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With an almost party-line vote, the US House of Representatives on Friday approved a sweeping bill that could drive major changes in taxation, health care, energy, climate change, family services, education and housing.

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Residents of high-tax states — such as New York and New Jersey — are looking for some relief on their tax bills through legislation increasing the limit for the so-called SALT deduction — the amount of state and local taxes they can deduct. are federal taxes.

In 2017 with Donald Trump in the White House and the GOP in control of Congress, Republicans passed sweeping tax cuts that benefited the wealthy enormously. To help finance those deductions, the GOP bill limited the amount of state and local taxes that households can deduct from their federal tax bills to $10,000 per tax year. The law set the cap to expire in 2025, meaning the amount of deductions would become unlimited after that. ,state and local taxes This can include income tax, real estate tax, personal property tax and sales tax.)

Under the package Democrats are now pushing, the annual SALT deduction cap will be increased to $10,000 through 2030, with the reduction to $10,000 in 2031. Then it will end permanently in 2032. So it means that the law will give some relief to the taxpayers. High-tax states but actually a limit will remain on the books for more than seven years, set by Republicans.

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The GOP has criticized Democrats for insisting on raising the SALT deduction cap because it disproportionately helps the top earners from high-tax coastal states. And many progressive Democrats actually agree, saying that wealthy earners use the SALT to lower their effective tax rate.

The legislation could face a tough road in the US Senate, where Democrat Joe Manchin of West Virginia is expected to demand cuts.

As for the SALT deduction, Sen. Bob Menendez, D-New Jersey, and Sen. Bernie Sanders, I-Vermont, are proposing a $10,000 limit—but only for high-income families (somewhere between $400,000 and more). between $550,000) year, according to the report) Lawmakers are also considering other options, such as doubling the SALT deduction to $10,000 for joint filers who currently deal with a so called marriage penalty (Single filers can each take a $10,000 deduction, but joint filers can take only one).

The overall legislative package, which President Joe Biden calls “Build Back Better,” also provides expanded tax breaks for millions of families with children, low-income workers and residents who buy private health insurance.

New York Governor Kathy Hochul said raising the limit to $80,000 would allow states and territories to generate more revenue.

“I believe that the leader of the majority [Chuck] Schumer and Democrats in the US Senate will help bring the bill to the last line and ensure New York State can create jobs, improve lives, and ultimately address the climate crisis, Hochul said in a statement. Said, “all of the middle class without adding to the tax burden.”

The nonpartisan Congressional Budget Office estimated that the package would increase the federal deficit by $160 billion in the coming decade. The agency also recalculated the measure’s 10-year price tag to $1.68 trillion.

with Associated Press.