WASHINGTON – More than 30 House members – including Rep. Brian Higgins, a Buffalo Democrat – have banded together to try to fully restore the state and local tax deduction that congressional Republicans capped at $10,000 in their 2017 tax overhaul.
But the new "Bipartisan SALT Caucus" is by no means united in how far it will go to press for the change it demands. At a press conference Thursday, some members said they would not support President Biden's coming infrastructure bill unless it fully restores the SALT deduction.
"You know, I've said before: No SALT, no deal," said Rep. Tom Suozzi, a Long Island Democrat and a co-chair of the caucus.
But Higgins said he wouldn't go that far.
"This is a negotiation that's just beginning, and I think there's a tendency to forget sometimes that Congress holds all the cards here," Higgins said. "I think that there is a way to negotiate concurrently a lot of different things. I think the infrastructure bill is so important to Buffalo and Western New York that it has to get passed."
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There's no doubt, though, that metro Buffalo has a huge stake in the SALT debate as well. According to figures that Higgins obtained from County Executive Mark C. Poloncarz's office, approximately 125,000 Erie County households suffered a tax increase because of the limit placed on the SALT deduction, with the average increase reported at $815 a year.
"This is an increase in property taxes that was imposed, really, by the federal government," Higgins said. "It's having a major impact."
Residents of the New York City metro area and Long Island, along with residents of New Jersey, California, Illinois and other high-tax, high-wage states, saw even higher tax increases, according to lawmakers from those regions who detailed those tax hikes at Thursday's news conference.
Suozzi and the other caucus leaders didn't clearly indicate how many of its members would be willing to withhold their votes for Biden's infrastructure plan if they don't get the deduction restored. But members of the caucus made clear that they agree on one thing.
"Restoring the SALT tax deduction is huge, not just for my district, but for all of the country," said Rep. Andrew Garbarino, a Long Island Republican. "It's something that it's not a thing about helping billionaires and millionaires. It's about helping the middle class – in my district, teachers, firemen, cops, small business owners."
The press conference came a day after 17 Democratic members of the New York House delegation, including Higgins, sent Speaker Nancy Pelosi a letter ending in a not-so-veiled threat.
"We will not hesitate to oppose any tax legislation that does not fully restore the SALT deduction," the lawmakers wrote.
Pelosi herself has been sympathetic to the idea of repealing the SALT deduction. Asked about adding the provision to President Biden's infrastructure plan, Pelosi told reporters earlier this month: "Hopefully, we can get it into the bill.”
And at a briefing Wednesday, White House Press Secretary Jen Psaki said Biden administration officials were open to hearing from lawmakers intent on restoring the SALT deduction.
"As you know, the SALT deduction would not be a revenue raiser, so they may come with proposals and ideas on that as well," she said. "But we're certainly happy to hear more from them on the impact and why they think this is so important to their states and communities."
Fully restoring the deduction would cost the federal government $673 billion over 10 years, the nonprofit Tax Foundation reported. But when asked if caucus members had developed any proposals for filling that hole in the budget, Rep. Josh Gottheimer, a New Jersey Democrat, said: "I think that that's going to be part of the entire negotiation process."
The $10,000 cap on the state and local tax deduction typically raises taxes on people with more expensive homes – meaning residents of suburbs such as Clarence and East Aurora would be those most likely to be affected.
The congressman who represents those suburbs is Rep. Chris Jacobs of Orchard Park, who opted not to join the Bipartisan SALT Caucus.
"Congressman Jacobs does not favor a complete removal of the SALT Cap, but is amendable to raising the cap to help middle class New Yorkers," said Jacobs' spokesman, Christian Chase. "The congressman implores New York’s leaders to reform the state’s tax policies so it no longer is one of the highest taxed states in the nation."
