SALT Fairness Act of 2023

The SALT Fairness Act of 2023, also known as Bill 118 hr 160, is a piece of legislation introduced in the US Congress aimed at addressing the issue of state and local tax (SALT) deductions. The bill seeks to restore the full deductibility of state and local taxes for individuals and families, which was limited under the Tax Cuts and Jobs Act of 2017.

The SALT Fairness Act of 2023 would allow taxpayers to deduct state and local taxes up to $10,000 for single filers and $20,000 for joint filers, regardless of their income level. This would provide relief to taxpayers in high-tax states who were negatively impacted by the SALT deduction cap imposed by the 2017 tax law.

Supporters of the bill argue that limiting the SALT deduction disproportionately affects residents of high-tax states, such as California, New York, and New Jersey, who already contribute a significant amount of federal tax revenue. They believe that restoring the full deductibility of state and local taxes would help alleviate the financial burden on middle-class families and promote economic growth in these states. Opponents of the bill, however, argue that restoring the full SALT deduction would primarily benefit wealthier individuals and exacerbate income inequality. They contend that the SALT deduction primarily benefits high-income earners and that the federal government should not subsidize high-tax states at the expense of lower-tax states. Overall, the SALT Fairness Act of 2023 has sparked debate among lawmakers and stakeholders on the best approach to tax policy and the distribution of federal tax benefits. The bill's fate remains uncertain as it makes its way through the legislative process in Congress.