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Congressional scorekeeper: Repealing SALT deduction cap would benefit high earners

Congressional scorekeeper: Repealing SALT deduction cap would benefit high earners
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Repeal of the GOP tax law's cap on the state and local tax (SALT) deduction would almost exclusively benefit those with incomes of at least $100,000, and much of the benefit would go to those with incomes of at least $1 million, according to Congress's tax scorekeeper.

The Joint Committee on Taxation (JCT) estimated in a report released Monday that repealing the cap would cut taxes for 13.1 million taxpayers in 2019, 94 percent of whom have economic income of at least $100,000. JCT also said about 99 percent of the reduction in tax liability would go to those with incomes of at least $100,000.

In total, eliminating the SALT deduction cap would reduce tax liability by $77.4 billion in 2019, and $40.4 billion of the tax cut would go to taxpayers with incomes of at least $1 million, according to JCT.

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The report was released ahead of House Ways and Means Committee hearings on the SALT deduction cap. Tuesday morning, the committee's tax subcommittee is slated to hear testimony from local government officials who are expected to argue that the cap is hurting their communities. Tuesday afternoon, the lawmakers will have the opportunity to come before the subcommittee to discuss their legislative proposals relating to the SALT deduction cap.

JCT's estimates are likely to be highlighted during the hearing by Republicans, who want to keep the limits on the deduction.

Republicans in their 2017 tax-cut law capped the SALT deduction at $10,000, arguing that doing so helps to prevent the tax code from subsidizing higher state taxes. But the cap has drawn opposition from some lawmakers on both sides of the aisle from high-tax states such as New York and New Jersey, who argue that the cap hurts their residents and makes it harder for their states to offer robust services.

No Democrats voted for the GOP tax law, and nearly every House Republican who voted against the law did so because of concerns about the SALT deduction cap.

Lawmakers from high-tax states have introduced several pieces of legislation to roll back the SALT deduction cap. In some cases, lawmakers aimed to limit the benefits of their bills for high earners. Still, the right-leaning Tax Foundation has estimated that high-income taxpayers would benefit the most from those proposals.

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Rep. Bill PascrellWilliam (Bill) James PascrellNJ lawmakers ask Gannett to stop 'union-busting' efforts at 3 state newspapers Biden cautious in making Trump tax returns decision Democrats hesitant to raise taxes amid pandemic MORE (D-N.J.) and Sen. Bob MenendezRobert (Bob) MenendezBiden holds off punishing Saudi crown prince, despite US intel Senate confirms Thomas-Greenfield as UN ambassador The Memo: Biden bets big on immigration MORE (D-N.J.) introduced a bill in February to repeal the SALT deduction cap and raise the top individual tax rate from 37 percent to its pre-tax law level of 39.6 percent. Reps. Sean CastenSean CastenDemocrats don't trust GOP on 1/6 commission: 'These people are dangerous' The Hill's 12:30 Report - Presented by Facebook - Divided House on full display Newman fundraises off of growing feud with Marjorie Taylor Greene MORE (D-Ill.) and Lauren UnderwoodLauren UnderwoodIn America, women are frontliners of change New cyber panel chair zeros in on election security, SolarWinds hack Overnight Health Care: New COVID-19 cases nationally drop below 100K for first time in 2021 | CDC warns states against lifting restrictions amid threat of virus variants | Health officials warn COVID-19 eradication unlikely MORE (D-Ill.) have a bill that wouldn't fully repeal the cap but would increase it to $15,000 for single filers and $30,000 for married couples.