Sen. Bernie Sanders is taking on the leaders of his own Democratic Party — Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi — for supporting a repeal of the cap on deductions for state and local tax on federal income taxes.
Pelosi (D-Calif.) and Schumer (D-NY) — who represent two of the highest tax states — back repealing the $10,000 cap instituted by former President Donald Trump on SALT deductions, which Sanders said “sends a terrible, terrible message” to working-class people.
“It sends a terrible, terrible message,” Sanders said on “Axios on HBO.” “You can’t be on the side of the wealthy and the powerful if you’re gonna really fight for working families.”
Sanders and other socialist progressives like Rep. Alexandria Ocasio-Cortez say repealing the cap would be a gift for the wealthiest in high-taxed states.
Trump placed the $10,000 cap on SALT deductions as part of his 2017 tax cut.
Before Trump capped the deductions, residents of high-tax states like New York could deduct their local, state and property taxes from their federal tax.
“Ultimately, what you have got to do – and in fairness to Schumer and Pelosi, it is hard when you have tiny margins – but you have got to make it clear which side you are on,” Sanders said in the interview that aired Sunday.
Schumer and Sen. Kirsten Gillibrand called for restoring the entire SALT deduction in January.
“I am proud to be leading this legislation to restore our full SALT deduction. Double taxing hardworking homeowners is plainly unfair; We need to bring our federal dollars back home to cushion the blow this virus – and this harmful SALT cap- has dealt so many homeowners and families locally,” Schumer said in a statement at the time.
Pelosi urged President Biden to partially repeal the cap in any subsequent spending bills associated with the coronavirus pandemic.
“We could reverse that for 2018 and 2019 so that people could refile their taxes” and get a refund, Pelosi told The Times in March. “They’d have more disposable income, which is the lifeblood of our economy, a consumer economy that we are.”
A spokesman for Pelosi, Henry Connelly, told the newspaper that Pelosi said any change to SALT should be “tailored to focus on middle-class earners and include limitations on the higher end.”
Biden hasn’t included reinstating the deduction in his $2 trillion infrastructure plan.
White House press secretary Jen Psaki lawmakers who feel strongly about eliminating the cap should speak to the administration about options to offset the loss of tax revenue.
“There’d have to be a discussion about how that would be paid for, what would be taken out instead. And then there’s sort of a discussion of what’s most important to achieving our overarching objectives,” she said last month.