Representative Alexandria Ocasio-Cortez indicated she’s open to raising the limit on the federal deduction for state and local taxes, or SALT, but she opposes a full repeal.
“We should not endorse a full 100% repeal of SALT caps,” the New York progressive tweeted Friday. “I am open to taking a look at SALT and addressing concerns for families put under the squeeze in high cost of living areas.”
The deduction has emerged as a point of contention among Democrats as they work on a $3.5 trillion package that compromises much of President Joe Biden’s economic agenda.
The SALT deduction was limited to $10,000 in former President Donald Trump’s 2017 tax law. A group of Democrats representing high-tax states such as New York, New Jersey and California have made lifting or at least temporarily repealing the cap a condition for voting for Biden’s agenda.
Ocasio-Cortez and some other progressives have previously criticized the SALT deduction as a give-away to the rich because most of the benefits flow to high-income households.
House lawmakers are discussing a two-year suspension of the SALT cap to be included in the bill. Democrats have also talked about increasing the $10,000 cap, rather than eliminating it entirely.
“A full 100% SALT repeal means major tax breaks for extremely high-net worth individuals and billionaires,” Ocasio-Cortez tweeted. “Why do that?”
This article was provided by Bloomberg News.