WASHINGTON – Amid reports that California Republicans are pushing for further changes in the state and local tax (SALT) deduction in the final tax bill, Americans Against Double Taxation (AADT) released the following statement:
“The current $10,000 property tax provision in the pending tax bills will take away the SALT deduction from two-thirds of California’s middle-class homeowners, and any change that continues to restrict SALT deductions to a comparable limit, including a $10,000 cap on either property or income tax deductions, will have a very similar, harmful result. The only plan that will protect the state’s large middle class and their home values is one that fully restores the SALT deduction,” said AADT Co-Director Bob Chlopak.
As The Wall Street Journal reported and independent analyses confirm, a $10,000 SALT deduction of any kind won’t help most taxpayers because their total itemized deductions, including restricted SALT deductions, would need to exceed the new higher standard deduction of $12,000 for individuals and $24,000 for married couples in order for them to itemize – thresholds very few middle-class taxpayers would meet. As a result, most taxpayers won’t itemize under such a plan, and would lose not only their ability to deduct mandatory state and local tax payments, but also their mortgage interest and charitable contributions as well.
The Washington Post recently reported that the $10,000 property tax cap would eliminate close to 60% of the current tax savings itemizers receive by deducting their property tax, and one non-partisan analysisshows that over 70% of current itemizers would no longer take the property tax deduction under the House plan.
“Any way you look at SALT compromises, the conclusion is the same: they don’t work and they will cause millions of middle-class taxpayers, particularly in high cost-of-living states like California, to lose all of their itemized deductions and pay higher taxes,” added Chlopak. “It should be no surprise that an independent, non-partisan report found that Californians would see a $12.1 billion net tax increase in 2027 alone under the House tax reform bill with a $10,000 cap.”
AADT has made sure that California’s representatives in Congress understand the stakes – launching a nationwide digital ad campaign today targeting likely voters in 21 Republican-led congressional districts, eight of which are California districts. The member-specific ads call on taxpayers to urge their member of Congress to vote against the bill because it raises taxes on the working class by cutting SALT.
# # #
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.