House Ways and Means Committee Democrats are close to introducing legislation that would temporarily lift the $10,000 deduction cap for state and local taxes.
Committee members have been discussing ways to address the cap, established in the 2017 tax law. Rep. Bill Pascrell (D-N.J.) said he believes some of his colleagues are on board for a temporary reversal, despite initially being skeptical.
“I would say that’s going to be done before the end of November,” Pascrell said, though he acknowledged it could come out before lawmakers leave Washington for Thanksgiving.
Lawmakers from New York, New Jersey, and other states with high income and property taxes have decried the cap.
The politics of altering the cap are tricky: some Republicans, such as Rep. Peter King (R-N.Y.), aren’t fans of the deduction limit, but raising or eliminating it could be seen as a tax cut for the wealthy. Democrats have considered increasing the top income tax rate as an option to pay for changes to the SALT cap.
Legislation to eliminate or raise the cap also would likely face resistance in the Senate, giving the legislation a tough, if not impossible, road to becoming law this Congress.
Ways and Means members have previously said they are considering a measure that would lift the cap for three years, but that approach isn’t set in stone.
“Those details are being finalized right now,” Rep. Ron Kind (D-Wis.) said, when asked about the length of the delay.
The measure is also expected to address what is referred to as the SALT marriage penalty, where a single person is subject to the same deduction cap as a married couple, while unmarried couples filing separately can each deduct up to $10,000.