benefit mainly accrues to the well-off.

Biden has so far declined to include an expansion of SALT deductions in his tax proposals. White House Press Secretary Jen Psaki has said that it’s up to Congress to craft a plan and find a way to pay for it.

The House is in the initial stages of drafting a budget resolution that would allow for a tax and spending bill later this year on Democratic votes alone. The Senate is also working to initiate the process in their chamber. Senator Bernie Sanders is working on a draft proposal that would include $120 billion for SALT relief, about one third of what the tax break’s biggest supporters are calling for.

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