Coalition To Congress: NO To Eliminating the State and Local Tax (SALT) Deduction

For Immediate Release: September 27, 2017
Contact:
Natalie Pavlatos, media@americansagainstdoubletaxation.org, (202) 777-3539

Coalition To Congress: NO To Eliminating the State and Local Tax (SALT) Deduction

Vows To Wage Fierce Campaign To Preserve Most Popular Deduction That Benefits Middle Class Taxpayers, Supports Home Ownership and Vital Public Services

WASHINGTON, D.C. – Americans Against Double Taxation today issued the following statement in response to the tax reform outline released by the “Big Six” and the President’s planned tax reform event in Indiana this afternoon. The tax reform outline proposes to eliminate the deduction for state and local taxes (SALT):

“This plan is a Washington money grab that takes away the most popular tax deduction from 44 million taxpayers in all 50 states, most of them middle class. This includes more than 700,000 households in Indiana. Middle class homeowners will be hit especially hard in the form of larger tax bills from Uncle Sam and the likelihood of lower home values.

“The impact of eliminating SALT will not only be felt at the kitchen table, it will be felt in our states and local communities. This plan threatens necessary infrastructure investments and vital state and local public services, including education and public safety, that benefit all Americans.

“This plan should concern all taxpayers who itemize, including those who claim the mortgage and charitable deductions, because the loss of SALT will mean fewer households will be able to claim any deductions in the future. Taxpayers should not be lulled into a false sense of security as this proposal threatens all itemized deductions, even though its direct focus is on SALT.

“We will vigorously stand up for SALT and oppose any tax plan that seeks to finance reform by taking away this deduction which prevents double taxation and protects our fiscal federalism.”

One of the six original federal tax deductions, SALT has been a staple of the federal tax code for over 100 years. Since 1913, SALT has provided states and local governments with the financial flexibility to meet the needs of their constituents. SALT also prevents double taxation of Americans by allowing taxpayers to claim a deduction for the state and local taxes they have already paid from their incomes.

  • SALT benefits the middle class. Almost 40% of taxpayers making between $50K to $75K per year and more than 70% of taxpayers earning from $100K to $200K per year claim the SALT deduction. (IRS 2015 Data)
  • Nearly 86% of taxpayers who claim the SALT deduction have an adjusted gross income (AGI) under $200,000. (IRS 2015 Data)
  • Over 50% of the total amount of the SALT deduction goes to taxpayers making less than $200K a year. (IRS 2015 Data)
  • In Indiana where the President is speaking today, 706,290 households claim the SALT deduction, 88.5% of them middle class households. (IRS 2015 data)
  • If Congress eliminates SALT, middle class homeowners will see their taxes increase. Homeowners that make between $50,000 and $200,000 would see an average tax increase of $815 – even if the standard deduction is doubled. (PwC/National Association of Realtors analysis of a plan with features similar to the plan announced today)
  • Taxpayers in all 50 states – in both Democratic and Republican congressional districts – claim SALT. Of the top 20 highest-SALT congressional districts, 45% have Republican representatives. (Tax Policy Center)

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 About Americans Against Double Taxation

Americans Against Double Taxation is a coalition of state and local government organizations, service providers and other stakeholders dedicated to protecting the state and local tax deduction (SALT), a federal tax deduction claimed by 44 million American taxpayers that supports vital investments in infrastructure, public safety, home ownership and education. For more information, visit AmericansAgainstDoubleTaxation.org.