Pelosi Floats New Stimulus Plan: Rolling Back SALT Cap

Henry Connelly, a spokesman for Ms. Pelosi, said on Monday evening that she was proposing something narrower than a full SALT rollback, and that any change would be “tailored to focus on middle-class earners and include limitations on the higher end.”

“We could reverse that for 2018 and 2019 so that people could refile their taxes” and receive more money back from the government, Ms. Pelosi said in the interview. “They’d have more disposable income, which is the lifeblood of our economy, a consumer economy that we are.”

In the 2018 midterm elections, Democrats wielded the SALT limits in House campaigns against Republicans in wealthy blue-state suburbs of cities like New York, Los Angeles and Chicago. Democrats voted last year to repeal the cap, but the effort died in the Republican-controlled Senate.

Republicans called the effort hypocritical, saying that it would primarily benefit wealthy households in high-tax states. Democrats had roundly denounced the 2017 law, which included rate cuts for businesses and individuals, as a handout to the rich. But the SALT deduction overwhelmingly benefits high earners.

“The ink is hardly dry on a $2 trillion-plus emergency package,” said Senator Patrick J. Toomey, Republican of Pennsylvania. “It’s far too soon to know whether and of what nature additional legislation is needed. If we determine that another measure is necessary, it should not be the vehicle for Speaker Pelosi’s partisan, parochial wish list.”

Article source: https://www.nytimes.com/2020/03/30/business/economy/coronavirus-economic-stimulus-taxes.html