(Bloomberg) -- A rare show of bipartisan unity over tax policy unfolded Tuesday evening, with 18 lawmakers making their case on why House Speaker Nancy Pelosi should include an expansion of the state and local tax deduction in upcoming legislation.
The lawmakers, including Democrats Tom Suozzi of New York and Josh Gottheimer New Jersey as well as Republicans Michelle Steel and Young Kim, both of California, spent more than an hour Tuesday evening defending the state and local tax, or SALT, write-off on federal taxes. They detailed why the break should be expanded as part of Biden's broader economic agenda.
The SALT deduction is a top priority for many lawmakers from high-tax states including New York, New Jersey and California. Those legislators say that it's critical for middle class residents of their districts to be able to write off more than $10,000 of local levies -- a limitation that was included in President Donald Trump's 2017 tax overhaul.
In their continuing campaign, Kim and Suozzi on Wednesday will host an event with representatives from the National Association of Counties and National League of Cities to talk about how the limits on the SALT deduction hamper local governments from raising revenue to fund services, including education, housing and transportation.
All About SALT, the Tax Deduction That Divides U.S.: QuickTake
“It's cheaper to not insure your children. It's cheaper to use non-union labor. It's cheaper to have lax environmental regulations and to have unregulated utilities,” Suozzi said on the House floor. “By capping this deduction, we are crippling the very states and cities and local municipalities that are the economic engines of our nation.”
Expanding the tax break has become a key point of tension for House Democrats as they begin to craft legislation to pump trillions of dollars into education, child care and housing, paid for by tax increases on the wealthy and corporations. More than 20 House Democrats say that bill also needs to include SALT relief to win their votes, but progressives have countered that the benefit mainly accrues to the well-off.
Biden has so far declined to include an expansion of SALT deductions in his tax proposals. White House Press Secretary Jen Psaki has said that it's up to Congress to craft a plan and find a way to pay for it.
The House is in the initial stages of drafting a budget resolution that would allow for a tax and spending bill later this year on Democratic votes alone. The Senate is also working to initiate the process in their chamber. Senator Bernie Sanders is working on a draft proposal that would include $120 billion for SALT relief, about one third of what the tax break's biggest supporters are calling for.
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