House panel to hold hearings on SALT deduction cap

House panel to hold hearings on SALT deduction cap
© Greg Nash

A House panel is set to hold hearings next week on the GOP tax law's cap on the state and local tax (SALT) deduction — a provision that has been a top concern for politicians in high-tax, Democratic-leaning states.

Rep. Mike ThompsonCharles (Mike) Michael ThompsonPelosi digs in on impeachment rules fight House votes to temporarily repeal Trump SALT deduction cap On The Money: Pelosi, Trump tout deal on new NAFTA | McConnell says no trade vote until impeachment trial wraps up | Lawmakers push spending deadline to Thursday MORE (D-Calif.), chairman of the Ways and Means Subcommittee on Select Revenue Measures, announced Tuesday that his panel is scheduled to hold a hearing on June 25 about how the limits on the SALT deduction are impacting communities, schools, first responders and housing values.

Later that day, the panel will hold a hearing where lawmakers will discuss their proposals related to the SALT deduction cap.

The tax law that President TrumpDonald John TrumpTrump rails against impeachment in speech to Texas farmers Trump administration planning to crack down on 'birth tourism': report George Conway on Trump adding Dershowitz, Starr to legal team: 'Hard to see how either could help' MORE signed in late 2017 capped the SALT deduction at $10,000 for both individuals and married couples.

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Most Republicans support the cap, arguing that it helps to prevent the tax code from subsidizing higher state taxes and noting that most taxpayers even in high-tax states are getting a tax cut from the law. But the cap is opposed by Democrats as well as some Republican lawmakers from high-tax states such as New York and New Jersey, who argue that it's harmful for people in their districts and will make it harder for their states and localities to provide robust services to their residents.

The SALT deduction cap is one of the provisions that Democrats have highlighted on the campaign trail as they make the case against the GOP tax law. A number of House seats in New York, New Jersey and California — where many taxpayers claim the SALT deduction — flipped in the 2018 midterm elections from Republican to Democratic control.

But Democrats face obstacles to rolling back the SALT deduction cap. Trump said he was open to revisiting the SALT deduction cap during a February interview, but key GOP lawmakers, such as Senate Finance Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyTrump administration planning to crack down on 'birth tourism': report Senate begins preparations for Trump trial Big Pharma looks to stem losses after trade deal defeat MORE (R-Iowa), have said they don't plan to reconsider it. Additionally, think tanks across the political spectrum have estimated that repealing the cap would primarily benefit the wealthy and cost hundreds of billions of dollars.

The hearings mark the latest step in House Democrats' effort to figure out the path they want to pursue on the SALT deduction. In April, Democrats on the Ways and Means Committee formed a working group to discuss the issue.

Several bills have been introduced to raise or repeal the SALT deduction cap, some of which have bipartisan support. 

For example, Rep. Bill PascrellWilliam (Bill) James PascrellHouse approves Trump's USMCA trade deal amid shadow of impeachment A solemn impeachment day on Capitol Hill Van Drew, set to switch parties, will vote as a Democrat on impeachment MORE (D-N.J.) and Sen. Bob MenendezRobert (Bob) MenendezMedia's selective outrage exposed in McSally-Raju kerfuffle Dem senators say Iran threat to embassies not mentioned in intelligence briefing Overnight Defense: Iran crisis eases as Trump says Tehran 'standing down' | Dems unconvinced on evidence behind Soleimani strike | House sets Thursday vote on Iran war powers MORE (D-N.J.) in February offered a bill to repeal the SALT deduction cap and raise the top individual tax rate. Their bill has the support of Rep. Chris SmithChristopher (Chris) Henry SmithHouse votes to temporarily repeal Trump SALT deduction cap GOP lawmaker to offer bill to create universal charitable deduction on 'Giving Tuesday' China threatens 'strong countermeasures' if Congress passes Hong Kong legislation MORE (R-N.J.) and several Democratic presidential candidates.

Illinois Democratic Reps. Sean CastenSean CastenHouse votes to temporarily repeal Trump SALT deduction cap Pelosi warns of 'existential' climate threat, vows bold action Pelosi heading to Madrid for UN climate change convention MORE and Lauren UnderwoodLauren UnderwoodAyanna Pressley's 'squad' of congresswomen offers support after she opens up about alopecia Democrats worry party is squandering political opportunity on ObamaCare Overnight Health Care — Presented by Rare Access Action Project — Court ruling reignites ObamaCare fight for 2020 | Congress expands probe into surprise billing | Health industry racks up wins in year-end spending deal MORE offered a bill in March to increase the SALT deduction cap to $15,000 for single filers and $30,000 for married couples.

Pascrell praised the upcoming hearings.

"The Congress needs to hear from the mayors, educators, police officers, firefighters, realtors, and others about how limiting SALT damages our communities," he said in a statement. "The hearing will also be an important opportunity to highlight my legislation with Senator Menendez that would fully restore SALT.”