Suozzi Presses Secretary of the Treasury Mnuchin on Impacts of Limiting SALT at Ways and Means Hearing

Today, Congressman Tom Suozzi (D-Long Island, Queens) questioned Treasury Secretary Steven Mnuchin at a Ways and Means Committee hearing on the impacts of limiting the State and Local Tax (SALT) Deduction on local communities across Long Island, Queens, and the United States. Secretary Mnuchin testified before Ways and Means regarding the President’s newest budget proposal, which assumes that the SALT cap will remain in place even after 2025, when it is supposed to sunset.

During Suozzi’s questioning, Mnuchin said that he believed the limiting of this deduction was “fair,” despite admitting that the elimination of the deduction is driving people out of states like New York, leaving middle- and lower-income taxpayers holding the bag to pay for school, police, and other essential state and local tax burdens. Secretary Mnuchin also acknowledged that states like New York and California are huge net donors to the federal government, meaning that they pay much more into the government than they receive back in services.

Suozzi went on to tell Secretary Mnuchin that while blue states, the ones most affected by the SALT cap, are often net donors to the federal government, red states, with the exception of Texas, often take back more in services than they pay into the federal government.

Last year, the House of Representatives passed, with several Republican yes votes, Suozzi’s bill, which would restore the SALT deduction. The Restoring Tax Fairness for States and Localities Act is now awaiting further action in the Senate. Mnuchin said that he has not discussed reinstating the full SALT deduction with the President, but that he would bring it up with him.

Some of the questions from Suozzi and answers from Mnuchin regarding SALT can be seen below.

Suozzi: “Mr. Secretary, do you think that the cap on State and Local Taxes at ten thousand dollars is fair?”

Mnuchin: “I do.”

Suozzi: “Do you think that it’s fair that taxpayers pay taxes on taxes they’ve already paid to state and local governments?”

Mnuchin: “I do.”

…

Suozzi: “If wealthy people and other people leave these states [like New York], to go to places like Florida, South Carolina, North Carolina, Arizona, and other places, who picks up the burden for those [local and state] taxes.”

Mnuchin: “Obviously, the rest of the people who are there.”

Suozzi: “Right, so a lot of lower- and middle-income people have to pay that burden. Or, as you suggest, they can cut the services for the local and state governments… thereby decreasing the quality of life in those states.”

…

Suozzi: “The President, said recently, that he is open to talking about the idea of reinstating the SALT deduction. Have you discussed that with the President?”

Mnuchin: “I haven’t discussed it recently, but I am happy to bring it up with him.”

To view Suozzi’s entire questioning of Secretary Mnuchin, please click here.

Congressman Suozzi serves on the House Committee on Ways and Means, the oldest in Congress, which exercises jurisdiction over tax, revenue, and related issues. Typically reserved for senior members of Congress, the prestigious Committee’s alums include eight Presidents, eight Vice Presidents, 21 Speakers of the House, and four Supreme Court Justices.

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