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Lawmakers offer bill to repeal cap on SALT deduction

Lawmakers offer bill to repeal cap on SALT deduction
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Lawmakers in the House and Senate from high-tax, Democratic-leaning states introduced legislation on Thursday to repeal a provision in former President TrumpDonald TrumpUS gives examples of possible sanctions relief to Iran GOP lawmaker demands review over FBI saying baseball shooting was 'suicide by cop' House passes bill aimed at stopping future Trump travel ban MORE's 2017 tax cut law that limits the state and local tax (SALT) deduction.

The bill's introduction comes amid a push from a number of blue-state lawmakers for a rollback of the cap to be included in coronavirus relief legislation.

“The full SALT deduction must be restored," Rep. Thomas Suozzi (D-N.Y.), the lead sponsor of the House version of the bill. "Without the full SALT deduction, families will leave New York and the last thing we need in the midst of the health and economic devastation of COVID-19 is to lose our residents and taxpayers. Congress must act immediately.”

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Suozzi's bill is co-sponsored by six lawmakers from high-tax states, including Republicans Chris SmithChristopher (Chris) Henry SmithThe Hill's Morning Report — Presented by Facebook — Biden delivers 100 million shots in 58 days, doses to neighbors The eight Republicans who voted to tighten background checks on guns House approves bills tightening background checks on guns MORE (N.J.), Andrew Garbarino (N.Y.) and Young Kim (Calif.).

Senate Majority Leader Charles SchumerChuck SchumerOn The Money: Yellen touts 'whole-of-economy' plan to fight climate change | Senate GOP adopts symbolic earmark ban, digs in on debt limit Hillicon Valley: Tech companies duke it out at Senate hearing | Seven House Republicans vow to reject donations from Big Tech Lawmakers reintroduce bill to invest billions to compete with China in tech MORE (D-N.Y.) introduced a version of the bill in the Senate, which is co-sponsored by Democratic senators from New York, New Jersey and Illinois, along with incoming Senate Finance Committee Chairman Ron WydenRonald (Ron) Lee WydenHillicon Valley: Tech companies duke it out at Senate hearing | Seven House Republicans vow to reject donations from Big Tech Overnight Energy: Biden will aim to cut US emissions in half by 2030 | Oil and gas leasing pause on public lands will last at least through June Senate Democrats introduce bill to reform energy tax credits MORE (D-Ore.).

The 2017 tax law capped the SALT deduction at $10,000. Politicians from high-tax states have been opposed to the cap, arguing it hurts their residents and limits their states' abilities to provide robust public services. But Republicans, as well as some left-leaning tax experts, are defending the cap on the deduction, saying that repealing it would primarily benefit high-income taxpayers.

The House passed two coronavirus relief bills last year that included a temporary repeal of the SALT deduction cap, but those weren't taken up by the Senate. The New Jersey House delegation on Wednesday urged congressional leaders and the Biden administration to include repeal in the next relief package.

It could be challenging for lawmakers to get a repeal of the cap included in a relief package this year, since Republicans and some centrist Democrats want to limit the price tag of a stimulus measure. 

Repeal of the SALT deduction cap was not included in a $1.9 trillion proposal floated by President Biden. Treasury Secretary Janet YellenJanet Louise YellenOn The Money: Yellen touts 'whole-of-economy' plan to fight climate change | Senate GOP adopts symbolic earmark ban, digs in on debt limit Overnight Energy: Biden will aim to cut US emissions in half by 2030 | Oil and gas leasing pause on public lands will last at least through June National childcare policy is pro-entrepreneurship and pro-growth MORE said during her confirmation hearing that she wants the department to study the impact of the cap on state and local governments before taking a position on the cap.