{"id":119738,"date":"2021-08-11T20:37:29","date_gmt":"2021-08-11T20:37:29","guid":{"rendered":"https:\/\/fin2me.com\/?p=119738"},"modified":"2021-08-11T20:37:29","modified_gmt":"2021-08-11T20:37:29","slug":"repeal-of-the-cap-on-state-and-local-tax-deduction-still-in-play-heres-what-to-watch","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/repeal-of-the-cap-on-state-and-local-tax-deduction-still-in-play-heres-what-to-watch\/","title":{"rendered":"Repeal of the cap on state and local tax deduction still in play. Here\u2019s what to watch"},"content":{"rendered":"<ul>\n<li>The Senate approved a $3.5 trillion budget resolution early Wednesday.<\/li>\n<li>Voting along party lines, Democrats blocked an amendment from Sen. Chuck Grassley, R-Iowa, that would have stopped changes to the $10,000 limit on the deduction for state and local taxes.\u00a0\u00a0<\/li>\n<li>As negotiations continue, there are a few things to watch for this fall, policy experts say.<\/li>\n<\/ul>\n<p>The Senate approved a $3.5 trillion budget resolution early Wednesday after 14 hours of debate.<\/p>\n<p>Voting along party lines, Democrats blocked an amendment from Sen. Chuck Grassley, R-Iowa, that would have stopped changes to the $10,000 limit on the deduction for state and local taxes, known as SALT.<\/p>\n<p>The measure is part of Republicans&#x27; 2017 tax overhaul and has been a pain point for many Americans living in high-tax states. Those who itemize deductions can&#x27;t write off more than $10,000 for property and state income taxes.<\/p>\n<p>However, repealing the SALT tax cap has been controversial, with opponents saying removing the limit may primarily benefit the wealthy.<\/p>\n<p><strong>More from Personal Finance:<\/strong><br \/>What the federal debt ceiling means to your wallet<br \/>Democrats&#x27; $3.5 trillion budget plan calls for Medicare expansion<br \/>Free college could become a reality under Democrats&#x27; budget plan<\/p>\n<p>&quot;Democrats, on one hand, claim the wealthy are not paying their fair share, while at the same time proposing to give millionaires six-figure tax cuts,&quot; Grassley said during consideration of his amendment.<\/p>\n<p>The top 20% of earners would receive more than 96% of the benefit of a SALT cap repeal, and the highest-income 1% would see 57% of the benefits, according to Tax Policy Center analysis. Moreover, the report shows only 9% of American households would be affected.<\/p>\n<p>Still, the SALT cap repeal has been a priority for some lawmakers, threatening to derail President Joe Biden&#x27;s economic agenda.\u00a0Although the budget resolution framework mentions &quot;SALT cap relief,&quot; the details are sparse.\u00a0<\/p>\n<p>&quot;It&#x27;s something we&#x27;ve been following pretty closely over the past few months,&quot; said Garrett Watson, senior policy analyst at the Tax Foundation.\u00a0<\/p>\n<p>While the proposals are still unclear, the Tax Foundation has analyzed options, including boosting the $10,000 cap. An alternative may be tying the write-off to income level, he said.\u00a0<\/p>\n<p>&quot;The question is will that be acceptable to the folks in the House who are very much requesting this,&quot; Watson said. &quot;And will that be acceptable to folks who are more skeptical, particularly some progressives.&quot;<\/p>\n<p>The Tax Foundation estimates a full repeal of the SALT deduction limit may reduce federal revenue by $380 billion through 2025 when the provision will sunset.<\/p>\n<p>Meanwhile, a growing number of states now offer SALT cap workarounds for pass-through businesses. These maneuvers allow certain businesses to bypass the deduction limit by using a state levy to cover part of the owner&#x27;s state income taxes.<\/p>\n<p>Source: <a href=\"https:\/\/www.cnbc.com\/2021\/08\/11\/repeal-of-cap-on-state-and-local-taxes-still-in-play-what-to-watch.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Senate approved a $3.5 trillion budget resolution early Wednesday. Voting along party lines, Democrats blocked an amendment from Sen. Chuck Grassley, R-Iowa, that would [&#8230;]<\/p>\n","protected":false},"author":3,"featured_media":119737,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Repeal of the cap on state and local tax deduction still in play. 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