MUCH ADO ABOUT SALT Blue-state Democrats have campaigned for years on restoring the full state and local tax deduction after House Republicans capped it in 2017. They’re surprisingly OK if Republicans get the credit for fixing it. State of play: Republicans are drafting a reconciliation package(s) that will include changes to tax policy, which means arguments over SALT are back in full force. As you know, reconciliation means the GOP can skirt a Senate filibuster, allowing the party to pass legislation without Democratic support. The complicated politics: Wanting to repeal the $10,000 cap on deductions for state and local taxes crosses political parties in odd ways. It’s long been a vexing issue for both Democrats and Republicans in states with high property taxes, such as California, New York and New Jersey. The cap — which Republicans passed as part of their 2017 tax law and will expire at the end of the year unless Congress acts — represents a huge tax increase for many people in those states. That puts a lot of pressure on those lawmakers to change it, especially those in purple districts. But there are staunch opponents in both parties, as well. Some progressives aren’t inclined to give more tax benefits away to wealthier Americans, and fiscal conservatives are loath to expand a tax credit that could add to the deficit. Signs of movement: A group of blue-state Republican lawmakers are making the trek this weekend to Mar-a-Lago to discuss a SALT proposal with President-elect Donald Trump. The Dem argument: Purple-district Democrats are holding out hope that Republicans will succeed in ending the cap — and solve the problem for them. “I think it's great that the people that are supportive of SALT are holding their colleagues accountable and letting them know that they're going to withhold their votes unless they get satisfaction on SALT,” said Rep. Tom Suozzi. The New York Democrat called GOP discussions to raise the cap to $20,000 “unacceptable,” as Democrats have pushed to remove the cap entirely. But asked whether it mattered which party passed it, he replied: “In the end, I want to get it done.” Contrast that with other issues like immigration, where parties have clamored to take credit for positive developments and frequently laid blame for problems. Negotiations over SALT started almost as soon as the 2017 tax law passed, and neither party has been able to solve the issue (some Democrats threatened to vote against their mammoth, party-line bill unless it included changes to SALT, but they ultimately folded). Lawmakers from those states are tired of pushing for changes with nothing to show for it. The SALT Republicans have campaigned on repealing the SALT cap entirely, but conservatives are highly unlikely to let that happen, as they push to lower the deficit. Still, their Democratic counterparts are cheering them on. “I trust that they're going to do the right thing when it comes to making sure that there's the proper negotiations for a proper amount of what the cap will end up being,” said Rep. Jimmy Panetta (D-Calif.). Of course, top Democrats aren’t ready to forgive Republicans for taking the deduction away in the first place. “The Republicans burned the house down and now want to pretend that they're firefighters,” quipped House Minority Leader Hakeem Jeffries. — Nicholas Wu and Mia McCarthy
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