On Thursday, Democrats on the House Ways and Means Committee reached an agreement on legislation which would restore a state income tax deduction that was reduced in the 2017 Republican tax law. “An agreement on the outline of a plan” was reached, according to House Ways and Means Select Revenues Measures Subcommittee Chairman Mike Thompson (D-Napa), on legislation to reverse Republicans’ repeal of the State and Local Tax (SALT) deduction.
The bill, HR 2624, would raise the SALT cap for individuals to $12,000 and to $24,000 for married couples. Introduced by Representative Mikie Sherrill (D-New Jersey), the “SALT Relief and Marriage Penalty Elimination Act” has three cosponsors including Representative Gil Cisneros (D-Orange County).
HR 2624 would offset the lost revenue from the SALT deduction by raising the individual and corporate rates from their post-tax cuts level. The bill has two Republican cosponsors from the State of New York (Representatives Elise Stefanik and Peter King) but the majority of Republicans are expected to oppose legislation that would repeal their landmark tax reform. Senate Finance Committee Chairman Chuck Grassley (R-Iowa) has indicated in the past he is opposed to restoring the SALT deduction.
The compromise among committee Democrats is a sign of progress for supporters of the SALT deduction, but a complete repeal of Republican reforms will be difficult to enact unless Democrats claim a majority in both the House and Senate in 2020.