SALT Act

II 116TH CONGRESS 1ST SESSION S. 437 To amend the Internal Revenue Code of 1986 to repeal the dollar limitation on the deduction for State and local taxes and restore the 39.6 percent individual income tax rate bracket. IN THE SENATE OF THE UNITED STATES FEBRUARY 11, 2019 Mr. MENENDEZ (for himself, Mr. SCHUMER, Mr. WYDEN, Mr. DURBIN, Mrs. MURRAY, Mr. BOOKER, Mr. CARDIN, Ms. HARRIS, Mr. VAN HOLLEN, Mrs. FEINSTEIN, Mrs. GILLIBRAND, Ms. DUCKWORTH, Mr. BLUMENTHAL, and Mr. MURPHY) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to repeal the dollar limitation on the deduction for State and local taxes and restore the 39.6 percent individual income tax rate bracket. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Stop the Attack on 4 Local Taxpayers Act’’ or the ‘‘SALT Act’’. 5 VerDate Sep 11 2014 19:20 Feb 21, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S437.IS S437 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 437 IS SEC. 2. REPEAL OF DOLLAR LIMITATION ON DEDUCTION 1 FOR STATE AND LOCAL TAXES. 2 (a) IN GENERAL.—Section 164(b)(6) of the Internal 3 Revenue Code of 1986 is amended by striking all that fol- 4 lows ‘‘January 1, 2026’’ and inserting ‘‘, foreign real prop- 5 erty taxes (other than such taxes paid or accrued in car- 6 rying on a trade or business or an activity described in 7 section 212) shall not be taken into account under sub- 8 section (a)(1).’’. 9 (b) EFFECTIVE DATE.—The amendment made by 10 this section shall apply to taxable years beginning after 11 December 31, 2018. 12 SEC. 3. RESTORATION OF 39.6 PERCENT RATE BRACKET 13 FOR INDIVIDUALS. 14 (a) IN GENERAL.— 15 (1) MARRIED FILING JOINTLY AND SURVIVING 16 SPOUSES.—The table contained in section 1(j)(2)(A) 17 of the Internal Revenue Code of 1986 is amended by 18 striking ‘‘Over $400,000’’ and all that follows and 19 inserting the following: 20 ‘‘Over $400,000 but not over $470,700. $91,379, plus 35% of the excess over $400,000. Over $470,700 ............................... $116,124, plus 39.6% of the excess over $470,700.’’. (2) HEADS OF HOUSEHOLDS.—The table con- 21 tained in section 1(j)(2)(B) of such Code is amended 22 VerDate Sep 11 2014 19:20 Feb 21, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S437.IS S437 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 437 IS by striking ‘‘Over $200,000’’ and all that follows 1 and inserting the following: 2 ‘‘Over $200,000 but not over $418,400. $44,298, plus 35% of the excess over $200,000. Over $418,400 ............................... $120,738, plus 39.6% of the excess over $418,400.’’. (3) UNMARRIED INDIVIDUALS.—The table con- 3 tained in section 1(j)(2)(C) of such Code is amended 4 by striking ‘‘Over $200,000’’ and all that follows 5 and inserting the following: 6 ‘‘Over $200,000 but not over $418,400. $45,689.50, plus 35% of the excess over $200,000. Over $418,400 ............................... $122,129.50, plus 39.6% of the ex- cess over $418,400.’’. (4) MARRIED FILING SEPARATELY.—The table 7 contained in section 1(j)(2)(D) of such Code is 8 amended by striking ‘‘Over $200,000’’ and all that 9 follows and inserting the following: 10 ‘‘Over $200,000 but not over $235,350. $45,689.50, plus 35% of the excess over $200,000. Over $235,350 ............................... $58,062.50, plus 39.6% of the excess over $235,350.’’. (b) INFLATION ADJUSTMENTS TO 39.6 PERCENT 11 RATE.— 12 (1) IN GENERAL.—Section 1(j)(3)(A) of the In- 13 ternal Revenue Code of 1986 is amended by insert- 14 ing ‘‘(before January 1, 2020, in the case of so 15 much of such tables as relates to amounts to which 16 the 39.6 percent rate applies)’’ after ‘‘January 1, 17 2019’’. 18 VerDate Sep 11 2014 19:20 Feb 21, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S437.IS S437 pamtmann on DSKBFK8HB2PROD with BILLS 4 •S 437 IS (2) ADJUSTMENT RULES.—Section 1(j)(3)(B) 1 of such Code is amended— 2 (A) in the matter preceding clause (i), by 3 inserting ‘‘(December 31, 2019, in the case of 4 so much of such tables as relates to amounts to 5 which the 39.6 percent rate applies)’’ after 6 ‘‘December 31, 2018’’, 7 (B) in clause (i), by inserting ‘‘except as 8 provided in clause (iv),’’ before ‘‘subsection 9 (f)(3) shall’’, and 10 (C) by striking ‘‘and’’ at the end of clause 11 (ii), by striking the period at the end of clause 12 (iii) and inserting ‘‘, and’’, and by adding at the 13 end the following new clause: 14 ‘‘(iv) in the case of so much of such 15 tables as relates to amounts to which the 16 39.6 percent rate applies, subsection (f)(3) 17 shall be applied by substituting ‘calendar 18 year 2018’ for ‘calendar year 2016’ in sub- 19 paragraph (A)(ii) thereof.’’. 20 (c) EFFECTIVE DATE.—The amendments made by 21 this section shall apply to taxable years beginning after 22 December 31, 2018. 23 Æ VerDate Sep 11 2014 19:20 Feb 21, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S437.IS S437 pamtmann on DSKBFK8HB2PROD with BILLS