Pro-SALT deduction House Democrats say they’ll back Senate bill

House Democrats who are pushing to lift a $10,000 fixed cap on state and local tax (SALT) deductions said they will support the Inflation Reduction Act, which passed the Senate on Sunday, even without a provision lifting the SALT deduction cap.

Both New Jersey Reps. Mikie Sherrill and Josh Gottheimer — who insisted “no SALT, no deal” on previous spending packages — expressed support on Sunday for the Inflation Reduction Act because it does not affect personal income tax rates or raise taxes on their constituents.

“We all know how high the cost of living is in Northern New Jersey. I ran for Congress to tackle those costs on behalf of the people of the 11th Congressional District. That’s exactly why I’m voting for the Inflation Reduction Act of 2022,” Sherrill said in a statement. “Because this legislation does not raise taxes on families in my district, but in fact significantly lowers their costs, I will be voting for it.”

The $740 billion Inflation Reduction Act cleared the Senate on Sunday afternoon with the support of all 50 Democrats and a tie-breaking vote from Vice President Harris.

Sherrill said she also supported the climate, health care and tax bill because it will lower prescription drug prices by allowing Medicare to negotiate costs, invest in clean energy and “good-paying jobs” and impose a minimum tax on corporations.

The House will next take up the legislation before a final version reaches President Biden, who applauded its passage on Sunday and called it the “largest investment ever in combatting the existential crisis of climate change.”

Amid negotiations for an even larger spending package last year, Sherrill, Gottheimer and Rep. Tom Suozzi (D-N.Y.) demanded it include a provision lifting the $10,000 SALT deduction cap, threatening to withhold their support without it.

Currently, filers who itemize deductions on state and local taxes in federal returns are capped at $10,000, a result of the 2017 tax cuts enacted by Republicans.

Democrats from high-tax states such as New Jersey, New York and California have slammed the cap as harmful to their residents and the state’s ability to provide services.

Gottheimer in a statement acknowledged the Inflation Reduction Act does not include any provisions raising or removing the SALT cap, but said he supported it because it does not raise taxes in his district and was a “huge win” in terms of lowering prescription drug prices and boosting manufacturing.

“The Inflation Reduction Act makes no changes to personal income tax rates or those impacting small businesses. That has always been my red line, and it is the key to delivering affordability for our families,” he said, adding it would cut costs at more than $2,000 for every family.

“The bill is fully paid for, in part, with provisions that go after tax cheats. It will also help pay down the debt — a fiscally-responsible way to get inflation down,” he added.

“This legislation doesn’t raise taxes on families in my District — it reduces the financial burden on them. For that reason, and for its strong support of the climate, lower prescription drug prices, and job creation, I’ll be voting for it.”