Bonds

Santos’s SALT cap bill not likely to go very far

Rep. George Santos’s, R-N.Y., introduction of a bill that would raise the federal limit of deductions to $50,000 for individuals or $25,000 for married individuals adds to the recent pile on of efforts by Congressional members to raise or remove the cap entirely, but it isn’t likely to get anywhere due to the Congressman’s nefarious reputation.

Santos’ bill is one of three efforts, which also includes a measure by Rep. Mike Garcia, R-Calif., that would eliminate the cap and make it retroactive and from his own state, Rep. Michael Lawler, R-N.Y. to eliminate the so-called “SALT marriage penalty” by doubling the cap to $20,000 for a married couple. On top of those, a bipartisan SALT caucus, relaunched from its efforts in the previous Congress, has formed to help lift the cap.

“New York has one of the highest tax rates in the country,” Santos said on the House floor in his introduction of the bill. “In 2018, for Nassau County the average SALT amount–property tax, income or sales tax liability–reported among itemizing filers was $30,227.21 but due to the $10,000 cap, the average SALT deduction actually claimed was $9,023.79.”

“Let it be known that the SALT tax is not a tax break for the wealthy but a tax relief for working-class families,” Santos added. “This is about the 118th Congress working to ease the affordability burden in high-tax states like New York. The cost of living continues to plague New Yorkers. Raising the cap on SALT will provide real tax relief, not just to New York’s Third Congressional District but to all in America.”

The issue is popular for lawmakers in high tax states such as New York and is important for municipal issuers, who’ve often complained about how the cap limits their ability to impose further taxes.

But Santos’ reputation in Congress, after famously lying about nearly all of his credentials on the campaign trail, make it likely that this bill won’t get very far. This also marks the first bill the young Congressman has introduced after being sworn in at the start of this new Congress.

“I’m not sure many in Congress take him seriously and I suspect that he won’t have a lot of other members of Congress lining up behind his version because of all of his problems,” said Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center. 

“On the other hand, he’s a representative from New York, a state that strongly supports eliminating or lifting the cap,” Rosenthal said. “And so the fact that he introduced lifting the cap at least some signals his support for New York’s effort but I don’t think Congressman Santos’s tax bill will be the vehicle that everyone falls behind because of the baggage that Congressman Santos carries with him.”

Rep. Nick LaLota, R-N.Y., a fellow Long Islander who has called for Santos’ ouster, said he would reject Santos’ proposal despite being in favor of increasing the cap. But Santos’ efforts to demonstrate his seriousness as a member of Congress could still help the efforts to lift or remove the cap entirely, despite his individual efforts not likely to get anywhere.

“If in fact somebody else introduces a similar measure, or even a somewhat different measure with a larger cap, Congressman Santos can tell his constituents that he helped the effort and so I suspect that’s what Congressman Santos is about,” Rosenthal said.

Articles You May Like

Front end curve pressure moves yields higher; mutual fund inflows tick up
Brexit red tape costs Scottish salmon producers millions, says trade body
Why good news for Japan may be bad news for hedge funds
UK MPs to be alerted to threat of Chinese cyber attacks
Europe’s leaders have woken up to hard power