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Democratic lawmakers appeared close to a deal on the so-called “salt” cap on federal tax deductions for state and local taxes on Tuesday, in a victory for House moderates from the wealthiest states who have long denounced politics.

Donald Trump’s 2017 tax reforms limited the amount that households could deduct from local and state property taxes from their federal income tax to $ 10,000, which affected homeowners in states where local and state property taxes are high, like New York, New Jersey and California. . Critics accused the then president of unfairly punishing voters in “blue” states who voted against him in 2016.

A small group of House Democrats, led by Josh Gottheimer of New Jersey, led efforts to include a reversal of tax changes in President Joe Biden’s “Build Back Better” plan, threatening to withhold support for the bill wider unless the cap is removed. . But progressive critics opposed the move, saying it would disproportionately benefit wealthy Americans.

Lawmakers appeared to be close to reaching a deal to remove the five-year cap on Tuesday. Capitol Hill Democrats are now considering a five-year suspension of the cap, until 2025, applied retroactively to include the current tax year, according to a person briefed on the negotiations.

Gottheimer released a joint statement Tuesday with fellow New Jersey Democrat Mikie Sherrill and New York Democrat Tom Suozzi, saying the cap “remains a blow to our home states.” . . as we strive to recover from the pandemic and put our economies back on solid footing and get our constituents back to work ”.

“Today’s news is encouraging for the inclusion of a repeal of the salt cap in the final reconciliation package,” they added, saying they would “continue to work” with Democrats in the House. and in the Senate on the matter.

But it remained unclear whether the 50 Democratic senators would support such a move. Bernie Sanders, the progressive senator from Vermont, released a scathing statement Tuesday night saying that “the last thing we should do is give more tax breaks to the very rich.” Sanders said he was “open to a compromise approach” to protect the “middle class in high tax states”, but added: “I will not support more tax breaks for billionaires.”


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