• Sen. Bernie Sanders shares conflicting opinions on the removal of the SALT cap
  • Senate Democrats propose $6 trillion spending budget to counter Biden’s
  • Democrats and Progressives in high-tax states struggle to find common ground

On Wednesday, Senator Bernie Sanders (I-VT) shared new thoughts on the cap for state and local tax (SALT) deductions, suggesting that he may now be in favor of lifting the cap as a benefit middle-class families. “I think we ought to work out a system which protects the middle class but makes it clear that [the] very wealthy will pay their fair share,” he said.

Sanders’ new stance supersedes his message last month in which he said the removal of the SALT cap would send “a terrible, terrible message when you have Republicans telling us that this is a tax break for the rich…”

Sanders also shared last week that Senate Democrats are currently developing a new spending package priced at $6 trillion, including $120 billion towards the SALT deduction. However high the budget may be, it would not be enough to permanently repeal the cap. The allotted $120 billion could support either 1-2 years of a full repeal of the cap or 5 years of an increased cap, but not a full and permanent repeal.

Meanwhile, Democrats from California, Illinois, Maryland, New Jersey, and New York have petitioned to permanently repeal the cap on the SALT deduction; the current cap of $10,000, established under Trump’s TCJA, hurts residents in these high-tax states.

Progressives, on the other hand, have expressed their concerns that fully eliminating the cap would largely serve as a benefit to the wealthy, while doing little for the middle-class.

Sanders’ mixed messages were paired with a quote, saying that lawmakers “have got to make it clear which side you are on — and you can’t be on the side of the wealthy and powerful if you’re going to really fight for working families.”

How does the SALT deduction cap affect you? Talk to your tax expert at 516-541-6549 and visit our website for more tax news and updates.

Devin McQuillan
Associate, Creative Solutions

Contact:
516-541-6549 | Email

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