Lawler wins chance for SALT tax-relief bill to come for a vote; would aid married couples

U.S. Rep. Mike Lawler and his fellow New York and New Jersey Republicans made their pitch to their House colleagues on Wednesday, hoping to gain support to provide tax relief to married couples whose federal deductions for state and local taxes are now capped at $10,000.

In a key party-line procedural vote, the House voted 213-209 to allow Lawler's bill to come for a vote, though when that will occur has yet to be announced.

The Republicans want to double to cap to $20,000, bringing equity with unmarried single filers, who, like married couples, are capped at $10,000.

An hour-long debate provided a glimpse into the yawning partisan divide in Washington and the struggle New York Republicans face in undoing what House Republicans accomplished with the Trump-era Tax Cuts and Jobs Act of 2017.

Lawler's bill has yet to garner a sponsor in the Democrat-controlled Senate.

More: Lawler's last stand on SALT deduction reforms for married couples could come for vote

The cap on so-called SALT deductions, which had its biggest impact in high-tax states such as New York, New Jersey and California, was enacted to pay, in part, for huge tax cuts that went to corporations and high-income filers.

Lawler said that the bill’s hit to the U.S. Treasury — estimated at $8 billion — would be softened by the economic activity sparked by the tax break for families earning up to $500,000.

The biggest beneficiaries would be those families earning between $231,000 and $500,000, who are taxed at 35% of their income over $231,000. An added $10,000 in deductibility would be worth up to $3,500 to those filers.

“This represents a significant step towards alleviating the financial burden faced by countless families in my district and across the country, offering relief from the double taxation,” Lawler said. “It’s about fairness and supporting the backbone of our communities."

Lawler said a larger tax break’s cost would be made up by the increased economic activity sparked by taxpayers spending their tax cuts.

“Some critics might balk at the cost of this measure,” said Lawler. “The fact is that relief provided to families across the country would spur additional economic growth that would outpace the minor cost.”

House Democrats, however, were not in any mood to support the New York Republicans, whose elections in 2022 in Long Island and the Hudson Valley helped flip the House to the GOP.

Rep. Teresa Leger Fernandez, D-New Mexico, said the bill, which would only impact the SALT deduction cap for the 2023 tax year, was an election year stunt, designed to bolster the re-election campaigns of Blue state Republicans.

She reminded them that it was House Republicans who created the problem in 2017 with the Trump tax cuts. She reminded Lawler that in a recent Rules Committee meeting over the 2024 tax bill, there were amendments to increase the deduction for married couples to $30,000 and to cover both the 2023 and 2024 tax years.

Republicans did not vote in favor of those amendments, she said.

The Lawler bill covers just 2023. The cap is slated to expire at the end of 2025.

“They created this problem that they now want to put a Band-aid on,” she said. “They capped the SALT deductions and their tax bill gave tax breaks to the wealthiest corporations and CEOs. As we know, Republicans and Trump seem to care more about the richest Americans.”

More: Mike Lawler wants to keep Social Security solvent, but won't say how he'll pay for it

Fresh from former Rep. Tom Suozzi’s Tuesday victory in the special election to replace the expelled George Santos in New York 3rd District, Fernandez said that she was in no hurry to help New York Republicans in 2024. Democrats are looking to flip more of those Republican seats this fall.

“We constantly hear them want to make it permanent, that it’s one of the greatest things, except for when we need to have a couple of their members get re-elected,” she said. “We’re looking for a repeat of what we saw yesterday.”

Rep. Mark Molinaro, R-Tivoli, said his upstate New York constituents who are married aren’t the super wealthy. They are homeowners struggling with the cost of middle-class life in New York.

“They struggle every day, and are barely getting by because they are slammed by property taxes and state taxes,” said Molinaro, the former Dutchess County executive who ran for governor against Andrew Cuomo in 2018. “They are not individuals who chose to be over-taxed. They were forced to by Democrats and one-party rule in the state of New York.”

Rep. Tom Kean, Jr., R-New Jersey, said Congress has taken too long to address the tax problems created by Congressional Republicans in 2017.

"Seven years is too long," said Kean. "With this bill, we are acknowledging the economic challenges faced by our neighbors. This ensures that the tax burden is alleviated for those who need it the most. New Jersey families need tax relief right now and this approach is a critical and necessary step to take the tax burden off the backs of our neighbors."

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David McKay Wilson writes about tax issues and government accountability. Follow him on Twitter @davidmckay415 or email him at dwilson3@lohud.com.

This article originally appeared on Rockland/Westchester Journal News: Lawler SALT tax relief vote bid delivered by unified House GOP