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House rejects bid to increase SALT tax deduction cap

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In the House, a proposal by New York Republicans to temporarily raise the cap on state and local tax (SALT) deductions for most married couples was defeated. This cap, set at $10,000, was established during President Donald Trump’s term and has since caused higher tax bills for residents in states like New York, New Jersey, and California. The attempt to double the deduction cap aimed to alleviate this burden but was turned down with a 195-225 vote.

This issue is especially crucial for Republicans in areas where President Joe Biden won in 2020, as it gave them a chance to demonstrate their efforts to secure tax relief for their constituents. The vote’s timing was noteworthy, coming right after Democrats reclaimed a House seat in New York, adding to the political stakes.

The debate also saw Democrats reminding voters that the Republican Party initially imposed the $10,000 SALT cap as part of the 2017 tax cuts. Critics argue that any increase in the cap would primarily benefit wealthier households, while its current form significantly reduces the federal treasury’s revenue. The SALT cap, along with other parts of the 2017 tax law, is set to expire at the end of 2025, prompting discussions on tax policy for future legislation.

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