The legislation could stop double taxation in the state.
Every tax law change has winners and losers. And the 2017 Republican tax law, President Donald Trump’s signature legislation, disproportionately hurts many Illinoisans in the 14th Congressional District. That’s because it caps the state and local tax deduction, often known as “SALT,” at $10,000. The result for people who claimed and continue to claim the SALT deduction under the new rules is double taxation.
To that end, Rep. Lauren Underwood introduced H.R. 1757 to relieve Illinois families that took a financial hit from the Tax Cuts and Jobs Act of 2017. The legislation would help certain taxpayers by increasing the current SALT deduction cap, eliminating the marriage penalty, and adjusting the cap for inflation.
Other Democrats in Congress were on board with what Underwood proposed, and in December passed very similar legislation that now awaits action in the Senate. According to Underwood’s office, nearly 2 million families claim the SALT deduction.
But just how much does the SALT change hurt taxpayers in Illinois’ 14th? The individual effects can be difficult to discern, so Courier built a model to find out. First, we looked at 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, taxpayers from Underwood’s district who claim a larger SALT deduction could save between $522.07 and $652.59 per year on their tax bill.
That’s enough money to grab about five club infield seats to see the Cubs play the White Sox at Guaranteed Rate Field in July. Or to get electrical repair work, like adding new outdoor lights, done in Batavia, Illinois.
In a statement after the bill passed, Rep. Underwood said the bill would “help middle class Illinois families who were unfairly harmed by the Republican tax law.”