- The Washington Times - Wednesday, April 21, 2021

A co-chair of the bipartisan Problem Solvers Caucus is calling on the Biden administration to go after tax cheats as a way to offset the cost of lifting a $10,000 cap on the so-called SALT deduction.

Rep. Josh Gottheimer, New Jersey Democrat, sent a letter to Treasury Secretary Janet Yellen saying the federal government is missing out on $1 trillion a year in federal taxes that are owed, but that go unpaid.

“Shrinking the tax gap would not only fund the full return of the SALT deduction to the hardworking families of New Jersey, but it would also provide substantial resources for infrastructure spending and encourage long-term tax compliance,” Mr. Gottheimer said. “All of this would be accomplished without raising rates on families or complexity in the tax system, and not risk jeopardizing our economic recovery as we work to get through the COVID-19 pandemic.”

The cap on State and Local Tax (SALT) was passed as part of the 2017 tax cuts that then-President Trump signed into law. 

An analysis from the Tax Foundation has shown the biggest beneficiaries of lifting the cap would be high-income earners.

Mr. Gottheimer and Democratic Reps. Bill Pascrell, also of New Jersey, and Tom Suozzi of New York warned last month they would vote against President Biden’s push for the $2.25 trillion American Jobs Plan if the plan didn’t eliminate the cap on the SALT deduction, which raised taxes on some of their constituents.

The three lawmakers said, “No SALT, No Deal.”

Most Democrats in the California and New York delegations have since joined the calls to roll back the cap.

The effort, however, faces opposition from fellow Democrats, including Rep. Alexandria Ocasio-Cortez of New York, who says lifting the cap amounts to a “giveaway to the rich.”

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