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Amidst the Battles in DC, Suozzi’s Bipartisan Bill to Restore SALT Deduction to get Vote

December 16, 2019
Press Release
Legislation, which is expected to be voted on as early as this week, will restore tax fairness for New York and Long Island

This week, the United States House of Representatives is expected to vote on bipartisan legislation, led by Congressman Tom Suozzi (D-Long Island, Queens), which would provide immediate tax relief for his constituents. Suozzi’s colleagues from Long Island Congressman Peter King (R-NY-02), Congresswoman Kathleen Rice (D-NY-04), Congressman Gregory Meeks (D-NY-05) are all cosponsors of this legislation, as well as more than 50 other Members of the House.

 

This legislation would eliminate the marriage penalty by doubling the cap to $20,000 for joint filers for 2019 and would fully restore the state and local tax (SALT) deduction for 2020 and 2021. The cost of this plan would be fully offset by returning the top individual tax rate from 37 percent, back to 39.6 percent, prior to the GOP tax bill of 2017.

 

“In spite of all the turmoil in DC, I have remained laser-focused doing what’s right for my constituents. Repealing the unfair cap on SALT has always been a top priority of mine,” said Suozzi. “The 2017 cap on SALT broke a century-old agreement. A covenant to protect state and local government. This week, my colleagues and I have a chance to pass this bipartisan legislation to restore that protection, restore that covenant, and restore fairness as well.”

 

The capping of the SALT deduction was unfair to Long Island because:

  • New Yorkers already subsidize other states by paying $48 billion more in taxes than they receive back from the federal government, more than any other state.
  • The repeal of the SALT deduction results in double taxation by imposing a federal tax income which already paid for state and local taxes.
  • State and local governments are being penalized – the creation of the SALT deduction was coupled with the creation of a federal income tax in 1913. When the 16th amendment was ratified, lawmakers at the time did not think it was fair for Americans to pay taxes on taxes.
  • The elimination of the deduction drives people to other states and leaves middle- and lower-income taxpayers holding the bag to pay for school, police and other essential state and local tax burdens.

“Eliminating deductions for local and state taxes will have a devastating effect on New York. We give far more to Washington then we get back. For every dollar we give, we get $.79 back. That’s a $48 billion shortfall and hurts our middle-class Long Islanders. This legislation is critical,” said Rep. King.

“Before the tax bill, more than half of my constituents deducted their state and local taxes for an average of $23,000 a year,” said Rep. Rice. “The President’s cap on those deductions has devastated my community and it’s past time that Congress take action to right this wrong. I’m proud to support this bipartisan bill, which would finally provide much-needed relief to middle-class families across Long Island.”

In Suozzi’s district, more than 250,000 families claim the SALT deduction at an average rate of $18,300. Capping the deduction has cost Long Islanders, and all New Yorkers, billions more in additional taxes. The average SALT burden is above the $10,000 cap in 52 of 62 counties in New York.

The Restoring Tax Fairness for States and Localities Act has already been endorsed by several organizations including:

  • US Conference of Mayors;
  • National Association of Counties;
  • National League of Cities;
  • International Association of Firefighters;
  • National Association of Realtors;
  • American Federation of Teachers;
  • National Education Association;
  • National Association of Police Organizations