Deductions Lost
The effect of the $10,000 cap is unevenly distributed. For example, in New York Democrat Carolyn Maloney’s district, which includes the Upper East Side and other wealthy parts of Manhattan and Brooklyn, the 19% of her constituents who were eligible to claim the SALT write-off on average lost out on $100,405 worth of tax breaks. That would have amounted to as much as a $37,000 reduction in their federal tax returns.

In House Speaker Nancy Pelosi’s San Francisco district, 17% of taxpayers took an itemized deduction for state and local taxes, but those who did lost an average $53,471 worth of tax write-offs as a result of the cap, putting her constituents in the No. 6 spot of congressional districts who lost the most SALT breaks per itemizing taxpayer.

One in four of Suozzi’s constituents, on Long Island and in part of Queens, lost out on an average of $29,113 worth of deductions. He has introduced a standalone bill to repeal the SALT cap that has 96 Democratic and 10 Republican co-sponsors.

One of the the co-sponsors of his bill is Michelle Steel, a newly elected Republican representative from Newport Beach, California, whose district is the most affected of any held by the GOP. About 23% of taxpayers in her district lost an average deduction of $26,254.

Steel said she doesn’t see the issue as a partisan one. “It’s not hurting the blue states, because they’re still collecting their state income taxes,” she said. “It’s hurting the taxpayers themselves.”

Critics of the SALT cap say it amounts to double taxation. And in states like New York and New Jersey hard-hit by job losses from the pandemic, it provides another incentive for high-income earners to move to lower-tax states.

SALT deductions by nature benefit relatively few taxpayers. Nationwide, only about 11.5% of taxpayers itemize their tax returns, allowing them to claim the write-off. Beyond that, they have to incur state and local income levies and property and sales tax bills above $10,000 to be affected by the Trump limits.

Proponents of keeping the cap point to data that show it largely benefits the wealthy, whom the Democrats have targeted for taking on the bulk of the burden of paying for Biden’s infrastructure and social spending plans. More than half of the uncapped tax benefits flow to households earning more than $1 million a year, according to the Joint Committee on Taxation.

The Politics Of A Provision
In the 2018 midterm elections, Democrats were able to pick up several suburban districts around New York City and in Southern California, partly because of anger over the SALT cap, and now those House members say they need to follow through.

Last week, 17 Democrats from New York sent a letter to Pelosi saying they would “not hesitate to oppose any tax legislation that does not fully restore the SALT deduction.”