[Congressional Record Volume 169, Number 71 (Thursday, April 27, 2023)] [House] [Pages H2072-H2077] From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
Date: 2023-04-27
Chamber: HOUSE
Mr. MIKE GARCIA : I rise today to encourage both parties in this Chamber to add a pinch of salt to our legislative diets for the sake of the middle-class taxpayers. The 2017 Tax Cut and Jobs Act or TCJA was the catalyst under the previous Trump administration that fueled the booming economy from 2018 through 2020 before COVID impacted us and before President Biden and Speaker Pelosi went on their out-of-control spending sprees. These out-of-control spending sprees ultimately led to record-high debt and record-high inflation rates that we are very familiar with here today. The TCJA or the Tax Cuts and Jobs Act actually lowered taxes for all tax brackets and doubled the standard deduction for single and married filers. Mr. Speaker, the TCJA had a bit of a middle finger that was aimed at primarily blue states like mine, the great State of California. It imposed a $10,000 State and local tax cap or SALT cap for both married and single tax filers. What this meant is that if you paid more than $10,000 in State and local income tax or property tax, you couldn't actually deduct more than $10,000 of those taxes within your Federal tax returns.  Despite overall lower tax rates and a doubling of the standard deduction, many middle-class Americans were actually hurt by this SALT cap and were net negative within the construct of the TCJA from 2017. At the time in 2017, a $10,000 limit seemed like a lot, but in today's dollars, because of the record-high inflation I mentioned earlier we have seen over the last 30 months, $10,000 now behaves like the equivalent of $7,000 today in terms of the deduction. At the time in 2017, only California, New York, and New Jersey were really affected by this cap. Since 2017, the median home value has nearly doubled in almost every State nationwide. Now States that have any income tax or any property tax are hearing from voters and their constituents that this SALT cap at $10,000 is actually affecting them, as well. At the time in 2017, this was seen as a white-collar, upper-class problem, but in California, New York, and New Jersey, we knew better. We knew that if you owned a home and had a job, you were likely affected by this cap. This is very much a middle-class, blue-collar taxpayer problem in my State and especially in my district. At the time in 2017, conservatives paid no attention to the fact that the cap was $10,000, whether or not you were married. You could be single; $10,000 cap. Married; $10,000 cap. They failed to recognize that this was, in fact, a marriage penalty that they were imposing. Today, Mr. Speaker, I rise to encourage us all to add a pinch of salt to our legislative agenda. Even doubling the deduction from $10,000 to $20,000 would still generate 75 percent of the estimated $800 billion of revenue created by this cap over a 10-year period. We can still achieve most of the revenue from billionaires with a $20,000 cap, but we also with that $20,000 cap would allow middle-class Americans to keep more in their pocket. To my colleagues on this side of the aisle who see this as a California problem and say, hey, screw California, I won't support subsidizing California's broken tax policies. Well, I will remind you that if you ignore these challenges, you pretend like these problems don't affect you, you don't screw California because ultimately, California screws you.  Our problems become your problems, our State problems become Federal problems, and our tax policies influence Federal tax policies. I also want to remind folks that California's GDP is roughly 750 percent larger than States like Tennessee and is actually 150 percent larger than the next biggest State's GDP. In California, we don't talk about the burden of subsidizing the other States in terms of GDP and revenue, so we should not look at the SALT deduction cap as an issue of States subsidizing California on the tax side. Make no mistake, Mr. Speaker. Californians pay way too much in taxes, and Sacramento is beyond dysfunctional. It is actually offensive how much we pay in taxes, but we can rightsize the SALT deduction limit at the Federal level to account for today's realities, and this would help all Americans. The TCJA turns into a pumpkin and expires in 2025, but our party and conservatives have an opportunity to address the discrepancies of the SALT cap within TCJA before then, and we have an opportunity to shape this policy while we have the majority. Mr. Speaker, on our side of the aisle, we have a significant number of Members from California, New York, and New Jersey whose constituents will accept nothing less than a real legislative victory on the SALT cap. Why should they accept anything less? Their daily reality is the madness of bad economic policies that come from Sacramento and Albany and are compounded by bad policies here in D.C. like the SALT cap. I am telling you, Mr. Speaker, a pinch of salt in this session will ensure fiscal conservatives keep the reins for another Congress. Ignoring the issue ensures that the far left will not only regain control of the spending side but also regain control of our tax codes that are going to be up for a vote in 2025. Congratulating the Hart Girls' Soccer Team