The Wall Street Journal: Lifting of cap on SALT deductions is not in Biden’s reconciliation-bill framework — for now, that is


WASHINGTON — High-income coastal professionals look likely to emerge as significant winners from the Democrats’ proposed tax agenda, escaping rate increases and regaining a deduction for state and local taxes that was capped at $10,000 in 2017.

The potential result: Many residents of New York, New Jersey, California and other states who make more than the $400,000 threshold that President Biden set for tax increases could end up with tax cuts atop the tax cuts they got four years ago.

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“The combination of keeping the low tax rate and being able to fully deduct state and local taxes gives these families an even bigger benefit than even the 2017 tax writers intended,” said Brian Riedl, a former Senate Republican aide who is a senior fellow at the Manhattan Institute, a conservative think tank.

The details aren’t final yet, and lawmakers still need to vote on this as part of the Biden administration’s broader healthcare, education and climate-change agenda. The break wasn’t in the framework that the president released Thursday, but Democratic lawmakers said they expect changes to the cap to be added before a final vote.

Democrats haven’t settled on a plan, but one option would repeal the cap for 2022 and 2023 and reinstate it in 2026 and 2027.

An expanded version of this report appears at

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