Democrats plan to cut blue-state taxes in a social welfare spending deal they plan to wrap up in the coming days.
A group of House Democrats is on the verge of forcing party leaders to include a repeal of a Trump-era tax deduction cap that largely affected wealthy, blue-state homeowners.
Democrats from New York, California, and other high-tax states have been pushing party lawmakers to repeal the $10,000 cap on state and local taxes, which has mostly affected wealthier households in blue states. The limit was instated as part of the Trump administration tax cuts to help offset the cost of the measure.
DEAL TODAY? PELOSI TELLS LAWMAKERS SPENDING ACCORD COULD COME TUESDAY
Democrats are now weighing a plan to roll back the cap as House and Senate lawmakers in favor of the repeal push for its inclusion in the $1.75 trillion spending package, which could be finalized as soon as Tuesday.
“I’m not gonna comment on any of the particular proposals that have been discussed, other than to reiterate my position that we do need to address the state and local tax deduction issue,” said House Democratic Caucus Chairman Hakeem Jeffries, a New York Democrat.
Democrats cannot afford to lose many party votes if they hope to pass the legislation with their thin majority. Some lawmakers have threatened to vote against the spending bill if it does not include language eliminating or mitigating the tax cap, which they argue has hurt middle-class families in cities with expensive housing and high taxes.
House Democratic proponents of the repeal have sported pins indicating, “No SALT, no deal. No SALT, no dice,” which is a warning to leadership that they will hold back their votes on the spending bill that Democrats and the Biden administration are desperate to pass.
A trio of Democratic lawmakers leading the SALT repeal effort issued a statement Tuesday afternoon that the negotiations are “encouraging.”
“The cap on the SALT deduction remains a punishing blow to our home states of New York and New Jersey as we work to recover from the pandemic and get our economies on strong footing and our constituents back to work,” Reps. Josh Gottheimer and Mikie Sherrill of New Jersey and Tom Suozzi of New York said.
Speaker Nancy Pelosi, a California Democrat, signaled earlier Tuesday that a full accord may be completed by the end of the day, including the text of the legislation.
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Democrats are hoping to pass the bill through the House and Senate by Thanksgiving.
