- House Ways and Means Chair Kevin Brady laid out the GOP’s plan to the state and local tax deduction.
- The plan would allow people to deduct state and local property taxes from their federal bill, but not income or sales tax.
- It’s an attempt to appease Republicans in states where people benefit from the deduction.
Republican tax legislation due to be released this week in the House will not include a deduction for state and local income taxes, the top House Republican on tax policy said on Tuesday.
House Ways and Means Committee Chairman Kevin Brady said in a radio interview with conservative commentator Hugh Hewitt that the emerging bill will offer relief only on property taxes.
The state and local tax (SALT) deduction allows people to subtract what they pay to local entities in taxes from their federal tax burden. The framework released by the White House and GOP leaders in September would do away with the deduction.
Brady spoke as House Republican leaders sought to broker an agreement with Republican lawmakers who want the state and local income tax deduction to remain.
Asked if there would be relief on the income side of state and local taxes, Brady replied: “The answer is ‘no.’ … Our lawmakers in those high-tax states really believe their families are being punished most by property taxes.”
According to an analysis by the Tax Foundation, roughly one-third of the total SALT deductions taken in 2015 came from property taxes, while the rest came from income or sales taxes. However, property taxes make up a larger amount of middle-income earners’ SALT deductions.
The deduction is primarily used by Americans living in a handful of states with high tax burdens, like New York and California. That prompted backlash from some Republicans in those states, and they have attempted to preserve the deduction in some way. Several Republican House members voted against the recent budget resolution in protest over the proposed repeal of the deduction.