Rep. Mike Garcia, R-Santa Clarita, has introduced his first piece of legislation, which would repeal the state and local tax deduction cap created in the 2017 Tax Cuts and Jobs Act.
Taxpayers who itemize their deductions can deduct what they have paid in state and local taxes, and can elect to deduct state and local general sales taxes instead of income taxes, but cannot deduct both, according to the IRS.
Under the Tax Cuts and Jobs Act, there is a $10,000 cap on the state and local tax itemized deduction and it is set to expire in 2025. Before it was enacted in 2017, there was no limit.
Garcia’s House Resolution 202, titled the State and Local Tax (SALT) Fairness Act, aims to put an end to the cap.
“One of my top priorities in Congress from day one has been to repeal the SALT deduction cap, which is why the first bill I am introducing in Congress would repeal the deduction cap,” said Garcia in a prepared statement Monday.
The congressman said many Californians have moved out of the state in recent years due to “suffocating” high property taxes and living and energy costs.
“While I am a strong proponent of cutting taxes, the simple fact is we can’t wait any longer to act. The Tax Cuts and Jobs Act of 2017 made progress in many ways, but the cap it put on SALT deductions was not one of them,” said Garcia.
“While this bill would greatly help Californians by removing the SALT deduction cap, I will continue to advocate for needed tax cuts,” he added. “I am happy and willing to work with anyone from any political party to deliver tax relief for my constituents, and I will continue fighting for residents of CA-25 to be able to keep more of their hard-earned money.”
H.R. 202 was introduced in the House of Representatives on Jan. 5 and was referred to the House Committee on Ways and Means that same day.