The Supreme Court on Monday declined to hear a challenge to the $10,000 state and local tax (SALT) deduction cap, a Trump-era tax law ...
The Supreme Court on Monday declined to hear a challenge to the $10,000 state and local tax (SALT) deduction cap, a Trump-era tax law that hit the pocketbooks of wealthy people in blue states.
New York led a group of states including Connecticut, Maryland and New Jersey in seeking to strike down the law that limits people to deducting $10,000 of state and local tax from their federal tax bill. The cap was enacted as part of the 2017 Trump tax bill as a way to offset other cuts.
The states had argued that the cap improperly encroached on their taxing ability.
'The long history of federal income taxation demonstrates that Congress and the States equally understood that a deduction for all or nearly all state and local property and income taxes was constitutionally required to preserve state sovereign taxing authority,' the states wrote in a March court filing.
In October of last year, a Second Circuit Court of Appeals had rejected the state's argument that the deduction was unconstitutional. The Supreme Court did not give a reason on why it declined to hear the case.
Congressional Democrats in blue states oppose the cap - the House-passed Build Back Better plan rose the cap to $80,000 until 2031, but that bill failed in the Senate.
The Supreme Court on Monday declined to hear a challenge to the $10,000 state and local tax (SALT) deduction cap, a Trump-era tax law that hit the pocketbooks of wealthy people in blue states
The SALT cap lift was not in President Biden's original bill but was added on by a group of moderates from high-tax states like New York and New Jersey, Reps. Bill Pascrell, N.J., Tom Suozzi, N.Y., Josh Gottheimer, N.J., and Mikie Sherrill, N.Y.
The 'SALT Caucus' as they've called themselves even threatened to vote against a scaled-down version of the social and climate spending bill does not lift SALT caps.
Maine Rep. Jared Golden was the only Democrat to vote against the Build Back Better act due to the SALT cap lift, which was the most costly provision of the bill.
Rep. Josh Gottheimer, D-N.J., led a group of coastal Democrats in threatening to tank the Build Back Better plan if it didn't include raising the SALT cap
Rep. Jared Golden, Maine, was left the lone Democratic defector on the bill
'The current House version of SALT gives millionaires thousands in cash, while people who make less than about $100,000 per year get less than $20 on average. his policy costs $286 billion. Why would we do that?' he tweeted.
Golden said that the bill made it seem like 'Republicans were in charge.'
'The fact that more people and orgs on the Democratic side aren't up in arms about this is wild,' he wrote.
Democratic socialist Sen. Bernie Sanders said of the SALT plan: 'It's bad policy, it's bad politics.'
'Democrats have campaigned on the understanding that amid massive income and wealth inequality, we've got to demand the wealthy start paying their fair share, not give them more breaks,' he said.
Sanders came out with a plan with New Jersey Sen. Bob Menendez that instead of raising the cap exempts those making $400,000 or less from the existing $10,000 cap.
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