Legislation Reinstates Deduction Taken from Homeowners in 2017 GOP Tax Bill; Full House Vote Expected Next Week
Congressman Brian Higgins (NY-26) and his colleagues on the House of Representatives Committee on Ways and Means approved the Restoring Tax Fairness for States and Localities Act (H.R. 5377), legislation reversing the cap placed on State and Local Tax (SALT) deductions in the 2017 GOP tax package.
The legislation was sponsored by Tom Suozzi (NY-3).
“The limit on SALT deductions also undermines one of our country’s core values – that’s homeownership – as it limits the ability to deduct property taxes. The cap discourages hardworking families from purchasing a home, creating a community, and building a stable life,” Higgins argued during committee hearings.
“By placing a cap on the deduction, we compromise the American Dream, adequate public services, and a pathway to homeownership allowing hardworking Americans the opportunity to build a good and decent life. I support this legislation which is fully paid for, and I strongly urge my colleagues to do the same,” he argued.
Prior to implementation of the GOP Tax Bill, Higgins joined County Executive Mark Poloncarz in pointing out the impact elimination of the SALT deduction would have on Erie County residents, noting that the deduction was claimed by over 125,000 households in Erie County in 2015, with an average SALT deduction of $12,866, deducting a total of $1.62 billion in already-paid state and local taxes from their federal tax returns. In 2017, more than 338,800
Congressman Higgins stood in opposition to cutting the State and Local Tax deduction when it was first proposed in 2017, saying then, “In 1913 the 16th Amendment gave Congress the authority to enact federal income tax. At the same time, 104 years ago, they established that a local and state tax deduction was needed to protect local folks from a long, heavy reach of the federal government. The local and state tax deduction was a check in the federal authority to levy income taxes. It was to protect local taxpayers from double taxation in a federal money grab. Forty-five million Americans will lose this protection, costing $3,500 each. This bill will take away that protection and give the federal government the authority to double tax people to raise $1.5 trillion to fund tax cuts for American companies who are reaping record profits.”
Under H.R. 5377, the state and local tax deduction would increase for married couples from $10,000 to $20,000 in 2019 and be repealed entirely in 2020 and 2021. The bill is expected to come up for a vote before the full House of Representatives next week.