(Bloomberg) -- Middle-class households in New Jersey and other high-tax states would benefit from an expansion of the state and local tax deduction, a key House Democrat said.
“For middle-class families in my district, this will equal a tax cut for them,” Representative Josh Gottheimer, a New Jersey Democrat, said on CNN's “State of the Union” on Sunday.
The House's version of the President Joe Biden's economic agenda would increase the cap on the state and local tax, or SALT, write-off to $80,000, up from the $10,000 limit imposed in the 2017.
Senators including Bernie Sanders, a Vermont independent, and Bob Menendez of New Jersey, have criticized that idea and say they want to restrict the tax break to those making less than about $400,000 to prevent the wealthiest Americans from benefiting from the deduction.
Gottheimer says that geographic differences -- lower taxes and costs of living in other states -- mean that the SALT deduction cap could affect those taxpayers less.
“For Bernie Sanders, if you're in Vermont, it's a different situation, right?” Gottheimer said.
House leaders say they plan to pass Biden's tax and spending bill, which includes the SALT expansion, this month. The legislation would then go the Senate, where SALT is almost certain to undergo changes.
The House version of the SALT write-off would largely benefit high earners, according to analysis from the Committee for a Responsible Federal Budget, a think tank. Middle-income households would receive an average tax cut of roughly $20 per year, while the wealthiest would receive over $23,000 per year in tax cuts from this provision, according to their calculations.
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