Another SALT Request, State Rebate Funding, and Tax Bills

More calls to cut the SALT. California Democrats in the US House have urged President Biden to remove the federal $10,000 cap on state and local tax deductions. Most New York Democrats threatened to oppose the infrastructure bill if it does not repeal the SALT cap but the  California Democrats made no threat.

Washington State finally funds tax rebate program for low-income working families. The state passed a tax rebate for low-income workers in 2008. The rebate was designed to compensate, a little, for the state’s regressive sales tax. But the state never funded  the program. Now, lawmakers have approved with bipartisan support an expanded version of a funded tax rebate, that Governor Jay Inslee will soon sign  into law. Starting in 2023, about 420,000 Washington State residents will receive tax rebates ranging between $300 and $1200, for a total of about $250 million annually.

Charity might begin at home, but so do tax bills.  A middle school teacher started a personal  fundraiser on Facebook to buy groceries for his elderly neighbors during the pandemic. Problem is, he raised so much money—over $40,000—that he now has a tax bill of about $16,000. Facebook issues a   Form 1099 that reports income to the IRS if donations exceed $20,000.  “I was not an official charity or nonprofit because I really had such small ambitions when I set this up.” The teacher is now seeking donations to… pay his tax bill.

Tax bills come to the less charitable among us, too. Politico reports that the Justice Department is suing Roger Stone for nearly $2 million in unpaid taxes, penalties and interest that have accumulated over ten years. Stone served as a political strategist for former President Donald Trump. Stone had been making regular payments to the IRS on a tax debt of about $1 million he ran up from 2007 to 2011. But the suit alleges that after Special Counsel Robert Mueller brought a Russia-related criminal case against Stone, the Trump adviser stopped paying and now owes about $400,000 in taxes and penalties from 2017 alone.

For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at

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