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Bipartisan Legislation to Fully Restore the SALT Deduction Introduced in House of Representatives

January 29, 2021

WASHINGTON – Rep. Garbarino joined six Members of Congress and introduced the SALT Deductibility Act, bipartisan legislation to restore the full State and Local Tax (SALT) deduction. The proposal would allow taxpayers to fully deduct their state and local taxes on their federal income returns. In 2017, the deduction was capped at $10,000 and resulted in a tax increase for many middle-class families.

Capping the SALT deduction resulted in double taxation by imposing a tax on taxes already paid. In high cost of living areas, the cap has continued to accelerate a race to the bottom that drives the wealthy to other states, often subsidized by the very states their new residents have left. This leaves middle-and lower-income taxpayers holding the bag to pay for school, police, fire, and other essential state and local services.

The repeal of the $10,000 cap on the SALT deduction has bipartisan support in the House of Representatives. In addition to Congressman Garbarino, original co-sponsors of the legislation include Congressman Suozzi (D-NY), Congressman Brad Schneider (D-IL), Congresswoman Young Kim (R-CA), Congressman Josh Gottheimer (D-NJ), Congressman Chris Smith (R-NJ), and Congressman Mondaire Jones (D-NY).

“The SALT cap unfairly penalizes Long Islanders and has left a devastating effect on New York. Not being able to deduct state and local income taxes is a case of double taxation, which is the last thing my constituents need during a global pandemic,” said Congressman Garbarino. “I’m pushing for a full restoration of the SALT deduction – Long Islanders deserve to be treated fairly and similarly to the rest of the country.”

“The cap on SALT deductions has been a body blow to New York families,” said Congressman Suozzi. “The full SALT deduction must be restored. Without the full SALT deduction, families will leave New York and the last thing we need in the midst of the health and economic devastation of COVID-19 is to lose our residents and taxpayers. Congress must act immediately.”

In addition to bipartisan support in the House of Representatives, a repeal of the SALT deduction is supported by state leaders and several national leaders including:

  • US Conference of Mayors
  • National Association of Counties
  • National League of Cities
  • International Association of Firefighters
  • National Association of Realtors
  • American Federation of Teachers
  • National Education Association
  • National Association of Police Organizations

"On behalf of the nation's mayors, I want to express our strong support for the Securing Access to Lower Taxes by Ensuring Deductibility Act (SALT Deductibility Act). This bipartisan proposal would repeal the $10,000 cap on federal income tax deductions for state and local taxes. Before the enactment of the cap in the 2017 Tax Cuts and Jobs Act, all state and local taxes were deductible, which recognized the autonomy of state and local tax systems and helped taxpayers avoid double taxation. Since its enactment, the cap has been harmful to moderate-income taxpayers in many states. And, during a time when the COVID-19 pandemic has imposed enormous hardship on state and local budgets, it is further undermining the ability of state and local governments to raise the revenue they need to support critical public services,” said Tom Cochran, CEO and Executive Director of the United States Conference of Mayors.

“Counties are on the front lines of the COVID-19 pandemic, supporting nearly 1,000 hospitals, more than 1,900 public health authorities and other services essential to residents’ safety and well-being. The human and financial impacts of addressing this health and economic emergency are staggering,” said National Association of Counties Executive Director Matthew Chase. “Repealing the state and local tax deduction cap would strengthen the ability of our counties and local communities to deliver essential public services, such as emergency response, public health, and infrastructure. We applaud Representatives Suozzi, Garbarino, M. Jones, C. Smith, Gottheimer, Y. Kim and urge bipartisan passage of this important legislation.”

Cities, towns and villages are encouraged by the introduction of the Securing Access to Lower Taxes by ensuring Deductibility Act, which bolsters a crucial local finance tool: State and Local Tax Deduction (SALT),” said Clarence Anthony, CEO and Executive Director, the National League of Cities. “The SALT deduction is critical for local governments, preventing additional strain on millions of middle-class families and helping cities raise revenues needed to make investments in infrastructure, public safety, and education. Especially now during the COVID-19 pandemic, the proposed repealing of the SALT deduction cap of $10,000 will help communities continue to support America’s economic recovery efforts.”

“Repealing the cap on state and local tax deductions will allow fire departments to have more budgetary freedom to focus on public safety needs. Current restrictions on SALT deductions have the potential to result in significant service reductions and negatively impact public safety in communities across America, said IAFF General President Schaitberger.  I thank Representatives Suozzi and Schneider for their leadership on this important issue and look forward to the full repeal of the SALT cap,” said Harold Schaitberger, General President, International Association of Fire Fighters.

“The 1.4 million members of the National Association of REALTORS®, thank you for introducing the “SALT Deductibility Act,” a bill to eliminate the limitation on the deduction for state and local taxes (SALT),” said Charlie Oppler, president of the National Association of Realtors.  “This legislation would significantly increase the tax incentives for purchasing and owning a home for millions of Americans.”

“Too many working families are hurting. The COVID-19 pandemic has exacerbated the glaring inequities in our economy – from housing and food insecurity to access to healthcare -- and state and local governments are struggling because of a fallout of revenues to maintain the services & support on which many of our communities rely. The Trump-era eviscerations on state and local income tax deductions is another hit on these families that are already struggling, and I applaud Rep. Suozzi for leading efforts to repeal the SALT cap and for introducing the SALT Deductibility Act. Families living in states and localities that invest in public services—including education, health care, and public safety should not be subject to unfair federal tax penalties. It’s long past time to repeal the SALT cap and end the financial pain it causes working families,” said AFT President Randi Weingarten.

NEA On behalf of our 3 million members and the 50 million students they serve, the National Education Association offers its strong support for the SALT Deductibility Act.  This legislation repeals the damaging cap on the SALT deduction that was included in the Tax Cuts and Jobs Act of 2017 that threatened states’ and local communities’ ability to fund essential public services, including schools.   We applaud the efforts of Reps. Suozzi and Schneider to ensure that all students have the opportunity they deserve for a well-rounded curriculum and support services that will cultivate their success and we urge Congress to approve the SALT Deductibility Act,” said Marc Egan, Director of Government Relations, National Education Association.

Throughout this country, law enforcement officers go to work every day with one goal in mind: to keep their communities safe. To achieve this mission, they receive support from the communities they serve, as public safety budgets across the country are largely drawn from state and local property, sales, and income taxes – essential investments that give our first responders the tools they need to get the job done. The state and local tax (SALT) deduction has helped support these vital investments at the state and local level.   Further, our members are not just first responders; they are also citizens of the communities in which they work. The fact is that the capping of the SALT deduction is a significant tax increase for many homeowners, including law enforcement officers. The cap must be repealed – for homeowners, for our communities, and for the first responders who work every day to keep those communities safe. NAPO thanks Representatives Suozzi, Schneider, Garbarino, Gotthiemer, Mondaire Jones, Christopher Smith, and Young Kim for their leadership and we look forward to working with them to see the cap repealed,” said Bill Johnson, Executive Director, National Association of Police Organizations.

“Counties have worked hard to maintain essential services while also protecting local taxpayers, but that work was undercut by the disastrous federal repeal of the State and Local Tax deduction,” said NYSAC President Jack Marren. “Counties stand in full support of this legislations and applaud Congressman Suozzi and members of the New York Delegation for leading the effort to restore fairness in the tax code and provide needed relief to the hardworking families in New York State who already send far more in taxes to the federal government than we get back.”