Sen. Bernie Sanders (I-Vt.) on Wednesday indicated that he is open to making changes to the cap on the state and local tax (SALT) deduction.
In an interview on MSNBC, Sanders said he thinks lawmakers should make changes that help middle-class families, while keeping limits on the SALT deduction for the wealthy.
“There are middle-class families in states where property taxes are very high, that are paying a whole lot in state and local taxes. And I think we have to support them,” said Sanders, the chairman of the Senate Budget Committee. “On the other hand, if you got some billionaires who own a massive mansion, should they be able to write off their state and local taxes? The answer is no, they should not.”
“So I think we ought to work out a system which protects the middle class but makes it clear that [the] very wealthy will pay their fair share,” he added.
Sanders told reporters last week that Senate Democrats are discussing a $6 trillion spending package, which would include a wide array of priorities, including on transportation, Medicare expansion and housing.
A draft document, obtained by The Hill, stated that Sanders’s budget proposal would include $120 billion related to the SALT deduction, but it did not provide further details. That amount of money would not be enough to cover the cost of fully repealing the cap on the deduction on a long-term basis.
Some Democrats from high-tax states, such as New York, New Jersey and California, are pressing for infrastructure legislation to include a repeal of the cap on the SALT deduction. They argue that the cap, which was limited to $10,000 under former President Trump’s 2017 tax law, hurts their residents and their states.
However, some progressives have expressed concerns about eliminating the cap, saying that doing so would largely benefit wealthy taxpayers. Sanders is among the lawmakers who has raised such concerns in the past.
Rep. Thomas Suozzi (D-N.Y.), a leading advocate of repealing the SALT deduction cap, said that he was encouraged by Sanders’s draft document and comments.
“It’s a positive development that he recognizes that SALT is an important thing that needs to be addressed,” Suozzi told The Hill, after he and other lawmakers from high-tax states held an event with labor union leaders about the SALT deduction issue.
Suozzi added that negotiations on infrastructure legislation are ongoing, and he will continue to push for full repeal of the SALT deduction cap.