Mass. delegation not jumping on SALT bandwagon

Politics of the tax deduction are tricky for Democrats

MASSACHUSETTS WAS ONE of the states most affected when the Republican-controlled Congress in 2017 capped a tax break that allowed people to deduct their state income and local property tax payments on their federal taxes. 

The so-called SALT (for state and local tax) deduction, previously unlimited, was capped at $10,000. The cap saved the federal government some $90 billion, with the bulk of the savings coming at the expense of taxpayers in a relatively small group of states, including New York, Connecticut, California, New Jersey, and Massachusetts.

 Now, as President Biden pushes for a $2 trillion infrastructure plan, some members of the now Democratic-controlled Congress have formed a SALT caucus and are threatening to vote against the plan unless the cap is repealed. “No SALT, no deal,” said Rep. Tom Suozzi, a Democrat from New York. “This is existential for my state.”

 But here in Massachusetts the congressional delegation appears to be staying out of the fray. No members of the delegation have joined the SALT caucus so far and there seems to be little appetite for playing hardball with the president, despite the potential benefits for many of their constituents.

 Rep. Ayanna Pressley, in comments to the New England Council last week, cautioned her colleagues to look at the big picture and not let the push for SALT jeopardize the infrastructure bill.

 “I think taking this red line is really losing sight of the broader package and the big fights,“ Pressley said. “There are so many critical investments in this bill that the people that we represent need.”

A spokesperson for Rep. Lori Trahan said in an email that the congresswoman supports eliminating the cap but did not explain why she has not joined the SALT caucus. Several other members of the congressional delegation did not respond to requests for comment.

 The politics of SALT are tricky. While the SALT deduction benefits a wide swath of taxpayers across many states, the biggest beneficiaries tend to be wealthy people with big homes who pay a lot of state income and property tax. The Institute on Taxation and Economic Policy estimates the richest 5 percent would receive 85 percent of the benefits if the SALT cap is eliminated.

 President Trump and Republicans capped the deduction in 2017 to help pay for tax breaks for others, including corporations. Many Democrats are convinced the GOP backed the SALT cap because its financial impact falls hardest on residents of blue states with higher tax rates.

 That’s why the issue is a tough one for Democrats now. Many Democrats from blue states want to restore the tax break to help their constituents, but that approach runs counter to the belief held by many in the Democratic Party that the wealthy shouldn’t be receiving any tax breaks.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

 New York Rep. Alexandra Ocascio-Cortez is not joining the SALT caucus. “I think it’s just a giveaway to the rich,” she said.

Vermont Sen. Bernie Sanders said he recognizes the difficult politics of SALT, but he said ideals have to trump politics in such situations. “You have got to make it clear which side you are on — and you can’t be on the side of the wealthy and powerful if you’re going to really fight for working families,” he said.