House Votes to Repeal SALT Cap, Trump’s Tax Swipe at Blue States

(CN) – Dealing another blow to the White House on the heels of its historic impeachment vote, the U.S. House of Representatives dug into the Republican tax bill Thursday, repealing a provision that leaves New Yorkers and residents of other states that tax heavily and vote blue from claiming big deductions.

“In 2017, the Republicans gave away almost $2 trillion in tax cuts to corporations and the wealthy,” Representative Norma Torres, a California Democrat, said in remarks before the vote Thursday. “They paid for this tax scam on the backs of hardworking American families. Thirty-six million middle-class families saw their tax increase.”

The Trump administration made his 2017 tax cuts possible in part by putting a $10,000 cap on state and local tax deductions, known as SALT, a move that comes disproportionately at the expense of residents of high-tax states.

Lawmakers in these usually Democratic strongholds say the SALT cap unfairly hurts their populations and their ability to provide public services. Aiming to raise the cap to $20,000 for joint filers in 2019, and to eliminate the cap altogether in 2020 and 2021, Representative Thomas Suozzi of New York introduced a bill called the Restoring Tax Fairness for States and Localities Act.

It passed Thursday by a narrow margin, 218-206.

In her remarks, Torres said the cap means Americans are now paying taxes twice on the same dollar.

“Local governments know how to meet the unique needs of their communities, and the implementation of a SALT deduction cap threatens the ability of our local governments to provide these critical services,” Torres said.

Breaking from his party, Republican Representative Peter King of New York urged passage of the bill on the House floor Wednesday.

“We have subsidized you long enough,” King said, underscoring that the high taxes of the Empire State drive economic forces around the nation. “We’re asking for fairness.”

Representative John Larson, D-Conn., celebrated King’s stance. "What a spirit of Christmas is upon us today!” he said, praising the show of bipartisanship.

Representative David Schweikert, R-Ariz., said Thursday that people who live in high-tax states are already positioned to cushion the blow of a cap on deductions.

“If you’re a donor state, it means because you have high incomes … it’s just math,” he said. “And the math, Madam Speaker – the math always wins.”

Volleying that argument, Representative Josh Gottheimer of New Jersey used his own label.

“It’s time we fought back against the moocher states,” he said. “I’m sick and tired of paying their bills," the Democrat added.

Representative Katie Porter called the SALT cap “anti-family” because it imposes a penalty on married couples who file taxes jointly. In 2018, the Democratic Porter flipped a longtime Republican district in Southern California.

In the last change to the bill before the House vote, Republicans made a motion to recommit. The last-minute edit redirects the cap from people with an adjusted gross income of more than $100 million toward a tax deduction for teachers and first responders. That motion was adopted by a 388-36 vote.

Trump threatened Wednesday to veto the bill, but it’s not expected to get through the Republican-controlled Senate.

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