<div>                       Rep. Smith: 'Largest benefits of SALT repeal would go to the highest earners'   <table><tr><td>June 25, 2019 - PRESS RELEASE</td><td colspan="3"><a href="https://waysandmeansforms.house.gov/components/redirect/r.aspx?ID=488118-3215566">Rob Damschen</a></td><td>(202) 226-4774</td><td> </td></tr><tr><td> </td><td> </td><td><a href="https://waysandmeansforms.house.gov/components/redirect/r.aspx?ID=488119-3215566">Jesse Solis</a></td><td> </td><td> </td><td> </td></tr><tr><td> </td><td> </td><td> </td><td> </td><td> </td><td> </td></tr></table>    WASHINGTON, D.C. – The top Republican on the House Ways and Means Select Revenue Measures Subcommittee Adrian Smith (R-NE) delivered the following opening statement at a Subcommittee Hearing on How Recent Limitations to the SALT Deduction Harm Communities, Schools, First Responders, and Housing Values. Before the start of today’s hearing, Rep. Smith and Rep. Kevin Brady (R-TX), the top Republican on the Committee, sent a <a href="https://waysandmeansforms.house.gov/components/redirect/r.aspx?ID=488120-3215566">letter </a>to Ways and Means Committee Chairman Richard E. Neal (D-MA) and Select Revenue Measures Subcommittee Chairman Mike Thompson (D-CA). <a href="https://waysandmeansforms.house.gov/components/redirect/r.aspx?ID=488121-3215566">CLICK HERE </a>to read the full letter. <a href="https://waysandmeansforms.house.gov/components/redirect/r.aspx?ID=488122-3215566">CLICK HERE </a>to watch the hearing. Remarks as prepared for delivery:  <div class="indented">"Thank you to our witnesses.</div>  <div class="indented">"Let me begin by saying this: property taxes and other high state and local taxes are a problem not just on the coasts, but all across our country.</div> <div class="indented">"In Nebraska the problem with property taxes is particularly acute in rural, agricultural areas like the Third District where high land values in concert with a flawed state school funding formula lead to a massive property tax burden on producers, regardless of the state of commodity prices.</div> <div class="indented">"While the Nebraska legislature has not yet found a solution, we can at least be thankful a preeminent question for Nebraska’s state senators and governor is 'How can we reduce the tax burden on Nebraskans and make our state a more attractive place to live?' not 'How can we generate more revenue?'</div> <div class="indented">"As we review the impact Tax Cuts and Jobs Act on Americans and on our economy, it is important we consider provisions and proposed changes within the full context of the law.</div> <div class="indented">"The SALT cap must also be viewed through the prism of lower overall tax rates for families in TCJA. Even with the SALT cap in place, most families have lower overall federal tax bills now than they did prior to TCJA.</div> <div class="indented">"Before TCJA, the deductibility of state and local taxes was already limited in various ways, including under AMT and through the Pease limitation. In addition, the SALT deduction is only useful if your itemized deductions exceed the standard deduction.</div> <div class="indented">"In TCJA we doubled the standard deduction to $12,000 for individuals and $ 24,000 for married couples – meaning, even with a $10,000 cap on SALT deductions, a married couple could cumulatively spend $24,000 on state and local taxes before they are guaranteed to be affected by this cap.</div> <div class="indented">"For example, for a married couple with no children in California – I’m picking on California because it is known for having the highest state income tax rates, not because it is your home, Mr. Chairman – which rents its home wouldn’t pay more in state income taxes than the value of their standard federal deduction until their income exceeds $300,000.</div> <div class="indented">"This highlights one of the biggest problems with proposals to repeal or increase the SALT caps – we know the benefit of such a repeal, which is estimated to cost $673 billion over the next eight years, would accrue largely to the highest income taxpayers in high tax states.</div>  <div class="indented">"More fundamentally, the SALT deduction is a matter of fairness to taxpayers across the country. Tax reform aims to achieve a principle that is straightforward, at least to folks outside the Beltway, those with similar levels of income have a similar federal income tax bill. We shouldn’t effectively have one federal income tax rate for the wealthiest portions of California and New York, and another, much higher, rate for Nebraska or South Carolina.</div> <div class="indented">"If some communities want to have high levels of government spending in their community, that is completely fine so long as they pay for</div> <div class="indented">it. Regressing to the prior-law SALT deduction instead would tell communities to spend more, because they can shift those costs to the rest of the country. Such policy is both inefficient and unfair.</div> <div class="indented">"We also know the largest benefits of SALT repeal would go to the highest earners, with the average family making $1 million or more per year seeing a tax cut of $67,000, and the average family over $3 million per year receiving at tax cut of $140,000 under such a proposal.</div> <div class="indented">"Contrast that with our approach when we crafted this SALT limitation.</div> <div class="indented">"Under TCJA a single mom with two kids making $ 50,000 per year has no federal income tax liability, and the SALT cap was specifically designed to ensure a typical family earning up to $200,000 per year would be held harmless, as the average SALT deduction pre-TCJA for that group was in the $7,000 range.</div> <div class="indented">"The average middle -class family making $50,000 to $75,000 would receive less than $5 per year if the SALT cap were repealed.</div> <div class="indented">"In an environment where just last week the majority chose to mark up legislation to expand provisions like the Earned Income Tax Credit and the deductibility of the Child Tax Credit, this push to enact a giveaway like expanding or repealing SALT caps is baffling.</div> <div class="indented">"There are many ways we could be working on a bipartisan basis to improve the Internal Revenue Code. While I hope we can engage in a constructive conversation today, I don’t think this is one of them.</div> <div class="indented">"I yield back."</div> ###</div>

Repealing SALT Cap Would Benefit Wealthy, Rep. Adrian Smith Says

Repealing SALT Cap Would Benefit Wealthy, Rep. Adrian Smith Says

U.S. House of Representatives

U.S. House Ways and Means Committee

U.S. House Ways and Means Tax Subcommittee

The Tax Cuts and Jobs Act lowered tax bills for most families, even with the cap on the state and local tax deduction, and repealing the cap would primarily benefit the highest-income taxpayers in high tax states, House Ways and Means Select Revenue Measures Subcommittee ranking minority member Adrian Smith, R-Neb., said at a June 25 subcommittee hearing.

The Tax Cuts and Jobs Act lowered tax bills for most families, even with the cap on the state and local tax deduction, and repealing the cap would primarily benefit the highest-income taxpayers in high tax states, House Ways and Means Select Revenue Measures Subcommittee ranking minority member Adrian Smith, R-Neb., said at a June 25 subcommittee hearing.