The proposed elimination of state and local tax deductions (SALT) is one of the most debated parts of the Senate tax plan that is dividing many politicians on both of the aisle.
Continue Reading Below
Rep. Chris Collins (R-N.Y.) on Monday said that if the taxes on the wealthy citizens of New York were lowered, eliminating the SALT deductions wouldn’t be a problem for The Empire State.
“Well it goes back to our governor’s 'millionaire’s tax' where we’re taxing people at 8.82%. Where Pennsylvania’s 3%, Florida is 0%, Texas is 0%, even a state like Massachusetts is 5%. So we have egregious taxes on what we call the ‘millionaire's tax,’ which never seems to sunset even though it is. So our governor in Albany politics are driving the wealthy out of our state and it’s not changing,” he told FOX Business’ Liz Claman on “Countdown to the Closing Bell.”
Maine Senator Susan Collins (R) believes SALT should remain in the Senate bill as long as the corporate tax rate is lowered to 22% instead of the proposed 20%.
"The House made both of them permanent. I think that is a far better way to go. I also think the reduction in the business tax rate is too steep, and that we could go to 22%, and then use that money, which is about $200 billion, to restore the tax deduction for state and local property taxes. That would really help middle-income taxpayers," Sen. Collins told ABC News.
The New York Representative Collins addressed how eliminating the SALT deduction would impact different parts of his state.
“My constituents in upstate New York with average incomes under $60,000 living in average homes valued at $152,000 aren’t taking these deductions now. So within my district, the Western New York district, it’s a non-issue, but in Long Island [and] the five boroughs, it certainly is,” he said. “If they change the corporate to 22% and put some things back, I would be fine with that, we gotta get off the 35%.”
On Thursday, House Republicans passed their tax bill with a final vote of 227-205, while the Senate will vote on its version after Thanksgiving.
Rep. Collins voted “yes” on the house version of the tax bill, but prefers certain elements of the Senate bill.
“When it comes to our differences between our bill and the Senate bill they are not that large. We have four brackets, they have seven. They are treating pass-through entities a little different; I actually like the Senate bill better when it comes to that. They’ve added back the medical reduction expense for those itemizing that may have catastrophic medical expenses. I actually like that better,” he said.
Collins also discussed why he supports the elimination of the individual mandate under ObamaCare.
“Probably the biggest difference is [the Senate] repealing the individual mandate under ObamaCare, which again I support that, it created an extra pool of money to do things like write off medical expenses,” he said.