U.S. Treasury Public Affairs Assistant Secretary Tony Sayegh on Monday explained why the elimination of the state and local tax deduction should remain in the Senate’s tax reform plan.
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The Senate bill would fully repeal the SALT deduction, which leaves Americans in high-taxed states such as New York, New Jersey and Illinois concerned with paying more in taxes.
“I’m sympathetic. I’m a New Yorker. I understand. Let’s remember we’re talking about six states where essentially the highest income earners get to deduct high state taxes that’s not really the responsibility of the federal government to subsidize, and in order for us to really expand the base, we need to get rid of a lot of these kind of deductions,” he told FOX Business’ Trish Regan on “The Intelligence Report.”
Sayegh said the tax benefits included in the Senate bill will outweigh the negative effects that eliminating the SALT deduction may have on those in high-tax states.
“The vast majority of people losing that deduction still will have lower taxes because we are reducing their rates, we’re expanding the child tax credit, we’re doubling the standard deduction making the first $24,000 of their income not taxed if you are a family, we’re getting rid of the alternative minimum tax which is a backward tax,” he said.
Sayegh believes that the Senate bill will boost the American economy and will be passed by years’ end.
“We are very encouraged because nine of the leading economists in the country sent the Secretary of the Treasury Steven Mnuchin a letter. It appeared in the Wall Street Journal where they confirmed what we’ve been saying all along, which is you experience significant economic growth with what we are trying to do with tax reform,” he said.
However, according to the Congressional Budget Office, the Senate’s plan would increase the deficit by $1.4 trillion over the next 10 years.