S. 437 - Stop the Attack on Local Taxpayers (SALT) Act

116TH CONGRESS
1ST SESSION

S. 437

To amend the Internal Revenue Code of 1986
to repeal the dollar limitation on the deduction
for State and local taxes and restore the 39.6 percent
individual income tax rate bracket.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 11, 2019

Mr. MENENDEZ (for himself, Mr. SCHUMER, Mr. WYDEN,
Mr. DURBIN, Mrs. MURRAY, Mr. BOOKER, Mr. CARDIN,
Ms. HARRIS, Mr. VAN HOLLEN, Mrs. FEINSTEIN, Mrs. GILLIBRAND,
Ms. DUCKWORTH, Mr. BLUMENTHAL, and Mr. MURPHY)
introduced the following bill; which was read twice
and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to repeal the dollar limitation on the deduction for State and local taxes and restore the 39.6 percent individual income tax rate bracket.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the "Stop the Attack on Local Taxpayers Act" or the "SALT Act".

SEC. 2. REPEAL OF DOLLAR LIMITATION ON DEDUCTION FOR STATE AND LOCAL TAXES.

(a) IN GENERAL. — Section 164(b)(6) of the Internal Revenue Code of 1986 is amended by striking all that follows "January 1, 2026" and inserting ", foreign real property taxes (other than such taxes paid or accrued in carrying on a trade or business or an activity described in section 212) shall not be taken into account under subsection (a)(1).".

(b) EFFECTIVE DATE. — The amendment made by this section shall apply to taxable years beginning after December 31, 2018.

SEC. 3. RESTORATION OF 39.6 PERCENT RATE BRACKET FOR INDIVIDUALS.

(a) IN GENERAL. —

(1) MARRIED FILING JOINTLY AND SURVIVING SPOUSES. — The table contained in section 1(j)(2)(A) of the Internal Revenue Code of 1986 is amended by striking "Over $400,000" and all that follows and inserting the following:

(2) HEADS OF HOUSEHOLDS. — The table contained in section 1(j)(2)(B) of such Code is amended by striking "Over $200,000" and all that follows and inserting the following:

(3) UNMARRIED INDIVIDUALS. — The table contained in section 1(j)(2)(C) of such Code is amended by striking "Over $200,000" and all that follows and inserting the following:

(4) MARRIED FILING SEPARATELY. — The table contained in section 1(j)(2)(D) of such Code is amended by striking "Over $200,000" and all that follows and inserting the following:

(b) INFLATION ADJUSTMENTS TO 39.6 PERCENT RATE. —

(1) IN GENERAL. — Section 1(j)(3)(A) of the Internal Revenue Code of 1986 is amended by inserting "(before January 1, 2020, in the case of so much of such tables as relates to amounts to which the 39.6 percent rate applies)" after "January 1, 2019".

(2) ADJUSTMENT RULES. — Section 1(j)(3)(B) of such Code is amended —

(A) in the matter preceding clause (i), by inserting "(December 31, 2019, in the case of so much of such tables as relates to amounts to which the 39.6 percent rate applies)" after "December 31, 2018",

(B) in clause (i), by inserting "except as provided in clause (iv)," before "subsection (f)(3) shall", and

(C) by striking "and" at the end of clause (ii), by striking the period at the end of clause (iii), by striking the period at the end of clause (iii) and inserting ", and" , and by adding at the end the following new clause:

"(iv) in the case of so much of such tables as relates to amounts to which the 39.6 percent rate applies, subsection (f)(3) shall be applied by substituting 'calendar year 2018' for 'calendar year 2016' in subparagraph (A)(ii) thereof.".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after December 31, 2018.