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This federal tax cap that hits Democratic areas is still in effect this year

David Lightman, McClatchy Washington Bureau on

Published in Business News

WASHINGTON -- Live in an area with a Democratic congressman? Then it's likely you were hurt more than people who live in Republican districts by the cap on deductions for state and local taxes.

And there's little hope any relief is coming until at least 2022.

The Democratic-run House last month passed legislation to eventually do away with the $10,000 per return limit on state and local tax deductions (SALT).

But asked if he would consider the ideas in the House bill, Sen. Charles Grassley, an Iowa Republican who heads the tax-writing Senate Finance Committee, said flatly, "No."

"The economic answer is this tax bill has been so good for the economy that we should not be bringing uncertainty about the tax bill by even talking about it," he told reporters last week.

The 15 most affected congressional districts, and 78 of the top 100, have Democratic congressmen, according to an analysis by the nonpartisan Tax Policy Center.

 

Critics charge all this was by design, as Republicans were eager to help people in places friendly to them.

"The states affected are generally blue. They were singled out," said Frank Sammartino, Tax Policy Center senior fellow.

A study by the Federal Reserve Bank of Atlanta earlier this year found that the 10 places gaining the least from the income tax cuts are all Democratic-leaning. California topped the list, which also included Vermont, Oregon, Washington, D.C., Hawaii, New York, Massachusetts, Minnesota, New Jersey and Maine.

Republicans wrote the 2017 tax bill that put limits on the deduction, and got no Democratic support. GOP lawmakers argued that capping the deduction would be offset by other tax breaks, notably a reduction in rates.

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