Some taxpayers in Rep. Harley Rouda’s district could save that much if the Democrat’s tax bill becomes law.
In 2016, people in Rep. Harley Rouda’s district deducted, on average, over $27,000 in state and local taxes from their federal tax returns. That all changed the following year with President Donald Trump’s tax bill, which capped how much taxpayers could deduct at $10,000.
Now, people in California’s 48th district could save around $4,000 if Democrats’ bill to reverse that cap goes into effect.
Trump’s 2017 tax law essentially raised taxes for many in Orange County, part of which is represented by Rouda. Before then, Californians could itemize state and local tax, or “SALT,” deductions with no cap. But Trump’s signature legislation capped those deductions, meaning millions of Americans are being double taxed.
Rouda, a freshman lawmaker, made repeal of the SALT cap one of his legislative priorities since being elected to Congress in 2018. In February he cosponsored the bipartisan Stop the Attack on Local Taxpayers (SALT) Act. That legislation passed the House in December, with Rouda and nearly all Democrats in support.
“The people of Orange County should not be taxed twice on the same dollar,” he said in a statement announcing his support for the SALT Act. “Last year’s tax bill gave enormous tax giveaways to the largest corporations and very wealthiest households, and paid for it with unfair tax burdens on California’s working families,” Rouda said.
Just how big that burden is for people in Rouda’s district can be difficult to discern. So Courier built a model to project what the average taxpayer in California’s 48th district could save if the SALT deduction was reversed. To do that, we first used Census data on mean income in the district to determine an average tax rate of 20% to 25% for this deduction. Then using data from the Tax Policy Center on the average SALT deduction in 2016, we calculated that, on average, SALT deduction taxpayers could save between $3,405 and $4,256.
That’s enough money to book a room at The Resort at Pelican Hill for a whole week, buy 7 new shortboards, or in more practical terms, enough to cover about half a year’s tuition and fees for a year of graduate school at CSU Fullerton.
Clarification: This post has been updated to include that there was no cap on SALT deductions prior to the new law.