Democrats' feud over SALT tax repeal threatens to derail Biden's $2.25T spending plan
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A growing rift among Democrats over whether to repeal a Trump-era limit on state and local tax deductions is threatening to derail President Biden's $2.25 trillion tax and spending plan.
Many centrist Democrats from high-tax states such as New York, New Jersey and California have demanded that Biden's proposal, dubbed the American Jobs Plan, include a full repeal of the $10,000 SALT deduction cap.
Their effort gained momentum last week, when a group of 30-member coalition of bipartisan House members threatened to withdraw support for any changes to the tax code in the measure unless it also included a complete restoration of the SALT deduction. Biden has called for raising the corporate tax rate to 28% from 21% and increasing the global minimum tax rate paid by U.S. businesses to 21% in order to fund the multitrillion-dollar initiative.
PELOSI OPENS DOOR TO LIFTING SALT TAX CAP IN BIDEN'S $2.25T SPENDING BILL
"This issue is so critical to our state and our constituents that we will reserve the right to oppose any tax legislation that does not include a full repeal of the SALT limitation," the group – which is calling itself the SALT Caucus – said in a letter to congressional leaders.
With a narrow 218-212 majority in the House, Democrats can risk losing the support of just a handful of members without imperiling the bill's odds of passing.