The State and Local Tax (SALT) deduction will remain, in some form, in the final congressional tax reform legislation, according to House Ways and Means Committee Chairman Kevin Brady, R-Tex. When asked in a November 12 interview if he could guarantee House lawmakers that a final, reconciled bill between the House and Senate would not repeal the SALT deduction, Brady said, “I can.”
No Full SALT Deduction Repeal
In its current form, the House Bill (HR 1) calls for repeal of deductions for state and local income and sales taxes for individuals. However, it allows the deduction of property taxes up to $10,000 annually. The measure retains the SALT deduction for businesses. On the other hand, the Senate’s proposal totally repeals the SALT deduction for individuals.
Walk the Plank
Meanwhile, House Democrats continue to voice opposition to HR 1. They are criticizing the GOP measure for overwhelmingly benefiting the wealthy at the expense of middle-class taxpayers. “House GOP members are being asked to walk the plank,” House Minority Leader Nancy Pelosi, D-Calif., said in a November 13 tweet. Pelosi spoke alongside Senate Minority Leader Charles E. Schumer, D-N.Y., during a November 13 joint press briefing where she referenced the impact of recent and future elections on the success of GOP tax reform efforts. Pelosi and Schumer have predicted political damage to vulnerable Republican lawmakers who support the tax legislation.
Rep. Joe Crowley, D-N.Y., also took to Twitter to express his criticism of the bill. “Billionaires get a tax break, hard-working families get a tax hike. That’s not how it’s supposed to work,” Crowley said.
House Majority Whip Steve Scalise, R-La., is expected to seek a vote count among Republicans on the bill before it reaches the House Rules Committee on November 15. If Republicans have not garnered enough support, changes may be made to the bill that could include repealing the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) individual mandate, according to several reports.
President Trump is scheduled to meet with House Republicans on November 16, prior to the expected floor vote on HR 1 the same day, according to the White House. Trump has said he wants the House to pass a tax reform bill by Thanksgiving.
“I am proud of the [Republican] House and Senate for working so hard on cutting taxes (and reform). We’re getting close! Now, how about ending the unfair and highly unpopular individual mandate in Obamacare and reducing taxes even further? Cut top rate to 35 percent with all of the rest going to middle income cuts,” Trump said in a November 13 tweet.
By Jessica Jeane, Wolters Kluwer News Staff
Need to know more? Join Wolters Kluwer Principal Analyst Mark Luscombe Nov. 29 for Tax Legislation Update: Tax Cuts and Jobs Act, a 2 CPE webinar from CCH® CPElink. Mark will discuss what you need to know about the proposed legislation and now it will impact businesses and individuals.