Skip to main content

Rep. Dean Phillips trying to repeal cap on state and local tax deductions that particularly hurt his district

The 3rd District representative has opposed the 2017 SALT changes.

Minnesota U.S. Rep. Dean Phillips has been working to repeal the cap on state and local tax deductions that has disproportionately hit residents in his district.

The Democrat, who was elected to Congress after defeating former GOP Rep. Erik Paulsen in the 2018 mid-terms, expressed his opposition to the changes implemented in the Trump Administration and Republican Congress' Tax Cuts and Jobs Act in 2017.

The bill introduced a $10,000 cap on the amount of state and local taxes (SALT) that can be deducted in annual tax returns, which has a disproportionate impact on higher-tax states like Minnesota, and in particular hit wealthier areas like Phillips' district, which covers the western Twin Cities suburbs.

Rep. Phillips, himself a millionaire, spoke before the House Ways and Means Committee about the "harmful impact" the SALT cap has had on the 3rd District earlier this year, and the committee passed the Restoring Tax Fairness for States and Localities Act by a vote of 24-17 on Wednesday.

The bill would eliminate the cap on SALT deductions in 2020 and 2021, with Phillips a co-sponsor of the bill.

Citing IRS stats, Phillips says his district ranks 35th out of 435 districts nationwide most impacted by the SALT cap, with the average SALT deduction in the district around $20,000.

He points out that unlike individuals, corporations are able to deduct the entirety of their SALT payments from their federal taxes.

Sign up: Subscribe to our BREAKING NEWS newsletters

"The 2017 Tax Cuts and Jobs Act was an irresponsible sugar rush that blew a hole in the deficit and came at a time when Congress should have been encouraging real, fair, and long-lasting prosperity," he said.

"The average tax filer in my district is being taxed twice on $10,000 of their annual income. That’s outrageous and it’s hurting economy, our schools, and our communities. I’m grateful to my colleagues on both sides of the aisle who listened when I shared Minnesota’s story and came together to propose this common-sense fix."

As well as the elimination of the SALT cap, the act proposed by Phillips would take action now, doubling the SALT deduction cap for married filers in 2019, and reinstating the top individual income tax rate (for those earning $427,000) to 39.6 percent from the current 37 percent.

The House is expected to take a vote on the bill shortly, but with the Senate in the hands of the Republican Party, the bill faces a challenge making its way into law.

You can read the bill here.

Next Up

Myth

New apartment proposal could spell the end for Myth Live

Myth Live in Maplewood has a spotty past with the surrounding community.

Hsa Law Yaw Say

Police trying to find woman, 18, who was shot at in St. Paul

Police are looking for help finding the woman.

image

Is an Amazon grocery store coming to Woodbury?

There's six rumored stores in the Twin Cities.

ambulance

Man sentenced to life in prison for 2021 murder of girlfriend

Lacy Jo Krube, 36, was found unresponsive at her St. Paul home, after she'd been beaten in Brooklyn Park.

Richfield High School

New threat prompts closure of Richfield secondary schools

The new threat comes after a shooting outside the Richfield High School football game Friday night.

Screen Shot 2022-09-25 at 6.09.38 PM

Parkland shooting survivor David Hogg to headline Duluth rally

The rally will take place at Leif Erikson Park on Oct. 1.

Screen Shot 2022-09-26 at 6.09.43 AM

Stella's Fish Cafe closes temporarily to investigate viral rodent video

The Uptown restaurant said it was closing temporarily so it could investigate the claims.

Governor Tim Walz

Walz, judge in dispute over Feeding Our Future case

A Ramsey County judge disputed Walz's claims that the Minnesota Department of Education was ordered by the court to resume payments to Feeding Our Future.

ambulance

2 dead, 1 with life-threatening injuries in Hwy. 7 crash

Both drivers were not wearing their seatbelt, according to the State Patrol.

Screen Shot 2022-09-25 at 11.50.33 AM

15-year-old Richfield football game shooting suspect arrested

A 16-year-old accused of instigating the altercation is also in custody.

Police tape

3 arrested after homicide, burglary in Inver Grove Heights

Charges of first-degree murder and first-degree burglary are pending.

Related

Screen Shot 2020-08-30 at 10.22.39 AM

Campaign office of Rep. Dean Phillips broken into overnight

Phillips also says people have been stealing campaign signs.

Reps. Angie Craig, Dean Phillips join calls for Trump impeachment inquiry

The president is under pressure for a phone call with Ukrainian officials.

Bigfoot stars in Dean Phillips' attack ad against Erik Paulsen

The ad was released on Tuesday morning, and is already getting national attention.

Screen Shot 2020-08-30 at 10.22.39 AM

Charges: Man admits to burglarizing Rep. Phillips' Minnetonka office

He's accused of stealing a TV and a computer in late August.

Capitol Hill, Washington D.C.

Republican Kendall Qualls to challenge Rep. Dean Phillips in 2020

Qualls, a businessman and Army veteran, filed to run against Phillips Tuesday.

Rep. Collin Peterson likely to vote against impeachment as it's 'too divisive'

The 7th District representative has apparently not been moved by the public hearings.

Republicans propose alternative to Gov. Walz's gas tax plan

They want to cut the tax, and make additional taxation optional.

Rep. Ilhan Omar under scrutiny over joint tax filings

Findings of a campaign finance investigation reveal another possible infraction.