* Press release…
The National Conference of State Legislatures (NCSL) issued the following statement in response to the release of the tax reform framework developed by the Trump administration, the House Committee on Ways and Means, and the Senate Committee on Finance:
As a central tenet of tax reform is to provide tax relief for the middle class, NCSL is dismayed that the released framework will eliminate a deduction that is vital to middle class taxpayers, the State and Local Tax (SALT) deduction. The SALT deduction has existed in the federal tax code since its inception, which coincidentally was also when the federal tax code was at its simplest, because federal tax writers were cognizant to not tax an individual’s income twice. Eliminating this deduction will lead to higher tax burdens for tens of millions of middle class taxpayers of every political affiliation, an outcome contrary to the stated goal of providing meaningful relief to taxpayers. The elimination of the SALT deduction also impedes the ability of states to invest in infrastructure, fund education, and provide the vital public services that Americans expect from their state and local governments.
Ensuring that the incomes of American workers are not taxed twice hardly counts as a special interest tax break or loophole that needs to be closed. NCSL strongly supports preservation of the SALT deduction and opposes any attempt to harm middle class taxpayers and their communities.
Protect state taxpayers. Protect local decision making. Protect SALT.
I don’t think I’ve ever seen NCSL take a hardcore public stance like that before.
“Blue” states tend to have higher state and local taxes, including property taxes, which is one reason why this is being floated in a Republican Congress. But there are a whole of of Republican members in high-tax suburban and rural districts that will be exposed to some serious constituent anger over this topic.
* From GOP Congressman Rodney Davis…
“Today House Republicans united around middle-class Americans who are being crushed by our outdated tax code,” said Davis. “Illinois residents know all too well the impact high taxes are having on their families’ ability to save and get ahead and our state’s ability to compete for good-paying jobs. Our plan uses Illinois as an example of what not to do. We want to cut tax rates for individuals, simplify but maintain important middle-class deductions, and make it so American businesses can compete globally. There’s still much more work to be done, but this is our shot at changing the lives of each working American for the better and I hope we get bipartisan support to get it done.”
But under this bill, those high state and local taxes won’t be deductible.