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 ThompsonHouse panel advances anti-gun violence legislation Pelosi asks Democrats for 'leverage' on impeachment House Democrats request sit-down with McConnell to talk guns 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 TrumpMarine unit in Florida reportedly pushing to hold annual ball at Trump property Giuliani clashes with CNN's Cuomo, calls him a 'sellout' and the 'enemy' Giuliani says 'of course' he asked Ukraine to look into Biden seconds after denying it 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 GrassleyOvernight Health Care — Presented by Partnership for America's Health Care Future — Pelosi unveils signature plan to lower drug prices | Trump says it's 'great to see' plan | Progressives pushing for changes Trump: 'Great to see' Pelosi plan to lower drug prices Pelosi unveils signature plan to lower drug prices 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 PascrellOn The Money: Senate panel scraps vote on key spending bill amid standoff | Democrats threaten to vote against defense bill over wall funding | Trump set to meet with aides about reducing capital gains taxes GOP lawmaker calls for investigation into CNN spy story Ocasio-Cortez renews impeachment call amid probe involving Trump's Scotland property MORE (D-N.J.) and Sen. Bob MenendezRobert (Bob) MenendezAs NFIP reauthorization deadline looms, Congress must end lethal subsidies Senate Democrats warn Trump: Don't invite Putin to G-7 Pelosi warns Mnuchin to stop 'illegal' .3B cut to foreign aid 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 SmithUS meddling in Hong Kong could trigger a tragedy Republicans plot comeback in New Jersey The 9 House Republicans who support background checks MORE (R-N.J.) and several Democratic presidential candidates.

Illinois Democratic Reps. Sean CastenSean CastenSwing-seat Democrats oppose impeachment, handing Pelosi leverage Ex-GOP Rep. Roskam joins lobbying firm The House Democrats who voted to kill impeachment effort MORE and Lauren UnderwoodLauren UnderwoodKhanna calls out progressives who haven't endorsed Lipinski challenger Ilhan Omar, Ayanna Pressley dance to Lizzo's 'Truth Hurts' in video The Hill's Morning Report - US coastline readies for Hurricane Dorian to make landfall 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.”