Trump's plan to eliminate SALT will shave 10% off the value of your home: Pelosi

Tax Reform FOXBusiness

(AP)

House Minority Leader Nancy Pelosi (D-Calif.) said on Thursday that the Trump administration’s plan to eliminate state and local tax deductions (SALT) will cause home values to fall by 10%.

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“Another assault on the middle class is the state and local tax deductions … The average deduction is $16,000; [you] no longer have that deduction. You will lose it under this plan. Not only that, it's been reported by realtors that … you'd lose 10% of the value for your home ... it's just a rip off of the middle class,” Pelosi said.

Pelosi, who represents California, is from one of the high-tax states that will be most affected by the elimination of state and local tax deductions. Others include New York, New Jersey and California.

And while the Senate’s fiscal year 2018 budget blueprint passed the House on Thursday, it did so without the support of many of the lawmakers from these specific states. Twenty Republicans voted against the measure, including 7 New York lawmakers and 4 from New Jersey, because the measure was perceived as a preface to the elimination of the deductions.

“After the Senate recently added anti-SALT language to their budget resolution that was not in the earlier passed House version, I decided not to vote in favor of today's budget vote unless a workable solution is identified to this issue,” Congressman Lee Zeldin (R-N.Y.) said in a statement after the budget vote.

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House Ways and Means Committee Chair Kevin Brady said on Thursday he would work with these congressman to find a solution, according to Reuters, because “they made it clear they need this problem solved before they vote ‘yes’ on tax reform.”

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Eliminating the popular deductions could increase federal revenue by $1.3 trillion over the next decade, according to the Tax Policy Center. However, as a result, about 24% of taxpayers nationwide would see an increase in taxes, the Tax Policy Center said. Those increases would be outsized for residents in high-tax states such as New York and California, where resident taxpayers would pay more than 30% of the tax increase from trashing the deduction. Additionally, individuals with incomes in excess of $100,000 would have the largest tax increase in both dollars and as a percentage of income – paying 90% of the increase associated with eliminating SALT.

The administration has said that eliminating the deduction would level the playing field for all states and take the federal government “out of the business of subsidizing states.”

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