State and Local Tax Deduction Relief Included in Senator Sanders’ Budget Proposal

On Tuesday, Senate Budget Chairman Bernie Sanders (I-Vermont), indicated a willingness to adjust the federal state and local tax (SALT) deduction in a draft outline of a budget resolution, stating in an interview “I have a problem with extremely wealthy people being able to get the complete deduction.”  The leaked outline fails to provide specifics on how the updated write-off proposal would work; however, the $120 billion allocated in Senator Sanders’ plan is not enough funding to cover a permanent, full repeal of the $10,000 SALT cap on the write-off. According to an estimate of Representative Tom Suozzi’s (D-New York) bill to restore the tax break, fully repealing the SALT cap would cost about $385 billion. Senate Democrats plan to vote on a budget in July, setting up a fast-track process to pass President Biden’s agenda in the Fall.