Other taxpayers in the top 5% of earners would see the small tax hikes in the current House plan turn into tax cuts with the addition of a more generous SALT deduction. Taxpayers earning $165,181 to $401,600 would see their incomes rise 0.9% with an unlimited SALT deduction, compared with a 0.3% after-tax decrease without SALT relief, according to the data.
The figures shed light on a key debate among House Democrats over how to address the politically important tax break that benefits residents of Democratic strongholds, including New York, New Jersey and California. The tax portion of the economic legislation that passed the House Ways and Means Committee earlier this week omitted any plans to address SALT, instead leaving the issue to be negotiated by Democratic leaders.
