House bill to temporarily repeal SALT deduction cap to get floor vote

An IRS tax form.

The House is expected to hold a floor vote next week on a bill to temporarily repeal the GOP tax law’s cap on the state and local tax (SALT) deduction, allowing Democrats from high-tax states to take action on one of their top priorities before the end of the year.

The House Rules Committee announced late Thursday afternoon that it would meet on Monday to discuss the rule for the House floor vote.

The planned vote will come after the House Ways and Means Committee approved the bill on a near-party-line vote on Wednesday. The vote would also come ahead of the two-year anniversary of the GOP tax law’s enactment.

The bill is expected to pass the House but is not expected to receive a vote in the Republican-controlled Senate.

President Trump’s 2017 tax-cut law capped the SALT deduction at $10,000. The bill that the House is slated to take up would increase the cap to $20,000 for married couples for 2019 and repeal the cap for 2020 and 2021.

The bill also would increase a deduction for educators’ expenses and create a deduction for first responders’ expenses. And it would raise the top individual tax rate from 37 percent to 39.6 percent for 2020 through 2025 to pay for the other tax changes in the bill. After 2025, nearly all of the tax provisions affecting individuals in Trump’s tax law expire.

The bill is one of many notable votes that the House is expected to take next week, including votes on government-funding legislation, a trade agreement with Canada and Mexico and most notably on articles of impeachment against Trump.

Addressing the cap on the SALT deduction is a big issue for Democrats from high-tax states such as New York, New Jersey and California. Many freshman Democrats who flipped GOP-held seats in the 2018 elections had made the cap a key issue of their campaigns. Democratic lawmakers argue that the cap hurts their residents and makes it harder for their states to provide public services.

A small number of GOP lawmakers from high-tax states also have concerns about the SALT deduction cap. 

But most Republicans defend the cap, arguing that it helps to prevent the tax code from subsidizing higher state taxes. They also argue that most residents of high-tax states are getting a tax cut under the 2017 law and that repealing the SALT deduction cap would benefit the wealthy. 

The bill has also been criticized by a number of liberal think tanks, who also argue that the legislation would largely help high-income taxpayers.

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