White House threatens to veto bill to temporarily repeal SALT deduction cap

White House threatens to veto bill to temporarily repeal SALT deduction cap
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The White House on Wednesday threatened to veto a bill from House Democrats to temporarily repeal a provision in President TrumpDonald John TrumpFederal prosecutor speaks out, says Barr 'has brought shame' on Justice Dept. Former Pence aide: White House staffers discussed Trump refusing to leave office Progressive group buys domain name of Trump's No. 1 Supreme Court pick MORE's 2017-tax cut law.

The House is expected to vote on Thursday on a bill that would scrap for two years the tax law's $10,000 cap on the state and local tax (SALT) deduction, according to a senior Democratic aide. The bill would eliminate the cap for 2020 and 2021, as well as increase the cap to $20,000 for married couples for 2019.

The bill is a top priority for Democrats in high-tax states — such as New York, New Jersey and California — who argue that the SALT deduction unfairly punishes residents of their states and will make it harder for their states to provide public services.

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But Trump's Office of Management and Budget (OMB) said in a statement that "this legislation would unfairly force all Federal taxpayers to subsidize a tax break for the wealthy, as well as excessive government spending by fiscally
irresponsible States." 

The White House also took issue with the provision in the bill that would raise the top individual tax rate from 37 percent to its pre-GOP tax law level of 39.6 percent. This provision "would stifle economic growth by placing an undue burden on thousands of small businesses," OMB said.

Democrats said they included this provision in their bill to offset the cost of their proposed changes to the SALT deduction and to limit the bill's benefits to high earners.

The Democrats' bill is expected to pass the House on a largely party line vote, but it's not expected to get a vote in the Republican-controlled Senate.