Rep. Lowey, NY State leaders urge Congress to eliminate SALT cap


U.S. Rep. Nita Lowey (D-NY), along with New York State leaders, are urging the House Committee on Ways and Means to eliminate the cap on the state and local tax (SALT) deduction.

© Shutterstock

The cap was instituted as part of the Tax Cuts and Jobs Act of 2017. Before that, New York taxpayers could deduct their state and local property and income taxes. The SALT deduction was a major relief for high-taxed states like New York, where 35 percent of taxpayers deduct an average of more than $22,000 every year.

The Tax Cuts and Jobs Act (TCJA), however, capped the SALT deduction at $10,000.

“Simply put, the cap on SALT deductions is an insult to New York’s residents and businesses that send more revenue to the federal government than our state receives back in federal support,” Lowey said. “Specifically, the Tax Cuts and Jobs Act (TCJA)’s cap unfairly burdens Westchester and Rockland taxpayers, who in 2017 ranked numbers one and two for highest average property taxes in the country. Seventeen months after enactment, the TCJA is not paying for itself, as many Republicans promised, and it is not boosting the economy. Outside of these disturbing but not surprising developments, taxpayers in states like New York are struggling to manage serious ramifications from the $10,000 cap on the SALT deduction.”

Lowey, along with Westchester County Executive George Latimer; Town of North Castle Supervisor Michael Schiliro; and the Hudson Gateway Association of Realtors (HGAR) submitted written testimony to the Ways and Means asking for the cap to be eliminated.

“As municipal government and school district leaders work to meet community needs in a fiscally responsible way, we would appreciate the partnership of the federal government, not the imposition of double taxation,” Latimer said. “As the County Executive for Westchester County New York, I want to express my strong opposition to the federal limits on SALT deductions, and my strong support for the repeal of this limitation. In Westchester County, more than 47 percent of residents itemize their federal tax deductions with an average of $34,300 in deductions, well above both the cap and the new standard deduction. However, federal law now caps the SALT deduction at $10,000. This results in double taxation on the same income, and effectively raises taxes on thousands of middle-class and working families in Westchester who depended on the deduction.”

Lowey introduced a bill earlier this year with Rep. Peter King (R-NY) to eliminate the SALT cap.

“The SALT deduction caps have been felt in our community, and time will tell how that will impact future investment and renovations in single-family homes,” Schiliro said. “There has been continued downward pricing pressure on all segments of the existing housing market, as buyers know that the deductibility of real estate taxes is now extremely limited, if not eliminated.”

The post Rep. Lowey, NY State leaders urge Congress to eliminate SALT cap appeared first on Financial Regulation News.