The National Governors Association (NGA) has joined Americans Against Double Taxation, a coalition comprised of state and local government organizations, education and other public service providers and housing organizations. All of these critically important stakeholders have come together to launch a robust campaign to preserve the state and local tax deduction (SALT) in any comprehensive tax reform proposal. The coalition, which successfully preserved SALT in the tax reform package signed by President Ronald Reagan in 1986, sent a letter to the leadership of the House Ways and Means Committee and the Senate Finance Committee to urge them to ensure that Americans can continue claiming this vital deduction.
One of the six original federal tax deductions, SALT has been a staple of the federal tax code for over 100 years. Since 1913, SALT has helped support vital investments in infrastructure, public safety, homeownership and education and provided states and local governments with the financial flexibility to meet the needs of their constituents. SALT also prevents double taxation of Americans by allowing taxpayers to claim a deduction for the state and local taxes they have already paid from their incomes.
Deductibility of state and local taxes has contributed to the stability of state revenues that are essential for providing public services. As Congress considers tax reform, governors encourage them to avoid changes to the tax code that would undermine the ability of state and local governments to meet the needs of the citizens they serve.
Eliminating state and local tax deductibility exposes a higher share of an itemizing taxpayer’s income to federal taxation because it adds back mandatory payments of state and local taxes already paid as taxable income.
To learn more about the coalition, visit www.americansagainstdoubletaxation.org.