WASHINGTON — The House voted on Thursday to temporarily eliminate a tax increase on some high-earning residents of states like California and New York that was included in President Trump’s 2017 tax overhaul, with some Republicans joining Democrats in support. The bill would repeal a cap on a popular tax break that prevented taxpayers from deducting more than $10,000 in state and local taxes from their federal income taxes. It paired that repeal — which would in effect be a tax cut for upper earners in high-tax states — with an increase on the highest earners across the country by raising the top income tax rate to 39.6 percent from 37 percent. In a procedural twist, Democrats agreed to a Republican amendment that would limit the bill’s benefits for blue-state billionaires. It would maintain the so-called SALT cap on deductions for taxpayers earning more than $100 million per year, and direct the saved money to a $500 tax break for teachers and first responders.

Source: New York Times December 19, 2019 21:16 UTC