SALT Cap to Sunset Soon, What’s on Second

Question and Answer, Abbott and Costello. A long time ago.

Q:  So let me see if I have this right . . .  Trump enacted the $10,000 SALT cap to punish blue states, although there is a credible argument that it was used to make rich folks pay for other cuts?  But even then there was a pass thru escape hatch?  The Democrats shouted bloody murder, and the Republicans gloated?  And when Trump got kicked out, Biden promptly and successfully defended the SALT cap anyway to the dismay of Schumer and Pelosi?  Biden’s DOJ wrote a Brief in Opposition, to other Democrats’ petition for cert? And now a buncha red state Republicans are holding up an extenders bill in the House because the one provision they definitely don’t want extended is the SALT cap?  Are you telling me that that Schumer and the “other east coast liberals” are on MAGA’s side?  Shut the front door!  All the while, charities can’t decide which side to take because there wasn’t enough time to know if charitable workarounds resulted in  more or less charitable donations paid to offset state tax payments primarily paid by wealthy people?  Charitable workarounds which were largely shut down, though not entirely if you had an LLC or an S, by new regulations that are about to be obsolete?   

A:  Yep.  Whose on first.  

Here is how the Washington Examiner explains it:

On Monday, Rep. Vern Buchanan (R-FL) and 72 of his colleagues introduced a bill that would make permanent nearly two dozen tax provisions that were part of the Tax Cuts and Jobs Act and are set to sunset after 2025. But the Washington Examiner learned on Tuesday that some GOP lawmakers are objecting to the legislation as currently written because it extends a cap on state and local tax deductions.  The $10,000 cap on deductions for state and local taxes paid has been a contentious topic among both Democrats and Republicans in high-tax states. It was included by Republicans in the Trump tax overhaul as a way to offset the revenues lost from other tax cuts in the bill. The deductions largely benefit wealthy people in high-tax blue states. But a swath of Republicans says they will not vote for a bill that includes extending that cap.

“While there are some tax cuts and other provisions of the law that we would like to see extended, the SALT cap is not one of them,” said Rep. Andrew Garbarino (R-NY). “The Republican members of the SALT Caucus will not vote for a SALT deduction cap extension.” The SALT Caucus is a group of Democratic and Republican lawmakers who have banded together during the last Congress and this new one to fight for the SALT cap to be raised or eliminated. Garbarino, who represents part of Long Island, is one of the caucus’s co-chairmen.

After last year’s midterm elections, the SALT Caucus now contains 10 Republican members. If every SALT Caucus member voted against the legislation as written and every other GOP lawmaker voted in favor, it would fail 222-212. One such new member, Rep. Mike Lawler (R-NY), told the Washington Examiner that he will not support any legislation that includes making the cap permanent. “While I support many of the provisions of the TCJA and believe they should be permanently enacted into law, I cannot and will not support any legislation that would permanently extend the $10,000 cap on the State and Local Tax Deduction,” he said in a statement. “The cap must be lifted, and I will do everything in my power to do so, including withholding support for any legislation that would extend the cap on SALT.”

darryll jones