Feeling the Pinch of SALT
Washington, May 27, 2023
Tags: Jobs and the Economy
Californians continue to face the highest costs of living and pay some of the highest taxes nationwide. This financial burden is the product of bad economic policies coming from Sacramento and record-high inflation over the past few years.
Click here to read the full op-ed in the SCV Signal.
Californians continue to face the highest costs of living and pay some of the highest taxes nationwide. This financial burden is the product of bad economic policies coming from Sacramento and record-high inflation over the past few years. This issue must be addressed to provide financial relief to middle-class taxpayers in California and nationwide.
Because of this, I am calling for my colleagues on both sides of the aisle to consider adding a pinch of SALT to Congress’ legislative priorities this session.
The 2017 Tax Cuts and Jobs Act was the catalyst that fueled the booming economy from 2018 to 2020, before COVID-19 and the far left’s out-of-control spending habits led us to record-high inflation and debt. The Tax Cuts and Jobs Act lowered taxes for all tax brackets and doubled the standard deduction for single and married filers. But the Tax Cuts and Jobs Act also included a legislative middle-finger aimed at states like New York and the great state of California.
That middle-finger, the $10,000 State and Local Tax (SALT) deduction cap for both married and single tax filers, has financially strained middle-class families in California and across the country.
In California’s 27th congressional district, the average household surpasses this SALT cap every year, leaving thousands of dollars in deductions on the table for hard-working families and taxpayers in our communities.
When the Tax Cuts and Jobs Act became law, only California, New York and New Jersey were affected by this deduction cap. But since 2017, the median price of a home has nearly doubled, and now even middle-class taxpayers from most states are easily hitting this SALT deduction cap. It’s no longer just a California or New York problem, it’s now an American problem.
In Congress, I am a vice chair and founding member of the bipartisan SALT Caucus, and am leading efforts to pass SALT deduction cap reform legislation. I also reintroduced the SALT Fairness Act, which would repeal the SALT deduction cap entirely, and bring families in my district much-needed financial relief.
Other potential solutions include doubling the deduction cap from $10,000 to $20,000, or indexing the cap based on inflation. Any of these solutions are better than the current deduction cap, but it’s critical that this Congress acts to reform this issue.
The Tax Cuts and Jobs Act expires in 2025, but Republicans have an opportunity to address the discrepancies of the SALT cap within this law before then. Ignoring this issue ensures the far left will not only regain control of spending, but also control of our tax codes in 2025.
We must not allow this to happen. We must act this Congress, and provide a pinch of SALT reform to bring relief to hard-working middle-class families in our communities.