[Economy\Middle-Class Taxes]
Rep. Underwood: “Before the Republican tax law took effect, taxpayers in our community were able to deduct all of their state and local taxes before calculating their federal tax bill—the average amount is over $14,000 and well over $20,000 for some in our community. Now they’re limited to just $10,000—a loss of thousands for middle class families.”
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Yesterday, legislation co-sponsored and championed by Illinois Representative Lauren Underwood to reduce taxes for middle class families passed the House of Representatives.
The Restoring Tax Fairness for States and Localities Act (H.R. 5377) would end the burden on middle class families caused by the 2017 Republican tax law’s $10,000 cap on the state and local tax (SALT) deduction. This deduction was previously unlimited. The legislation would help middle class families by immediately eliminating the marriage penalty, which currently does not allow two married people a higher SALT deduction than single taxpayers, and eliminating the SALT deduction cap altogether in 2020 and 2021.
Additionally, the bill doubles the educator expense deduction to $500, helping over 13,000 teachers in the 14th District afford classroom supplies, and creates a new $500 expense deduction for first responders, helping to defray the cost of uniforms and training programs. Underwood has been fighting for changes to the SALT deduction since she was sworn into Congress, and introduced her own legislation, H.R. 1757, in March.
“Before the Republican tax law took effect, taxpayers in our community were able to deduct all of their state and local taxes before calculating their federal tax bill—the average amount is over $14,000 and well over $20,000 for some in our community. Now they’re limited to just $10,000—a loss of thousands for middle class families. This bill would help middle class Illinois families who were unfairly harmed by the Republican tax law by allowing them to once again deduct all of their state and local taxes,” said Rep. Underwood.
In Congress, Underwood has continuously fought to provide tax relief for Illinois families unfairly harmed by the Tax Cuts and Jobs Act of 2017. In January, Underwood urged the Internal Revenue Service to address the disproportionate tax burden being placed upon Illinois families due to changes in the SALT deduction as passed in the Tax Cuts and Jobs Act. In a letter, Underwood expressed concern that current efforts by the IRS are insufficient. In March, Underwood introduced H.R. 1757 with Representative Sean Casten (IL-6) to address the Republican tax law’s changes to the SALT deduction.
In June, Underwood testified before the Ways and Means Committee to advocate for middle class families and urged the committee to consider her legislation. In July, Underwood supported the bipartisan H.J. Res. 72 to overturn harmful U.S. Treasury Department regulations aimed at restricting Americans from deducting charitable contributions from their federal taxes. Underwood is a member of the House of Representatives SALT working group.
