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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 PascrellTalk of self-pardon for Trump heats up House Democrats urge congressional leaders to support .1B budget for IRS Press: Trump's biggest fear is — lock him up MORE (D-N.J.) and Sen. Bob MenendezRobert (Bob) MenendezSenate to vote next week on blocking Trump's UAE arms sale Judge whose son was killed by gunman: 'Federal judiciary is under attack' Emergency housing assistance for older adults needed now 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 CastenChamber-backed Democrats embrace endorsements in final stretch The Hill's Campaign Report: Buzz builds around Warren for VP Gun control group rolls out House endorsements MORE (D-Ill.) and Lauren UnderwoodLauren UnderwoodOvernight Health Care: Biden asked Fauci to serve as chief medical adviser | COVID-19 relief picks up steam as McConnell, Pelosi hold talks | Rhode Island Gov. Raimondo says she won't be Biden's HHS secretary Leadership changes at top cyber agency raise national security concerns Trump's cyber firing stirs outrage 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.