Caucus Forms to Help Mansion and Yacht Owners Lower Their Tax Bills

by
in Sludge
on April 29, 2021

Most congressional caucuses are formed to work broadly on legislative issues affecting a particular industry or topic, or to push an ideology continually as various bills are voted on. But the latest congressional caucus is much more narrow. Formed on April 15, the SALT Caucus is a bipartisan group of 32 House members working together to pass a tax cut that would prevent the federal government from collecting as much as $600 billion over the next 5 years from, almost exclusively, the top 5 percent of income earners. 

Formed by Problem Solvers Caucus members Tom Suozzi (N.Y.), Josh Gottheimer (N.J.), Young Kim (R-Calif.), and Andrew Garbarino (R-N.Y.), the SALT Caucus is dedicated to allowing people who itemize to deduct 100% of the state and local taxes (aka SALT) they pay from their federal tax bill. Currently, SALT deductions are capped at $10,000 under a provision of the 2017 Tax Cuts and Jobs Act. 

Generally, the reason someone would have state and local tax bills that could push their itemized deductions above the standard deduction amount ($24,800 for a couple) is taxes paid on property. Allowing itemizers to take these deductions without limits largely benefits owners of highly-assessed mansions, multiple vacation homes, and luxury yachts.

In a press release announcing their formation, the SALT Caucus said they are fighting for “tax relief for middle class families.” However, that’s not true.

Just 2.9% of households in the middle quintile would benefit from repealing the $10,000 SALT cap, while 92% of the top 1% and 78% of the next 4% would benefit, according to an analysis by the Center for Budget and Policy Priorities. More than two-thirds of the tax savings would go to white people, exacerbating racial wealth disparities, according to the Institute on Taxation and Economic Policy’s analysis.  

The SALT deduction cap could be adjusted in a way that doesn’t disproportionately benefit rich owners of yachts and mansions. Modestly increasing it to $20,000 or $30,000 would likely allow the small percentage of middle-class people who are impacted by it to keep more of their income. But the SALT Caucus and its leaders want a full repeal.

Suozzi, Gottheimer, and Rep. Bill Pascrell (D-N.J.) have previously said that they will vote against President Biden’s infrastructure package unless the SALT tax cut is passed. The Democrats hold a slim majority in the House and it would only take a handful of defections for them to sink the package. The formation of the SALT Caucus, which includes 24 Democrats and 8 Republicans, will likely help them get the tax cut included as the final details are being negotiated.

Here are the SALT Caucus members: 

Co-Chair Tom Suozzi (D-N.Y.)

Co-Chair Josh Gottheimer (D-N.J.)

Co-Chair Andrew Garbarino (R-N.Y.)

Co-Chair Young Kim (R-Calif.)

Vice Chair Bill Pascrell, Jr. (D-N.J.) 

Vice Chair Katie Porter (D-Calif.)

Vice Chair Mikie Sherrill (D-N.J.)

Vice Chair Jamie Raskin (MD-08)

Vice Chair Chris Smith (R-N.J.)

Vice Chair Lauren Underwood (D-Ill.) 

Danny Davis (D-Ill.)

 Nicole Malliotakis (R-N.Y.)

 Julia Brownley (D-Calif.)

 Judy Chu (D-Calif.)

 Lee Zeldin (R-N.Y.)

 Michelle Steel (R-Calif.)

 Mike Levin (D-Calif.)

 Jimmy Panetta (D-Calif.)

 Jimmy Gomez (D-Calif.)

 Brian Higgins (D-N.Y.)

 Jerry Nadler (D-N.Y.)

 Tom Malinowski (D-N.J.)

 Jeff Van Drew (R-N.J.)

 Alan Lowenthal (D-Calif.)

 Anna Eshoo (D-Calif.)

 Andy Kim (D-N.J.)

 Ted Lieu (D-Calif.)

 Brad Schneider (D-Ill.)

 John Larson (D-Conn.)

 Eleanor Holmes Norton (D-D.C.)

 Mike Garcia (R-Calif.)

 Gregory Meeks (D-N.Y.)


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