Congress

Last-Minute House Democrat Plan Bumps State and Local Tax Cap to $80,000 Through 2030

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  • House Democrats late Thursday altered their spending package by changing the deduction limit on state and local taxes to $80,000 through 2030.
  • The proposed write-off may primarily benefit higher earners, according to the Tax Policy Center.

House Democrats late Thursday altered their spending package by changing the limit on state and local taxes, known as SALT. 

The new plan would boost the cap to $80,000 from $10,000 a year through 2030, and the $10,000 limit would return in 2031, according to the amendment — a $7,500 hike and a one-year term decrease from Wednesday's proposal.

"We have been fighting this unfair, targeted tax since its inception in 2017," said Reps. Josh Gottheimer, D-N.J.; Tom Suozzi, D-N.Y.; and Mikie Sherrill, D-N.J., said in a joint statement.

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"This agreement to address the cap on our state and local tax deduction will effectively eliminate the undue burden for nearly all of the families in our districts who've been unfairly double taxed for the last four years," they said.

However, opponents had already pushed back on Wednesday's plan for a $72,500 limit, saying the write-off may primarily benefit higher earners.

Only 1.6% of middle-income families earning between $54,000 and $96,000 would see a benefit by increasing the cap to $72,500 in 2021, according to a Tax Policy Center analysis, with an average tax cut of $20.

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