Seventeen of 19 House Democrats from New York said on Tuesday that they will oppose any federal tax legislation that maintains a cap on the state and local tax deduction.
In a letter addressed to House Speaker Nancy Pelosi and House Majority Leader Steny Hoyer urging both “to insist on full repeal” of the cap, the New York Democrats said they “reserve the right” to oppose any tax legislation that does not fully repeal the current $10,000 federal tax deduction limitation for state and local taxes.
“The full SALT deduction is a matter of fundamental fairness in avoiding double taxation of the same income and was a fundamental part of the income tax system since its inception in 1913,” the letter said. “Prior to passage of the limitation 2017, the SALT deduction was essential to New York and other progressive states.”
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Republicans put a cap on the deduction in the 2017 Tax Cut and Jobs Act in order to offset cuts and other changes that the bill made to the federal tax code. Leadership, including Rep. Kevin Brady, who chaired the House tax-writing committee at the time, was considering a repeal of the deduction altogether but eventually agreed to a cap, which hit those in high-tax states such as New York, New Jersey, and Illinois.
“Through the property and income taxes our constituents pay, the state provides expansive and comprehensive benefits to our neediest residents, excellent public education, and some of the best transportation infrastructure in the country,” the Tuesday letter said, defending New York’s tax rates.
New York’s two Democratic senators, Majority Leader Chuck Schumer and Sen. Kirsten Gillibrand, are also on record lobbying for a repeal of the cap. Schumer and Gillibrand introduced legislation in January that would repeal the cap starting in 2021.
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New York Reps. Alexandria Ocasio-Cortez and Kathleen Rice did not sign on to the letter.
