Senate Democrats aim to repeal rules blocking Trump tax law workarounds

Senate Democrats aim to repeal rules blocking Trump tax law workarounds
© Greg Nash

Senate Democrats announced Thursday that they are planning to force a vote in the near future on a resolution to repeal IRS rules aimed at blocking blue states' workarounds to the GOP tax law's cap on the state and local tax (SALT) deduction.

The vote will be part of a series of votes that Senate Democrats are planning to force on measures that would overturn Trump administration regulations, according to a news release from Senate Minority Leader Charles SchumerCharles (Chuck) Ellis SchumerBolton book alleges Trump tied Ukraine aid freeze to Biden investigations: NYT Trump legal team offers brisk opening defense of president Impeachment has been a dud for Democrats MORE (D-N.Y.) and Sen. Ben CardinBenjamin (Ben) Louis CardinTensions between McConnell and Schumer run high as trial gains momentum New Parnas evidence escalates impeachment witnesses fight Pressure building on Pelosi over articles of impeachment MORE (D-Md.).

The tax law that President TrumpDonald John TrumpTrump denies telling Bolton Ukraine aid was tied to investigations Former senior Senate GOP aide says Republicans should call witnesses Title, release date revealed for Bolton memoir MORE signed in 2017 imposes a $10,000 cap on the SALT deduction. Many politicians in high-tax, Democratic leaning states argue that the cap unfairly punishes their jurisdictions. However, most Republicans defend the cap, noting that most people even in high-tax states are getting a tax cut under Trump's law.


In an effort to circumvent the SALT deduction cap, some blue states passed legislation that was aimed at allowing residents to be able to convert state and local taxes into charitable contributions. But the Treasury Department and IRS issued final rules in June aimed at preventing these types of arrangements from working as ways to circumvent the SALT deduction cap, upsetting many Democratic lawmakers.

Schumer introduced a resolution in July to overturn the rules under the Congressional Review Act — a law that allows Congress to vote to disapprove of regulations within 60 legislative days of them being issued. Congressional Review Act resolutions can be placed on the Senate calendar for a vote with the signatures of 30 senators.

A spokesman for Schumer said that the exact date of the vote on the senator's resolution has yet to be determined but the deadline for it to occur is Oct. 24.

It's unlikely that the resolution will pass. While resolutions to overturn regulations only need a simple majority to pass, a majority of senators are Republicans and several Democratic senators have been regularly missing votes in recent months because they are running for president.

Several GOP House members from blue states voted against Trump's tax law because of concerns about the SALT deduction cap, but no Republican senator voted against the final version of the tax law.

New York, New Jersey and Connecticut filed a lawsuit in July challenging the IRS rules on workarounds to the SALT deduction cap.

Those three states, along with Maryland, also filed separate a lawsuit last year challenging the $10,000 cap itself, but a federal district judge recently dismissed that case. The states are considering appealing the judge's ruling.