WASHINGTON—Congresswoman Katie Porter (CA-45) and Congressman Tom Malinowski (NJ-07) this week introduced the Supporting Americans with Lower Taxes (SALT) Act to provide immediate relief for middle class families residing in states with high costs of living. The bill fully restores the state and local tax deduction for Americans making less than $400,000 a year, while phasing out the deduction for those making more than $400,000. It would apply the revenue raised over a decade to strengthen Medicare with new vision and hearing coverage.
“Middle class families in Orange County have been feeling the squeeze, and the Trump tax law’s cap on the state and local tax deduction has made it worse,” said Rep. Porter. “Our tax code should provide a level playing field across states, not punish some Americans for living in regions with high costs of living. Our SALT Act will restore fairness to our tax code, with sensible guardrails to prevent abuse by the ultra-wealthy.”
“When I first ran for Congress, I promised to right the wrongs of the 2017 GOP tax bill by restoring the SALT deduction for my middle class constituents,” said Rep. Malinowski. “The proposal Representative Porter and I are putting forward would keep that promise, while remaining fiscally responsible and delivering a new Medicare benefit that our seniors have long been waiting for. This is a win-win approach that we hope will produce compromise on the SALT issue.”
The state and local tax (SALT) deduction exists to prevent Americans from being taxed again at the federal level on income already taxed and taken by their states. This deduction has been in our tax code for over a century, since the inception of the federal income tax in 1913. In 2017, then-President Trump signed a tax law that imposed a $10,000 cap on the SALT deduction through 2025. This cap discriminates against taxpayers—who earn the same incomes—based solely on where they live, and punishes states where residents have chosen to pay for better schools and services with higher state and local taxes.
Specifically, the SALT Act would:
- Eliminate the SALT deduction cap for single or joint filers that make under $400,000;
- For filers making $400,000 and above, the SALT deduction cap would start at $60,000. The $60,000 SALT cap would then be reduced at a rate of $10,000 for each $100,000 of income in excess of $400,000, so that filers making $1 million or more cannot deduct any state and local taxes.
- Require all tax filers claiming SALT deductions to attest that their total assets do not exceed $1 billion; and
- Direct the revenue raised by this bill to a new Medicare vision and hearing trust fund.
- The SALT Act is estimated to raise $150.9 billion over ten years compared to the status quo policy of maintaining a $10,000 cap through 2025, and then letting it expire entirely. This revenue would fully cover the cost of creating a Medicare hearing and vision benefit. A non-partisan analysis found that Medicare vision and hearing coverage would cost $30 billion and $89 billion, respectively, over ten years.
Click here to read the full text of the bill.