The state and local tax (SALT) deduction cap will be removed for five years as part of the Build Back Better spending deal, according to multiple reports.
“Great news! Here come tax cuts for New Jersey families!” Democratic New Jersey Rep. Josh Gottheimer tweeted.
“Reinstating the State and Local Tax (SALT) deduction will be in the final legislative package. Now, we need to get it to the floor for a vote,” he added.
Great news! Here come tax cuts for New Jersey families!
Reinstating the State and Local Tax (SALT) deduction will be in the final legislative package. Now, we need to get it to the floor for a vote.
We’re going to get this done.
— Rep Josh Gottheimer (@RepJoshG) November 2, 2021
The SALT deal is significant for many Americans as it allows taxpayers to deduct state and local taxes that have been paid from federal tax payments. States with high state income taxes, typically Democrat-led states, are those that will reap the greatest benefit from the new deal.
The Committee for a Responsible Federal Budget said the SALT deal was the most expensive part of the spending bill, accounting for $475 billion of the package.
“A five-year repeal would cost roughly $475 billion, with $400 billion of the tax cut going to the top 5 percent of households. That is more than any other part of Build Back Better, including the Child Tax Credit, spending on child care and pre-K, climate-related tax credits, or health care fundin,” the group said.
While the change can be seen as a win for some Democrats, the package has still not passed. Manchin said earlier this week he has still not changed his mind on the spending bill, meaning it still lacks the votes to make it through the Senate.