New York Democrats are pushing for the cap on native tax deductions to be lifted

More than a dozen New York Democratic lawmakers sent a letter to the leadership of the U.S. House of Representatives on Tuesday calling for a complete lifting of the cap on state and local tax deductions, undermining negotiations on the Biden administration’s proposed infrastructure plan Pressure continued.

The administration has asked to pay for its infrastructure package through tax increases for companies. A growing number of House Democrats say any proposed changes to tax law should include a full restoration of SALT deductions.

Republicans largely oppose the infrastructure proposal, and Democrats, who have a seven-seat advantage in the House of Representatives, can afford to lose few votes for legislation. This has given the growing group of lawmakers pushing for the SALT cap to be lifted a significant leverage in the negotiations on the infrastructure package.

“This problem is so critical to our state and our constituents that we reserve the right to take action against tax laws that do not include a complete lifting of the SALT restriction,” said the New York legislature’s letter from the New York City Legislature Street Journal viewed by The Wall. 17 members of Congress from the state signed the letter.

The Trump administration approved the $ 10,000 cap on SALT deductions as part of major tax changes in 2017. Previously, there was no cap on such deductions. The cap on deductions had a disproportionate impact on taxpayers in high-tax countries like New York, New Jersey, and California, while studies have shown that the Trump Tax Act resulted in a net tax cut for most taxpayers.