Key Senators Float SALT Break for Americans Earning Less Than $400,000
(Bloomberg) -- A second key lawmaker expressed openness to restoring the federal deduction on state and local taxes only for Americans earning less than $400,000, suggesting Senate Democrats are coalescing around the idea rather than providing the tax break in a broader way that would benefit the very rich.
New Jersey Senator Robert Menendez said Wednesday that a proposal circulating among House Democrats to remove the SALT deduction’s $10,000 for several years “doesn’t quite work for us.” Instead, something like what Vermont Senator Bernie Sanders floated on Tuesday -- getting rid of the SALT cap up to $400,000 of income -- would work, Menendez said.
“Something in that regard I think would be sellable, and would generate revenue we could use for other things,” Menendez said of Sanders’s idea.
Democrats are also looking at expanding the minimum income tax rates that some high earners will have to pay, a move that would help offset their benefits from a proposed expansion of the federal SALT deduction, according to a person familiar with the negotiations.
©2021 Bloomberg L.P.