Schumer, Suozzi introduce invoice to revive SALT deduction within the now democratically managed Congress

0
127
Schumer, Suozzi introduce bill to restore SALT deduction in the now democratically controlled Congress

With Democrats now in control of both Houses of Congress and the White House, Senate Majority Leader Chuck Schumer and Rep. Thomas Suozzi reintroduced legislation to restore full state and local tax withholding. That would lower taxes for thousands of Long Island homeowners, Newsday has exclusively learned.

Legislators also passed a bill on Thursday that lifts the $ 10,000 SALT cap on federal tax returns introduced under the GOP’s 2017 Tax Reform Act of $ 1.5 trillion. No further changes to the tax code will be made with the new invoice.

The move, which is backed by both parties in the House of Representatives but only backed by Democratic sponsors in the Senate, is likely to be included in a “must-pass” law like a COVID-19 relief package to ensure its approval, officials said.

“This has a very high priority,” said Schumer. “The SALT withdrawal cap was a nasty proposal targeted at blue states and has hurt the middle class on Long Island and elsewhere quite badly.”

Removing the cap is crucial as the economy struggles to recover from the coronavirus pandemic.

“This is another way to pump money into our economy,” he said.

Suozzi, a Democrat from Glen Cove and one of the loudest supporters of restoring the full SALT withdrawal, said his district, which includes parts of Nassau, Suffolk and Queens, has been particularly hard hit by the cap.

Sign up to receive The 1600

Get an inside look at the White House and what goes on in the Donald Trump administration.

By clicking on Register, you agree to our privacy policy.

About 53% of residents in Suozzi’s third district previously used the withholding, writing off an average of $ 33,317 per year – the highest in the country, according to IRS data.

“This is hugely important to my constituents, and hugely important to New York State as a whole,” said Suozzi, who sits on the Ways and Means Committee that is drafting changes to tax law that is likely to revive the withdrawal. “A lot of people are leaving New York between the coronavirus and the loss of the salt drain. And the people who still live here are stuck holding bags.”

Under the old tax laws, taxpayers who included deductions on their federal income tax returns could deduct state and local property and wealth taxes, as well as either income taxes or general sales taxes.

On Long Island, nearly 736,000 households – or more than 80% of all homeowners – had claimed SALT deductions of more than $ 20,000.

The Democratic-run House passed a law to lift the cap in 2019, but the move was blocked by the Senate, which was controlled by Republicans at the time.

Legislators said the move had a better chance of success as the Senate was now split 50% between Democrats and Republicans and ties were cut by Democratic Vice President Kamala Harris. President Joe Biden has expressed support for the cap being lifted.

But Suozzi says it will be an “uphill battle” to get support for the bill, and that it may come down to finding compensation for the lost revenue, possibly by increasing income tax rates for high earners.

Freshman MP Andrew Garbarino (R-Bayport), a GOP co-sponsor of the bill, said the “cap wrongly punishes Long Islanders and has wreaked havoc on New York. Not being able to state and Deducting local income taxes is one. ” Double taxation case is the last thing my constituents need during a global pandemic. “

The bill is also co-sponsored by Rep. Lee Zeldin (R-Shirley).

However, other Republicans claim the SALT deductions are primarily for high earners in high-tax and predominantly blue states.

The Empire Center for Public Policy, a conservative think tank, concluded that New Yorkers were still 2.4% less in federal income taxes – or $ 3.3 billion – in 2018 compared to pre-tax reform years – have paid, which is partly due to the extended standard deduction and the tax reform the distribution of the interest rate cuts in the bill.

Under the current tax law, the State Department of Taxation and Finance estimated that New York households will pay additional income taxes of $ 12.3 billion, and the SALT cap could hit taxpayers through the loss of economic activity by 2025 State cost the US up to $ 15 billion a year.

“Without the full SALT deduction, the next generation of Long Islanders will struggle to buy their first homes and others will be forced to move out of the state,” said Kyle Strober, executive director of the Association for a Better Long Island, an advocacy group .

Robert Brodsky is a breaking news reporter who has been with Newsday since 2011. He is a graduate of Queens College and American University.