House passes bill to restore 'SALT' tax benefits - Times Union

WASHINGTON — The U.S. House of Representatives narrowly passed legislation Thursday designed to repeal a cap on state and local tax (SALT) deductions that blue, high-tax states including New York, New Jersey and Connecticut have been decrying since it was instated in the 2017 Republican tax law.

The bill is not expected to receive a vote in the Senate and the White House threatened a veto of the legislation Thursday.

Two New York Republicans, U.S. Reps. John Katko of Camillus and Peter King of Seaford, joined Democrats voting in favor of the legislation, which would eliminate a $10,000 cap on SALT deductions for two years, along with Brian Fitzpatrick, R-Penn. The final tally was 218-206.

Gov. Andrew M. Cuomo urged New York lawmakers to support the bill before the vote. He later applauded its passage.

"The Trump administration's SALT policy was a politically motivated economic assault on New York," Cuomo said. "New Yorkers are sick and tired of being used as ATMs, footing an additional $15 billion each year that will be redistributed to red states and big corporations."

A total of 52 of New York's 62 counties had average SALT deductions above $10,000, and the average New York taxpayer had SALT deductions that are more than twice the $10,000 cap, according to a report by the governor's office.

New York has the largest percentage of taxpayers getting a tax hike of any state, the report added.

If signed into law, the bill would eliminate the SALT cap for 2020 and 2021, and increase the cap to $20,000 for married couples for 2019. To offset this revenue loss, the bill that would raise the top individual tax rate from 37 percent to its pre-GOP tax law level of 39.6 percent.

On the House floor, Republicans forced an amendment to the bill that redirects the benefits of eliminating the cap for those earning more than $100 million. The savings from that change would be used to double a tax deduction for teachers and firefighters on supplies. The amendment was widely approved.

U.S. Reps. Paul Tonko, D-Amsterdam, and Antonio Delgado, D-Rhineback, voted in favor of the legislation.

“Working people in upstate New York are paying too much in taxes already, and the 2017 Republican tax law creates double taxation for middle and working class families while adding more than a trillion to the deficit,” Delgado said.

U.S. Rep. Elise Stefanik, R-Schuylerville, voted against the bill.

"It only has a short-term restoration of the state and local tax deduction," she said. "I want a permanent restoration of the state and local tax deduction because I view it as double taxation."

She added, "I pledged to my constituents that I would never vote for a tax hike. This bill includes a tax hike on the top rate that would impact small business owners and manufacturers."

Gov. Andrew Cuomo speaks during an announcement that Schenectady will receive $10 million from the state for the revitalization of its downtown district on Tuesday, Nov. 5, 2019, at Proctors Theatre in Schenectady, N.Y. The money was awarded to the city through the fourth round of the state's Downtown Revitalization Initiative, which invests annually in 10 plans across the state that are intended to turn around local communities. (Will Waldron/Times Union)

President Donald Trump's Office of Management and Budget said in a statement Thursday that "this legislation would unfairly force all federal taxpayers to subsidize a tax break for the wealthy, as well as excessive government spending by fiscally irresponsible states."

In September, a federal judge rejected a lawsuit from New York, Connecticut, Maryland and New Jersey to overturn the 2017 tax law's SALT cap. New York is appealing that decision.

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House passes bill to restore 'SALT' tax benefits - Times Union
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