By the Office of Rep. Raul Ruiz, M.D.
Rep. Raul Ruiz, M.D., CA-36, voted Dec. 19 to reinstate the full deduction on state and local taxes taken away by the Tax Cuts and Jobs Act (P.L. 115–97). H.R. 5377, the Restoring Tax Fairness for States and Localities Act of 2019, would blunt the harm from one of the most damaging provisions of the 2017 tax bill to the state of California: the $10,000 cap on the State and Local Tax (SALT) Deduction. The bill also increases the tax deduction for teachers and first responders for out-of-pocket expenses on school supplies and professional training.
“The Trump tax bill enriched millionaires, billionaires and large corporations at the expense of homeowners in our district,” said Ruiz. “I fought to reinstate the full state and local tax deduction to give middle-class homeowners relief. This bill also gives a much-deserved tax break for teachers and first responders who sacrifice so much for the community. I am glad we fought for and won this victory for homeowners, teachers, first responders and families in our district. I urge the Senate to vote on this bill.”
In 2017, 6.4 million Californians (35% of taxpayers) utilized the SALT deduction for an average amount of $20,451. In the 36th congressional district, 33% of taxpayers took the SALT deduction for an average of $10,884 in 2016.
H.R. 5377, as reported by the Committee on Ways and Means, addresses the $10,000 cap on the itemized deduction for state and local taxes (SALT) placed into law from 2018-2025 by the Republican tax bill, the Tax Cuts and Jobs Act (TCJA). H.R. 5377 contains the following provisions:
1. Elimination of the marriage penalty in 2019: The SALT cap is set at $10,000 for everyone, whether the household is composed of a single individual or two married taxpayers filing jointly. H.R. 5377 would eliminate the marriage penalty in 2019, allowing married couples filing jointly to deduct $20,000 and married couples filing separately to each claim $10,000.
2. Elimination of the $10,000 Cap in 2020 and 2021: For the years 2020 and 2021, the H.R. 5377 suspends the $10,000 SALT deduction cap altogether, making SALT fully deductible in those years.
3. Reinstate the top rate of 39.6%: H.R. 5377 would restore the top individual income tax rate from the current 37% to the pre-TCJA level of 39.6%, while also restoring the top income bracket at the pre-TCJA levels. In 2020, the top rate would begin at $479,000 for married couples, $452,400 for heads of household, and $425,800 for single filers.
4. Above-The-Line Deduction for Teachers and First Responders: H.R. 5377 doubles the above-the-line deduction for educators’ out-of-pocket classroom and professional development expenses: current law allows a $250 deduction and the proposal lifts it to $500 (and indexes it for inflation). Additionally, the bill adds a new above-the-line deduction for professional first responders, including law enforcement officers, firefighters, paramedics and emergency medical technicians of up to $500 for unreimbursed expenses related to tuition and fees for professional development courses or expenses for uniforms.