NY lawmakers offer bill to restore state and local tax deduction

NY lawmakers offer bill to restore state and local tax deduction
© Greg Nash

A bipartisan pair of House members from New York introduced legislation this week to restore the full state and local tax (SALT) deduction, which is limited by the new tax law that President TrumpDonald John TrumpNew Jersey incumbents steamroll progressive challengers in primaries Tucker Carlson ratchets up criticism of Duckworth, calls her a 'coward' Trump on Confederate flag: 'It's freedom of speech' MORE signed last month.

Reps. Nita LoweyNita Sue LoweyNew Jersey incumbents steamroll progressive challengers in primaries Overnight Defense: House Dems offer M for Army to rename bases | Bill takes aim at money for Trump's border wall | Suspect in custody after shooting at Marine training facility  Defense spending bill would make Pentagon return unspent money taken for border wall MORE (D-N.Y.) and Pete KingPeter (Pete) KingCheney clashes with Trump Coronavirus Report: The Hill's Steve Clemons interviews Rep. Sean Patrick Maloney On The Money: 3 million more Americans file for unemployment benefits | Sanders calls for Senate to 'improve' House Democrats' coronavirus bill | Less than 40 percent of small businesses have received emergency coronavirus loans MORE (R-N.Y.) said on a call with reporters Tuesday that they are offering their bill in order to prevent many of their constituents from seeing their taxes go up. The new tax law caps the deduction at $10,000, which Lowey and King said is insufficient for many residents of their districts.

“This is so negative for our constituents,” said Lowey, the top Democrat on the House Appropriations Committee.

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Opponents of the SALT deduction argue that the preference largely benefits wealthy taxpayers, but Lowey and King said that middle-class people in their districts, such as teachers and firefighters, will be hurt by the cap.

“These are average, hard-working people,” King said.

King said he expects his and Lowey's bill to get support from other lawmakers, though not enough to get the bill on the House floor. However, he said there be may be opportunities throughout the year to get the measure included in other legislation, such as a budget or appropriations bills.

The New York lawmakers' bill comes as elected officials in high-tax states are looking at ways to circumvent the SALT cap. These options include suing the federal government over the tax law, providing a tax credit for charitable contributions to state and local funds and shifting from an income tax system to a payroll tax system.