Bernie Sanders Splits With Nancy Pelosi, Chuck Schumer Over Tax Deduction in Dem States

Senator Bernie Sanders has split with Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer over their support for reinstating a tax deduction that some consider largely benefits rich people in Democratic states.

In an interview with Axios on HBO aired Sunday night, Sen. Sanders (I-VT) said bringing back the State and Local Tax (SALT) deduction would send a "terrible, terrible message," and urged Democrats to make it clear "which side" they were on.

He added that Democratic leadership could not be seen to be on the side of a tax break for high earners in high-tax states, such as New York and California, while claiming to fight for working Americans.

Asked for his position on the push to revive SALT, Sanders said: "It sends a terrible, terrible message. Ultimately, what you have got to do—and in fairness to Schumer and Pelosi, it is hard when you have tiny margins—but you have got to make it clear which side you are on.

"And you can't be on the side of the wealthy and the powerful if you're going to fight for working families."

The SALT measure was capped by former President Donald Trump when he signed off on the $1.5 trillion GOP tax plan in late 2017. Under the terms of the bill, state and local tax deductions were capped at $10,000 having once been unlimited for some taxpayers.

Democratic lawmakers fiercely opposed the move at the time, and it is still a point of contention for those with seats in high-tax states, including coastal and mostly Democratic states with expensive housing, like New York, New Jersey and California.

President Joe Biden has not included plans to remove the cap in his wide-ranging infrastructure bill, and did not include the measure in the latest COVID stimulus package.

In a statement in January, Sen. Schumer (D-NY) said the cap was costing New York's community "tens-of-thousands of dollars they could be using amid the crisis" as he and Sen. Kirsten Gillibrand (D-NY) introduced a bill to eliminate the cap.

"Double taxing hardworking homeowners is plainly unfair; We need to bring our federal dollars back home to the to cushion the blow this virus—and this harmful SALT cap—has dealt so many homeowners and families locally," he said at the time.

In a March interview with The New York Times, Speaker Pelosi (D-CA) also recommended repealing the SALT cap, arguing that it would put more money directly in people's hands as the economic recovery continues. A spokesman for the California Democrat added she would still be in favor of tailoring any rollback for "middle-class earners" and would still want a measure to "include limitations on the higher end."

Newsweek has contacted the offices of Speaker Pelosi and Sen. Schumer for further comment.

Vermont Senator Bernie Sanders
Sen. Bernie Sanders arrives before President Joe Biden addresses a joint session of Congress in the House chamber of the U.S. Capitol on April 28, 2021. The Vermont senator said bringing back the State and Local Tax (SALT) deduction would send a "terrible, terrible message." Melina Mara-Pool/Getty Images