Tag: SALT

Repp. Phillips Leads Push for SALT Relief as Fix Passes Ways and Means Committee

LEGISLATIVE FIX PASSES THE INFLUENTIAL HOUSE WAYS AND MEANS COMMITTEE

WASHINGTON, DC – December 11, the House Ways and Means Committee took action to repeal a 2017 cap on state and local tax (SALT) deductions after hearing from Rep. Dean Phillips about the cap’s harmful impact on Minnesota’s Third Congressional District. The committee passed theRestoring Tax Fairness for States and Localities Act in a bipartisan 24-17 vote. Phillips is an original co-sponsor of the legislation, which eliminates the cap on SALT deductions in 2020 and 2021.

The deficit-exploding 2017 tax bill capped SALT deductions at $10,000, penalizing residents of high-tax states like Minnesota. IRS Statistics on Income figures show that Phillips’s district ranks 35th out of all 435 congressional districts as the most-impacted by the SALT cap and is the second-most harmed district in the Midwest. At 47%, Minnesota’s Third District has the highest percentage of filers claiming the deduction in the state, and the highest average deduction – about $20,000. Continue reading “Repp. Phillips Leads Push for SALT Relief as Fix Passes Ways and Means Committee”

‘I don’t feel wealthy’: The upper middle class is worried about paying for the tax overhaul

The following article by Todd C. Frankel was posted on the Washington Post website November 9, 2017:

House Republican leaders on Nov. 2 proposed legislation that would overhaul the U.S. tax code. Here’s what you need to know about it. (Monica Akhtar/The Washington Post)

ALPHARETTA, Ga. — On the income distribution charts at the center of tax overhaul plans, Courtney Mishoe knows she’s doing well. She works as a tax manager at a firm in the Atlanta suburbs. Her husband is a police officer. Together, they make more than $180,000 a year. They are solidly in the upper middle class. But they have a mortgage and three kids, including one in day care and another in high school with plans to go to college. It all adds up. They depend on tax deductions to make their budget work. Continue reading “‘I don’t feel wealthy’: The upper middle class is worried about paying for the tax overhaul”

To make their tax plan work, Republicans eye a favorite blue-state break

The following article by Michael DeBonis was posted on the Washington Post website September 16, 2017:

President Trump pauses during a meeting with congressional leaders and administration officials on tax reform in the Roosevelt Room of the White House on Sept. 5, 2017. From left, House Speaker Paul D. Ryan (R-Wis.), Trump, Senate Majority Leader Mitch McConnell (R-Ky.) and Rep. Kevin Brady (R-Texas). (Evan Vucci/AP)

As long as there has been a federal income tax, taxpayers have been able to deduct most of the state and local taxes they pay from earnings subject to Uncle Sam’s grasp. But that deduction — especially popular in states rich in Democratic voters — could disappear as soon as next year if President Trump and congressional Republicans succeed in their promised rewrite of the tax code.

The state and local tax deduction, or SALT, has long been a target for tax-policy wonks who see it as an unwise federal subsidy that is mainly claimed by the wealthy. But politics have always intervened: Thanks to the opposition of lawmakers in high-tax states, the deduction has survived every effort to clear out loopholes, including the last federal tax overhaul of similar ambition in 1986.

Now, Republican leaders have made clear the SALT deduction is on the table, and it has shaken up a number of blue-state GOP legislators who are warning that it could derail the ambitious tax plan Trump is now pushing. Continue reading “To make their tax plan work, Republicans eye a favorite blue-state break”