SALT Cap Gets Another Boost in Latest Talks on Biden Agenda
(Bloomberg) -- House Speaker Nancy Pelosi has signed off on a change to the state and local tax deduction provisions in President Joe Biden’s $1.75 trillion economic agenda as she hunts for votes to squeak the bill through the House.
Instead of moving forward with a proposal to lift the $10,000 cap on state and local tax deductions to $72,500 through 2031, the bill will now raise it to $80,000 through 2030 according to a person familiar with the negotiations.
The cap would snap back to $10,000 in 2031. Compared to current law where there is no cap after 2025, the provision would raise $14.8 billion in revenue over 10 years.
The change came as key northeastern Democrats like New Jersey’s Josh Gottheimer balked at the lower cap. Pelosi cannot lose any more than three Democratic votes and still pass Biden’s agenda amid unified Republican opposition.
The Senate is expected to make changes to the SALT proposal. Senator Bernie Sanders of Vermont and Senator Bob Menendez of New Jersey, both Democrats, have proposed an unlimited cap but would cut off access to the deduction for people with incomes above $400,000 to $500,000.
Senator Elizabeth Warren said earlier Thursday she isn’t yet sold on compromises offered so far to partly restore the state and local tax deduction because of her concern billionaires could benefit.
“I didn’t come here to help billionaires cut their taxes,” Warren, a Massachusetts Democrat, told reporters on Thursday. “I want to see what it does for the billionaires. I’m not here to help those guys.”
All 50 senators who caucus with Democrats must support the legislation for it to pass that chamber.
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