Gerson said lawmakers may eventually accept something less than full repeal, like an increase in the cap or a temporary repeal that would exclude the very wealthy. “There’s a lot of ways to skin the cat,” he said.
Restoring the full SALT break would cost about $88.7 billion for 2021 alone, and lawmakers are seeking a repeal of the cap through 2025, when portions of Trump’s tax law are set to expire. That means Congress would need to find hundreds of billions of dollars of spending to cut from Biden’s proposal or find tax increases to offset that cost.
Representative Josh Gottheimer, a New Jersey Democrat, has said that revenue from IRS audits could be used to pay for the more generous tax break, and Representative Tom Suozzi of New York has floated using money from increasing the top income tax rate to 39.6% from 37%.
Revenue Sources
But the American Families Plan has both of those revenue-raising elements, and applies that funding for the spending measures in the program—rather than for addressing the SALT issue.
Seth Hanlon, a senior fellow at the Center for American Progress and a former Obama administration official, said that Democrats who want to repeal SALT have some leverage, but will likely have to compromise.
“The math behind full repeal collides with more urgent priorities,” Hanlon said. “Short of full repeal, there are plenty of much more, targeted options that are still regressive, but cost a fraction of what full repeal costs.”
This article was provided by Bloomberg News.