Senate

Grassley says Senate won’t revisit provision of GOP tax law

by Naomi Jagoda - 02/07/19 2:49 PM ET

Sen. Chuck Grassley (R-Iowa) is throwing cold water on the idea of revising a key provision in the GOP tax law after President Trump said he was open to revisiting it.

A spokesman for Grassley said in a statement Thursday that the Senate Finance Committee chairman won’t revisit the tax law’s cap on the state and local tax (SALT) deduction.

The pushback came a day after Trump said in an interview with Washington-based regional reporters that he was “open to talking about” the $10,000 cap on the deduction.{mosads}

The cap is strongly opposed by politicians in blue states such as New York, New Jersey and California. And many Republicans who voted against the tax legislation in late 2017 did so over the deduction.

Grassley spokesman Michael Zona on Thursday criticized Democrats who want to repeal the SALT deduction cap, since doing so would help high earners.

“It’s ironic that the same Democrats who criticized the Tax Cuts and Jobs Act for supposedly benefiting only the wealthy are now advocating for a change to the law that would primarily benefit the wealthy,” Zona said.

“The SALT deduction is a federal subsidy for states to raise taxes on their residents without political consequence. The answer to the problem is for states to lower their taxes instead of insisting that taxpayers from lower-tax states subsidize their profligate spending.”

The comments from Grassley’s office signal that there won’t be any changes to the SALT cap in the next two years, since the Republican-controlled Senate would have to pass legislation repealing the cap for changes to be enacted.

Republicans included the SALT deduction cap in their 2017 tax law both because they think it is sound policy and because it would raise revenue to help pay for tax cuts.

But lawmakers in high-tax states have expressed concerns that the cap is harming their residents. The cap is also a top concern for a number of Democrats in the new House majority.

The House Ways and Means Committee is expected to hold a series of hearings about the GOP tax law in the coming weeks and months, and the SALT cap is likely to come up in those hearings.

Tags Chuck Grassley Donald Trump