Home Democrats suggest rising SALT cap to $72,500 by 2031

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Senator Bernie Sanders (I-VT) speaks to reporters on the Senate subway in Washington, DC on Tuesday November 2, 2021.

Kent Nishimura | Los Angeles Times | Getty Images

House Democrats have proposed increasing the federal withholding for state and local taxes from $ 10,000 to $ 72,500, according to a bill released by the rules committee, and the new limit would apply through 2031.

The $ 10,000 SALT cap has become a negotiating tool in the Democrats’ $ 1.75 trillion spending plan under certain high-tax jurisdictions such as New York and New Jersey.

Another proposal, a five-year repeal from 2021 to 2025 with reinstatement from 2026 to 2031, has been rejected by lawmakers on both sides of the aisle, including Senator Bernie Sanders, I-Vt.

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“At a time of massive income and wealth inequality, the last thing we should do is to give the very rich more tax breaks,” Sanders said in a statement.

“The Democrats fought and won with an agenda that calls for the very rich to finally pay their fair share, not one that gives them more tax breaks,” he said.

But Sanders is open to a compromise that “protects the middle class in high-tax countries,” such as the lifting of the SALT deduction limit for those below a certain income limit.

Senator Bob Menendez, DN.J., also announced the plan in a tweet, saying, “SALT proposals like five years off, five years later are gimmicks and would primarily benefit millionaires at the expense of middle-class families.”

However, according to an analysis by the Tax Foundation, 80% of the profits from the new proposal can still go to those who make more than $ 200,000, and those who make between $ 250,000 and $ 1 million can get the biggest tax break.

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