Schneider Unveils Plan to Reinstate SALT Deduction
WASHINGTON – Rep. Brad Schneider, D-Ill., revealed plans to fully repeal the cap on the state and local tax deduction that was included in the Republican-backed Tax Cuts and Jobs Act of 2017.
The state and local tax deduction, also known as the SALT deduction, permits taxpayers who itemize their federal taxes to deduct particular taxes by state and local governments, according to the Tax Foundation.
Schneider declared the plan Wednesday to be one of his top Congressional priorities at an event in his district. He characterized the capping of the SALT deduction as an “effective double tax” that disproportionately affects families and small business owners.
“I am committed to ending the double taxation on Illinois families by restoring the full SALT deduction. In the current Congress, I’ve been an effective leader in the fight to restore SALT,” Schneider said in a statement. “In the next Congress, I will continue to work to restore tax fairness for Illinois residents, putting more money in their pockets and increasing home values.”
Illinois is known as a “donor state,” meaning it contributes more money to the Federal Government than it gets back, Schneider noted at the event. More than 40% of Schnieder’s constituents are impacted by the cap.
Schneider noted the Congressional Budget Office estimated the Tax Cuts and Jobs Act will increase the federal deficit by $1.9 trillion between 2018 and 2028. In Dec. 2019, a bipartisan bill by Schneider that would restore the full SALT deduction passed through the House but was stifled once it reached the Republican-controlled Senate.
Schneider said the deduction’s cost would be paid for by restoring the top tax rate to 39.6%, a rate lowered by the Tax Cuts and Jobs Act. Democratic candidate for president and former Vice President Joe Biden released his proposed tax plan which, Schnieder noted, would not raise taxes for people making under $400,000 per year.
“As the mayor of Fox Lake and President of the Lake County Municipal League, it is my duty to represent the diverse needs of Lake County citizens and local governments,” Fox Lake Mayor and Lake County Municipal League President Donny Schmit said in a statement. “Our residents, many of whom are small business owners and essential workers, have been hit hard by the coronavirus.”
Schmit continued in his statement, “Incomes have been reduced, jobs have been eliminated, and families are struggling to make ends meet, now more than ever. By eliminating the cap on the state and local tax deduction, and reinstating a full deduction, we can better serve our residents and bring much needed financial relief.”
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