Tax Relief

Biden ask the governor for tax relief by refunding the salt deduction

The governors of the blue state are getting SALT-y with President Joe Biden.

Governor Cuomo has teamed up with six other Democratic governors to ask Biden to end the state and local tax deduction cap that has been in place since 2017 – and costs top earners in high-tax countries up to $ 80 billion a year.

“Limiting SALT deductions was based on politics, not logic or good government,” complained Cuomo and the governors of New Jersey, California, Connecticut, Hawaii, Illinois and Oregon in a joint letter to the White House Friday.

“This attack was disproportionately aimed at democratically run states,” they wrote.

The State and Local Tax (SALT) cap was a feature of President Donald Trump’s 2017 Tax Reform Act. Residents of high-tax countries like New York were allowed to deduct all of their state, local, and property taxes from their federal tax returns for decades.

Trump limited the deduction to $ 10,000 while lowering federal income tax rates – a change Cuomo described at the time as a “modern form of betrayal”.

New Jersey Governor Phil Murphy speaks during his 2021 budget address at Rutgers University's SHI Stadium on August 25, 2020.New Jersey Governor Phil Murphy is among those who sent a letter to the White House on April 2, 2021.Noah K. Murray / AP

However, reintroducing the SALT deduction would mean a painful cut in federal revenues – and cost about half the annual amount Biden would like to raise with an increase in corporate tax rates.

In the tax and infrastructure package that Biden unveiled this week, the SALT cap remained fixed.

Related Articles