[Congressional Record Volume 167, Number 50 (Wednesday, March 17, 2021)]
[Senate]
[Pages S1616-S1617]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS:
  S. 804. A bill to amend the Internal Revenue Code of 1986 to increase 
the limitation on the amount individuals filing jointly can deduct for 
certain State and local taxes; to the Committee on Finance.
  Ms. COLLINS. Mr. President, this is the time of year when people are 
calculating their taxes and filing their returns. There are inequities 
in our Tax Code, and the bill I am introducing today, the SALT 
Deduction Fairness Act, would help remedy one of these inequities. This 
bill would ensure that limits on State and local tax deductions, also 
known as SALT deductions, do not disproportionately and unfairly 
penalize married couples.
  Currently, the amount in State and local taxes that both single and 
married filers may deduct from their annual income taxes is capped at 
$10,000. Single filers and married filers are treated the same, and 
married people who file their taxes separately are limited to $5,000 
each. In other words, people would be better off not getting married 
when it comes to the SALT deduction. My bill removes this penalty by 
simply doubling the deduction to $20,000 for married filers.
  This is the situation we have now: Two single people can both claim 
$10,000 worth of State and local income taxes as a deduction on their 
Federal returns, but if they get married, they can claim only $10,000 
together. This is a classic example of a marriage tax penalty.
  When the Senate considered the Tax Cuts and Jobs Act in 2017, I 
worked to keep the SALT deduction in the Federal Tax Code because of 
the increased tax burden its elimination would have imposed on many 
Mainers who pay property taxes on their seasonal cottages as well as 
their homes, who remit annual excise taxes on their vehicles, and who 
are subject to State income taxes.
  The SALT deduction has been in the Tax Code since 1913, when the 
Federal income tax was first established. It is intended to protect 
families from double taxation, from essentially paying a tax on a tax.
  The Senate adopted my amendment, which paralleled that of the House, 
to retain the deduction for State and local taxes up to $10,000. This 
deduction is especially important to families living in high-tax 
States, like Maine, which has one of our Nation's highest State taxes 
and where many residents own second homes, like camps on Maine's 
beautiful lakes. Last year, an analysis by WalletHub found that Maine 
had the fourth highest overall tax burden behind only New York, Hawaii, 
and Vermont. Yet Maine's median household income ranked only 35th in 
the Nation and was approximately $6,800 below the U.S. median household 
income. So maintaining this deduction provides important tax relief for 
those Mainers who continue to itemize their deductions. Yet we can do 
better. We can make the SALT deduction fairer by eliminating the 
marriage penalty that limits a married couple to just $10,000; whereas, 
if they were not married, they could each claim $10,000.
  According to the U.S. Census, there are more than 60 million married 
couples living in our Nation. Our Tax Code should be fair to them. We 
should not create a situation in which married couples would have been 
better off financially, in terms of taxes, had they not married. One 
way to accomplish this goal is to double their access to deductions for 
the State and local taxes they pay, including from properties they 
share, such as their homes. This legislation would remedy this double 
taxation problem and eliminate the marriage tax penalty when it comes 
to the SALT tax deduction.
  It boils down to this: We simply should not be unfairly penalizing 
American taxpayers for being married.
  I urge my colleagues to support this commonsense bill to fix this 
marriage tax penalty

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