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In Win for Northeast Centrists, SALT Relief Included In Spending Bill

November 5, 2021 by Dan McCue
A single-family home in suburban Long Island, New York. (Photo by Dan McCue)

WASHINGTON — House Democrats agreed late Thursday night to modify the $1.85 trillion reconciliation bill to include a provision raising the cap on the state and local tax deduction from $10,000 to $80,000.

The measure, also known as the Build Back Better Act, is expected to be put up for a vote on the House floor on Friday and the inclusion of SALT is a major victory to the Centrist Democrats — Reps. Josh Gottheimer and Mikie Sherrill, both of New Jersey, and Tom Suozzi, of New York — who fought for it.

The new version of the provision would keep the new, elevated cap in place through 2030 when it is then set to return to $10,000 for 2031.

An earlier version of the bill would have set the cap at $72,500 through 2031.

The fate of the SALT deduction appeared to be touch and go for weeks.

Shortly before Halloween, Sherrill tweeted, “I’ve been clear from the beginning: no SALT, no deal.”

And days later, Gottheimer weighed in with “No SALT, no dice!”

Their opposition to the bill along with that of Suozzi and other lawmakers from New York, New Jersey and Connecticut, would have been enough to kill the reconciliation package given the razor slim majority the Democrats hold in the chamber.

On Tuesday, Senate Budget Committee Chairman Bernie Sanders, I-Vt., weighed in, saying he found a proposal then on the table — repealing the $10,000 cap through 2025 — “beyond unacceptable.”

“At a time of massive income and wealth inequality, the last thing we should be doing is giving more tax breaks to the very rich. Democrats campaigned and won on an agenda that demands that the very wealthy finally pay their fair share, not one that gives them more tax breaks,” Sanders said.

“I am open to a compromise approach which protects the middle class in high tax states. I will not support more tax breaks for billionaires,” he said.

Democrats need all 50 members of their Senate caucus to support the bill in order to pass it under the budget rules that let them avoid a GOP filibuster. 

That gives Sanders a window to either demand the SALT proposal is changed again or dropped entirely.

Earlier this week, Sanders and Sen. Bob Menendez, D-N.J., proposed leaving the cap at $10,000 but exempting taxpayers with incomes under a level between $400,000 and $550,000.

The Well News reached out to Sen. Sanders’ office Friday morning in an effort to find out what he thinks of the latest proposal.

Despite the reservations expressed by Sanders, Gottheimer remained confident throughout the SALT debate.

“I believe, based on every single conversation that I’ve had with leadership, my Senate colleagues, and the White House, that SALT will be in the bill. They know they don’t have the votes without it,” he said earlier this week.

On Thursday night, the three Centrists issued a statement on the House agreement to include SALT relief in the Build Back Better Act:

“We have been fighting this unfair, targeted tax since its inception in 2017,” they said. “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. 

“This fix will put money back in the pockets of hardworking, middle class families in our districts and help ensure that our local communities can continue making the investments that we need,” they continued. “We’re confident that with this agreement, we can move forward on this crucially important package and we will continue working to ensure that this tax cut gets signed into law to deliver this relief to our constituents as soon as possible.”

Dan can be reached at [email protected] and at https://twitter.com/DanMcCue.

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