House Speaker Nancy Pelosi, D-Calif., is pushing for a new stimulus bill that would roll back the state and local tax deduction (SALT) cap, a proposal that would predominantly help wealthy individuals — including most residents in Pelosi's district and perhaps even Pelosi herself.
A 2019 report from the Joint Committee on Taxation projected that of those who would face lower tax liability from the elimination of the SALT cap – which only affects those who itemize tax deductions – 94 percent earn at least $100,000. The government would lose out on $77.4 billion in tax dollars, with more than half of that amount being saved by taxpayers earning $1 million or more. Those earning more than $200,000 would reap most of the balance.
California's 12th congressional district, which Pelosi represents, is among the wealthiest in the U.S., with a median income of $113,919, according to census data. The average household income is $168,456 -- meaning most residents would benefit from any significant cut to SALT.
Pelosi and her husband have a property tax liability of approximately $198,337.62 considering their two homes, a winery and two commercial properties, public records show, indicating that the couple could reap substantial benefits in the event of a full SALT repeal.
Pelosi's 2020 property taxes in Washington, D.C. totaled $13,997.20 on her Georgetown condo and garage, valued at $1,646,730. Her San Francisco property taxes totaled $51,480.02 -- plus $47,631.98 from her Napa winery, $64,874.66 from a San Francisco commercial property, and $20,353.76 for another building. Property taxes for businesses and other commercial ventures generally have not been affected by SALT provisions.
Just days after taking heat for successfully demanding $25 million in stimulus funds for the John F. Kennedy Center for the Performing Arts in Washington, D.C., Pelosi specifically declared this week that it might be wise to “retroactively undo SALT,” which was enacted as part of the 2017 tax cuts and prevents households from deducting more than $10,000 per year of their state and local tax expenditures from federal tax bills.
A Pelosi spokesperson said that a SALT drawdown would be “tailored to focus on middle-class earners and include limitations on the higher end.”
However, it was unclear exactly what the limitations would be in the proposed SALT shakeup. House Democrats voted last year to mostly repeal the SALT cap, and haven't hidden their desires to try again should control of the Senate change in November.
Replies