Bernie Sanders Pushing Back on Dem Calls for Removing SALT Deduction Cap Senate Budget Committee Chairman Sen. Bernie Sanders, I-Vt., speaks during a hearing on Capitol Hill examining wages at large profitable corporations Feb. 25, 2021, in Washington, D.C. (Susan Walsh-Pool/Getty Images)
By Fran Beyer | Monday, 10 May 2021 01:35 PM
Sen. Bernie Sanders, I-Vt., who chairs the Senate Budget Committee, is flatly opposed to removing former President Donald Trump's cap on what’s known as the SALT deduction on state and local taxes, saying lifting it would send a "terrible" message.
In an interview with Axios, Sanders was asked about what’s been called the "a tax break for rich people in blue states."
Trump put a $10,000 cap in place, but now Senate Majority Leader Charles Schumer, D-N.Y., House Speaker Nancy Pelosi, D-Calif., are supporting calls for restoring the deduction.
"It sends a terrible, terrible message," Sanders said of lifting the cap.
"In fairness to Schumer and Pelosi, it is hard when you have tiny margins, but you have got to make it clear which side you are on — and you can't be on the side of the wealthy and powerful if you're going to really fight for working families," Sanders added.
In a 2019 commentary for Business Insider, Scott Eastman, federal research manager at the Tax Foundation, wrote that repealing the cap would "almost exclusively benefit wealthy taxpayers, making the tax code less progressive" — and depriving the federal government of money it will need to fund Democrats' agenda.
But lawmakers from high-tax, Democrat-leaning states have condemned the cap and long called for it to be repealed, The Hill noted.
Though repealing the cap was not included in President Joe Biden’s infrastructure plan, Democrats like New York Gov. Andrew Cuomo and California Gov. Gavin Newsom are fully backing it.
"Like so many of President Trump’s efforts, capping SALT deductions was based on politics, not logic or good government," a group of seven Democrat governors wrote in a letter to the White House, The Hill reported.
"This assault disproportionately targeted Democratic-run states, increasing taxes on hardworking families."
In the House, a group calling itself the SALT caucus, argued last month the cap resulted in increased tax bills in New York, California, and other high-tax states.
"This issue is so critical to our state and our constituents that we will reserve the right to oppose any tax legislation that does not include a full repeal of the SALT limitation," the newly formed group said in a letter at the timel.
"Now, as New York State reckons with the vast economic impact of COVID-19, including a workforce depletion of more than one million jobs, eliminating the SALT limitation is imperative. I and many of my colleagues from New York stand prepared to work with House Leadership to restore the SALT deduction. We are equally prepared to oppose any legislation that fails to do so.