Repealing the $10,000 cap on state and local tax (SALT) deduction could be offset by cracking down on tax cheats in this
proposal from Democrats.
Representative Josh Gottheimer said that by increasing funding for the Internal Revenue Service to enforce efforts would
yield enough money to pay for reinstating the full SALT deduction as well as a portion of President Biden’s $2.25 trillion
infrastructure package.
Gottheimer, along with several other House Democrats and a few Republicans from high-tax states, have said they will
not support Biden’s infrastructure bill if it does not address re-instituting the full SALT deduction.
Restoring the full deduction would cost the government $88.7 billion in revenue for 2021 alone, according to the Joint
Committee on Taxation.
Gottheimer and Representative Ro Khanna would want to raise minimum audit levels on corporations and high-earning
individuals as a way to help close the gap in lost revenue. Khanna believe this bill could raise $1.2 trillion over a decade.
Some congressional Democrats and some Republicans support increased IRS enforcement as a way to raise more tax
revenue without having to raise tax rates.