Representative Mike Levin Slams Cap on SALT Deduction in Testimony to House Ways and Means Committee

July 9, 2019
Press Release

Washington, D.C. – Today, U.S. Representative Mike Levin (D-CA) provided testimony to the House Committee on Ways and Means highlighting the harmful impact that the recently-enacted cap on the State and Local Tax (SALT) Deduction has had on communities in California’s 49th Congressional District. As part of the Republican tax bill passed last year, a $10,000 cap on the SALT deduction was enacted, causing families in California and across the country to lose out on thousands of dollars in savings and undermining state and local governments.

“While there were many deep flaws with the Republican tax bill, including the fact that massive corporations and the wealthiest Americans received huge breaks at the expense of middle- and low-income families, one of the most significant flaws for my state was the cap it placed on SALT deductions,” said Representative Levin. “As I travel across the 49th District and talk to my constituents and local officials, one of the top concerns I hear about is the unfair and burdensome cap on the SALT deduction.”

See below for Representative Levin’s full testimony to the Ways and Means Committee:

Thank you, Mr. Chairman, for allowing me to testify on the harmful impact that the recently-enacted cap on the State and Local Tax (SALT) Deduction has had on the communities I represent.

While there were many deep flaws with the Republican tax bill, including the fact that massive corporations and the wealthiest Americans received huge breaks at the expense of middle- and low-income families, one of the most significant flaws for my state was the cap it placed on SALT deductions.

As I travel across the 49th District and talk to my constituents and local officials, one of the top concerns I hear about is the unfair and burdensome cap on the SALT deduction.

I hear from constituents who are losing out on thousands of dollars in savings that they used to receive before the SALT cap went into effect, effectively paying a massive penalty simply because they live and work in a high-cost area with higher taxes. For my constituents who are married, the Republican tax bill is even more burdensome because it caps the SALT deduction at $10,000 for both individuals and married couples filing jointly, effectively creating a marriage penalty.

Many of these families made serious long-term financial decisions in recent years – like whether to buy a new home – based on the expectation that they could take advantage of significant deductions for homeowners. Now, because of the Republican tax bill and the SALT cap that placed new limits on those deductions, their financial plans have been turned upside down. One local accountant told the Orange County Register that “I have a lot of ordinary, middle-class clients with modest homes in ordinary areas who were hurt by this limitation.”

The SALT deduction is also critical for state and local governments, which rely on tax revenue to provide indispensable services like law enforcement, public education, and health care programs. I’ve heard first-hand from city council members and other officials in my district about the strain that the cap has placed on their communities and their budget decisions. With their citizens unable to deduct local and state taxes from their bill, local governments face new challenges in determining how to generate revenue to pay for critical services without increasing the burden placed on families by Washington Republicans.

Ultimately, the Republican tax bill was a scam that was designed to benefit the extremely wealthy and massive corporations at the expense of the middle class. In California, the top 5 percent of earners took home nearly 50 percent of the money included in the bill. If the authors of this bill hadn’t rushed it through the legislative process and instead taken time to hear from local officials like those in my district, then they would have known how much harm the bill would do to families across the country.

There are a lot of provisions in the Republican tax bill that must be changed or undone in order to help middle-class families, and I hope that we can work together to make those much-needed changes.

Thank you.

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