Democrats hope the next coronavirus relief bill will remove the Trump administration’s cap on state and local tax deductions, Sen. Chuck Schumer said Sunday, but he acknowledged they face an uphill battle because of fierce opposition from Senate Majority Leader Mitch McConnell.
Schumer (D-N.Y.) said the cap on state and local taxes — known as SALT — is especially unfair to Long Island homeowners and that he will push for its removal when he returns to Washington Monday to resume negotiations on the COVID relief bill with Treasury Secretary Steven Mnuchin and President Donald Trump’s chief of staff Mark Meadows. He said he and other Democratic negotiators met with Mnuchin and Meadows for about three hours Saturday.
“We made good progress, and I am hopeful we can get to an agreement,” Schumer said.
The 2018 Tax Cuts and Jobs Act capped deductions on state and local taxes at $10,000 in order to offset a 40% tax break awarded to corporations. It also reduced the mortgage interest deduction from $1 million to $750,000.
Half of Long Island’s taxpayers had claimed nearly $20,000 in SALT deductions prior to passage of the 2018 tax bill, the Senate minority leader said.
Removing the cap, according to Schumer, would give 700,000 households about $20,000 a year — $14 billion — to pump back into the Long Island economy.