H.R.430 - Securing Access to Lower Taxes by ensuring Deductibility Act; SALT Deductibility Act (119th Congress)
Summary
H.R.430, also known as the SALT Deductibility Act, proposes to amend the Internal Revenue Code of 1986 by repealing the limitation on the deduction for certain taxes, specifically state and local property and income taxes. This bill aims to remove the existing cap on the amount of state and local taxes that individuals can deduct from their federal income taxes. The proposed change would apply to taxable years beginning after December 31, 2024.
Expected Effects
If enacted, H.R.430 would allow taxpayers to deduct the full amount of their state and local taxes, potentially reducing their federal tax liability. This could lead to increased disposable income for some taxpayers, particularly those in states with high property and income taxes. However, it could also decrease federal revenue, potentially impacting government programs and the national debt.
Potential Benefits
- Increased disposable income for taxpayers in high-tax states.
- Simplification of tax filing for those previously affected by the deduction limit.
- Potential boost to state and local government revenues due to increased tax payments.
- May incentivize investment in local communities through property ownership.
- Could reduce the perceived unfairness of the tax system for some taxpayers.
Potential Disadvantages
- Reduced federal tax revenue, potentially leading to increased national debt or cuts in federal programs.
- Disproportionate benefit to higher-income taxpayers who tend to pay more in state and local taxes.
- Potential for increased tax burden on lower and middle-income individuals if federal revenue shortfalls are addressed through other tax increases.
- May exacerbate existing inequalities between high-tax and low-tax states.
- Could incentivize higher state and local spending, potentially leading to inefficient resource allocation.
Most Disadvantaged Areas:
Constitutional Alignment
The bill falls under the purview of Congress's power to lay and collect taxes, duties, imposts, and excises, as outlined in Article I, Section 8, Clause 1 of the Constitution. The Sixteenth Amendment grants Congress the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration. The bill does not appear to infringe upon any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).