WASHINGTON — A long-running bid to temporarily double a $10,000 limit on state and local tax deductions for most married couples failed in the House of Representatives on Wednesday.
The cap was put in place as part of sweeping tax cuts passed by a Republican-led Congress during then-President Donald Trump’s administration. The so-called SALT cap has led to higher tax bills for many residents of New York, New Jersey, California and other high-cost, high-tax states, and is a major campaign issue in those states.
A procedural vote to bring up the legislation was rejected by a vote of 195 to 225.
While not a success, the vote gave Republicans in influential congressional districts a chance to show they are fighting for tax relief for voters who are now unable to fully deduct the amount of state and local taxes they pay. It is a particularly important issue for Republican members of the New York delegation, some of whom serve in districts that President Joe Biden won in 2020.
Underscoring the political momentum, the vote came just one day after Democrats took back one seat in the New York House of Representatives, with Tom Suozzi winning the seat left vacant last year when Republican Rep. George Santos was forced out of office put.
“I think it shows people at home that the Republicans who sent them here in Biden districts fought hard to get it to the floor,” said Rep. Anthony D’Esposito, who represents one of those districts.
Democrats used the debate Wednesday to remind supporters of the bill which party was responsible for imposing the $10,000 limit. Republicans limited the deduction to help pay for other tax cuts in the 2017 package. They also cast their votes as an “election ploy to help New York Republicans win the next election.”
“They created this problem that they now want to put a Band-Aid on,” Rep. Teresa Leger Fernandez, D-M., said of House Republicans.
Under current law, the $10,000 limit applies to single filers and married couples filing jointly. The bill from Rep. Mike Lawler, R-N.Y., would double the limit for married couples filing taxes jointly and earning up to $500,000. The change would only apply to tax year 2023. Lawler said the current limit penalizes married couples.
Nearly half of taxpayers in his district claimed the state and local tax deduction before the law was changed during the Trump administration. Now it’s about one in five, he said. Nationally, the percentage of taxpayers claiming the deduction has fallen from about 31% to 9%, he said.
“This sharp decline has disproportionately affected high-cost states like New York, where the cost of living is well above the national average,” Lawler said.
After the vote, Lawler said New York Republicans were fighting for their districts and the state, and that “New York Democrats helped undermine the bill.” He said Democratic leader Hakeem Jeffries urged his colleagues to vote against the procedural rule.
“I think it’s unfortunate that New York Democrats embraced the rule and didn’t allow a vote on the bill,” Lawler said.
The issue transcends political parties. Eighteen Republicans from states where the cap on the deduction is not an issue because the vast majority of taxpayers also voted against the rule allowing consideration of the measure. Every Democrat also voted against progress.
Analysts say eliminating the limit, or even doubling it for married couples filing jointly, would deprive the federal treasury of revenue and increase federal deficits. They also said the adjustment would mainly benefit higher-income households.
The $10,000 cap, like many of the provisions of the 2017 tax bill, expires on December 31, 2025, putting tax policy at the top of the list of issues to be discussed in the next Congress. That expiration date potentially gives lawmakers from New York, New Jersey and other states hardest hit by the cap more power to force a change.