Advisors urge Congress to weigh debt reduction against SALT deduction
Gerry Goldberg’s clients have varying reactions to congressional efforts to remove the limit on deductions for state and local taxes that has been in place for several years.
Goldberg, CEO and co-founder of GYL Financial Synergies in West Hartford, Connecticut, works with investors in states with high income and property taxes, such as New York, New Jersey and his home base, as well as clients in states without an income tax, such as Florida.
His clients in the Northeast states “would like to see some sort of relief to the extent it’s possible,” he said. Those in Florida have a different attitude: “They say, ‘We’re just fine with the limitations in place.’”
The dichotomy of views is a window into the political challenges facing legislation that would remove the SALT cap, which was implemented as part of the 2017 Tax Cut and Jobs Act to make up for the tax revenue lost by the bill’s long roster of tax reductions.
Ever since the bill was enacted, lawmakers from states with high taxes have been pushing to eliminate the cap. Rep. Josh Gottheimer, D-N.J., and a bipartisan group of co-sponsors introduced a bill earlier this year that would restore the full SALT deduction.
Proponents lifting the cap say it would provide a much-needed tax cut for residents of high-tax states. Opponents — and a recent study by the National Taxpayers Union Foundation — say the SALT deduction mostly benefits the wealthy and that the cap should remain in place.
Although Democrats from blue states have been leading the charge to lift the cap, a number of Republicans also support the move. The Wall Street Journal recently reported some GOP resistance to a House tax-reform bill until it includes a provision to eliminate the SALT cap.
Advisors say they
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