Cantwell, Menendez, Van Hollen Offer Amendment to Ensure Tax Fairness, Protect Middle Class from Being Taxed Twice on Their Paychecks
WASHINGTON, D.C. –Today, as tax reform takes center stage in Congress, U.S. Senators Maria Cantwell (D-WA), Robert Menendez (D-NJ), and Chris Van Hollen (D-MD) offered a provision to keep in place the State and Local Tax (SALT) deductions, protecting taxpayers from paying taxes twice on every dollar they earn.
As part of their legislation, Republicans have eliminated the SALT deductions for taxpayers to help pay for their massive tax cuts for corporations and the wealthy. Currently, taxpayers pay state and local tax – whether it’s property, income, or sales tax – and they are able to deduct that amount from their federal income taxes. Without the SALT deductions, taxpayers would be taxed multiple times on the same income.
“Washington state has one of the most unique tax codes in the country and our economy has grown faster than the national average every year since WWII,” said Senator Cantwell. “Giving away the State and Local Tax Deduction to pay for a corporate tax break will hurt my state’s economy and the more than 1.1 million Washingtonians that use this deduction, the vast majority of whom are in the middle class. We are a great society in the United States of America, but we shouldn't be a one percent society. We should have a tax code that boosts the middle class and grows the economy from the middle out.”
“Senate Republicans are on the verge of passing a tax plan that reads like one giant hit-job on New Jersey’s middle class,” said Senator Menendez. “Gutting the state and local tax deduction will literally force millions of hardworking families in states like New Jersey to pay taxes twice on the same money. And Republicans are only rubbing salt in their wounds by letting corporations keep this deduction on top of the all the tax cuts they already get. It’s wrong to ask hardworking families who had to fight their way into the middle class to pay more just so that multinational corporations can pay less.”
“The Republican Tax Bill is a punch in the gut for working American families. One of the biggest blows comes from eliminating the state and local tax deduction,” said Senator Van Hollen. “This deduction helps millions of people in Maryland and across the country – and getting rid of it is a direct hit on the pocketbooks the middle class families. It also would tie the hands of state and local governments, which provide critical services in every community across America. This is not a partisan issue, and I urge my colleagues to support this amendment.”
The Cantwell-Menendez-Van Hollen measure would strike the provision to repeal the State and Local Tax Deduction, preventing the proposed Republican plan to raise taxes on middle class families by double-taxing income already taxed at the state or local level. The amendment offsets this change by raising the tax on money that corporations currently hold overseas. The Senators were joined in introducing the amendment by Senators Richard Blumenthal (D-CT) and Tom Udall (D-NM).
Families from all 50 states enjoy much-needed tax relief from SALT deductions. According to the Government Finance Officers Association, more than 30 percent of taxpayers benefitted from the SALT deductions, making SALT deductions a key element in providing tax relief to middle class families. Only 21 percent of taxpayers used the deduction for mortgage interest, and 15 percent of taxpayers used the deduction for charitable donations.
According to the IRS, 86 percent of taxpayers claiming SALT deductions make under $200,000 and 56 percent of taxpayers claiming the deduction make under $100,000.
In October, Cantwell and Van Hollen offered an amendment to preserve the SALT deduction during Senate consideration of the FY2017 Budget Resolution.
A copy of the amendment can be found here.
###
Next Article Previous Article
