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Garamendi Votes to Eliminate Cap on the State and Local Tax Deduction That’s Harming Californians

December 19, 2019
Press Release

Washington, DC—Today, Congressman John Garamendi (D-CA) voted to pass the Restoring Tax Fairness for States and Localities Act (H.R. 5377), which passed the House by a vote of 218-206. The legislation would eliminate the $10,000 cap on the State and Local Tax Deduction (SALT) that was implemented in the 2017 Republican tax law and has disproportionately harmed California.

“The 2017 Republican tax bill’s cap on SALT is terrible public policy that forces my constituents to pay additional federal taxes on previously taxed income. This law has cost Californians over $12 billion, it puts a financial strain on middle-class families, and disincentivizes home ownership. This policy is particularly devastating for seniors who own homes and live on fixed incomes. I vowed to do everything in my power to restore the SALT deduction after the Republican tax plan was signed into law, and I’m pleased to vote for the Restoring Tax Fairness for States and Localities Act today. I commend Rep. Thomas Suozzi (D-NY) for introducing this legislation, and I will work to ensure it becomes law,” Garamendi said.

Background:

The Restoring Tax Fairness for States and Localities Act would eliminate the marriage penalty the State and Local Tax Deduction (SALT) cap altogether in 2020 and 2021. It would be paid for by restoring the top marginal income tax rate from 37 to 39.6 percent. This rate increase would only affect taxpayers with incomes approaching a half million dollars per year and above. Finally, the bill would underscore the important contributions of critical state and local government employees: teachers and first responders. It would double the existing above-the-line deduction for teachers’ out-of-pocket classroom expenses, from $250 to $500. It would also establish a $500 above-the-line deduction for the unreimbursed out-of-pocket work expenses of professional first responders. The bill is fully paid for.