Some lawmakers from high-tax blue states want to repeal the $10,000 cap on state and local tax deductions imposed by the Tax Cuts and Jobs Act, but according to the Joint Committee on Taxation, doing so would provide a sizable benefit to wealthy taxpayers.
In a report released Monday, JCT said that eliminating the SALT cap would lower the tax burden on the roughly 600,000 households earning more than $1 million a year by a total of $40 billion. That’s 52% of the $77.4 billion in tax breaks that would be restored with a repeal of the SALT cap. Households earning more than $200,000 a year would claim 92% of the restored tax break, JCT said.
The House Ways and Means Committee will hold a hearing this week on how the SALT cap has affected middle-income taxpayers and local school districts. Some House Democrats are pushing for legislation to raise or even eliminate the cap, but no changes are expected anytime soon, since Senate Finance Committee Chairman Chuck Grassley has said he does not plan to address the issue.