Democrat Says He Will Oppose Any Biden Tax Plan Without SALT Fix

A New York Democrat said he won’t back any tax increases that President Joe Biden proposes to pay for infrastructure legislation unless there is also a repeal of the $10,000 cap on state and local tax deductions.

“No SALT, no deal,” Representative Tom Suozzi said in a statement Monday. “I am not going to support any change in the tax code unless there is a restoration of the SALT deduction.”

Repealing the $10,000 cap on SALT write-offs, is a top priority for several members of Congress representing high-tax states including New York, New Jersey and California, who say that their voters have been hurt by the limits on the tax break.

Removing the cap, which would cost the federal government tax revenue, could become a key area of contention as Democrats seek to raise levies on corporations and the wealthy to pay for a bevy of infrastructure, health care and social programs. Republicans are set to oppose any tax hikes, and Democrats have only narrow control in both the House and Senate, so any dissent in their ranks could imperil legislation.

In addition to costing $88.7 billion a year -- revenue that some Democrats would like to direct elsewhere -- doing away with the SALT cap is a politically difficult issue for some members of Congress, because more than half the benefits flow to households earning more than $1 million a year, according to the Joint Committee on Taxation.

However, the issue has support from key members of Congress and the Biden administration. Senate Majority Leader Chuck Schumer, a New York Democrat, also supports the effort. He sponsors the Senate companion to Suozzi’s legislation to repeal the cap. Treasury Secretary Janet Yellen also told a congressional panel earlier this month that the SALT deduction limit causes “disparate treatment” among taxpayers and said she would work with lawmakers to resolve the issue.

The $10,000 limit on SALT deductions was instituted in President Donald Trump’s 2017 tax overhaul and Democrats have repeatedly tried to repeal the change, but were blocked in a Republican-controlled Senate. Democrats are now considering the infrastructure legislation that Biden is set to unveil later this week as a possible vehicle to which the SALT provision could be attached.

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