On Monday, Representative Josh Gottheimer (D-New Jersey) — one of the leading advocates for the repeal of the cap on the state and local tax (SALT) deductions — stated that the repeal of SALT deductions “could be offset by cracking down on tax cheats,” the first proposal from Democrats as a way to pay for the loss of tax revenue generated under the current cap. Representative Gottheimer stated that increasing funding for the Internal Revenue Service to boost enforcement efforts could yield enough money to pay for reinstating the full SALT deduction as well as a portion of President Biden’s $2.25 trillion infrastructure package.
Additionally, last week a group of California House Democrats sent a letter to President Biden urging him to undo the cap on SALT deductions in his infrastructure legislation. The letter from the California congressional delegation follows a separate letter sent from the New York House congressional delegation earlier last week. However, while the New York lawmakers threatened to oppose the infrastructure bill entirely if it does not repeal the SALT deduction cap, the California Democrats stopped short of making a similar threat in their letter while advocating for the cap's removal. Forty-one House Democrats from California — all but Speaker Nancy Pelosi (D-San Francisco) — signed onto the letter.