Conscious of how it could affect Speaker Nancy Pelosi’s stance in negotiations, California Democrats aren’t drawing the same red line as their East Coast colleagues who are demanding that President Biden’s infrastructure package include a full repeal of the $10,000 cap set during the Trump administration on state and local tax deductions.
California, where taxpayers face higher property, local and state taxes than most other states, was among those hit the hardest by the cap that Republicans put in place in 2017. The state is also represented by the largest congressional delegation in the country, leading some to question why it isn’t throwing its weight behind demands to repeal the cap.
In interviews, multiple California Democrats acknowledged how not being able to deduct the full amount of state and local tax, also known as SALT, has impacted middle and upper class residents in their districts, saying that they want to see the cap repealed. But they said it’s too soon to draw a line in the sand on a specific policy when the legislation hasn’t even been written. It’s not even clear yet whether the tax and infrastructure portions will be one bill or two.
Democratic Rep. Anna Eshoo, whose Menlo Park-area district was the top beneficiary of the deduction before it was capped, said removing it remains a priority, but she doesn’t see drawing a red line as the best strategy.
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