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.

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.

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.) 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 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 (D-Ill.) 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 (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.