The state and local tax deduction was capped at $10,000 in the 2017 Republican tax overhaul to offset the cost of some of cuts in levies in that package. Democrats say that move targeted taxpayers in high-tax states and have been seeking to roll back the cap since then. Republicans have criticized the move, saying that the SALT deduction largely benefits high-earners.
The discussions mirror larger conversations happening among Democrats about how to trim the cost of dozens of climate, child-care and health provisions in the so-called reconciliation bill. Democrats will likely need to curb spending on nearly every policy area, either by eliminating priorities entirely or finding ways to reduce the cost through income limits or reducing the time period the benefit is available.
This article was provided by Bloomberg News.