Congress moves to restore unlimited tax deductions for the wealthy

What it does

This bill repeals the $10,000 annual cap on federal tax deductions for state and local taxes (SALT), allowing taxpayers to deduct unlimited amounts of state income, property, and other local taxes from their federal taxable income. The change applies retroactively to 2025 and later tax years, primarily benefiting high-income earners and residents of high-tax states.

Why we flagged it

The bill's sole operative mechanism is the repeal of a cap on tax deductions. It is a straightforward tax reduction, not a regulatory change or appropriation. The benefit flows almost entirely to high-income taxpayers and residents of high-tax states, making it a narrow tax cut rather than a broad public measure.

What the text implies

• Repealing the SALT cap increases the federal budget deficit by an estimated $100+ billion over ten years (CBO estimates), requiring offsetting revenue or spending cuts elsewhere.
• The benefit is highly regressive: approximately 90% of the tax savings accrue to households earning over $200,000 annually, while 60% of households receive no benefit at all.
• High-tax states (CA, NY, NJ, IL) see disproportionate benefit, creating an implicit federal subsidy of state tax systems in those jurisdictions.
• The retroactive effective date (2025) may allow amended returns for 2024 if the bill passes before the 2024 tax-filing deadline, creating administrative complexity and potential revenue loss.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill reduces federal tax revenue by allowing unlimited deductions for state and local taxes, a benefit concentrated among high-income earners and residents of high-tax states. Lower-income and middle-income taxpayers in low-tax states receive little or no benefit, while the foregone federal revenue must be made up through other means (higher deficits, spending cuts, or tax increases elsewhere), creating a net cost to the broader public.

Who stands to gain

• high-income individual taxpayers
• residents of high-tax states
• tax preparation and accounting firms (increased complexity)

Named in the bill

Internal Revenue Code of 1986, IRC Section 164(b)(6), House Committee on Ways and Means, high-income earners, high-tax states (CA, NY, NJ, IL, MA)

Where it stands

25 cosponsors: 21 Democrats, 4 Republicans.

• Jan 15, 2025 — Introduced · Congress.gov: “Introduced in House”
• Jan 15, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

1 lobbying clients named this bill on 1 disclosure filings across 1 quarter, Dec 2025 to Dec 2025. Those filings disclosed $184,304 in lobbying spend. A filing names 71 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 0% of bills with at least one filing.

Andrew Garbarino, the sponsor, reported $1,954,500 in PAC receipts in the 2026 cycle.

• International Association of Fire Fighters — $184,304 on 1 filing

Lobbying Disclosure Act filings through Jan 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.