The Senate on Wednesday rejected a Democratic attempt to give relief to people hit hardest by new limits on how much of their state and local tax bill they can deduct from federal taxes.
The regulations were a key part of the GOP's 2017 tax code overhaul, limiting the deduction permitted for state and local taxes to $10,000.
Republicans enthusiastically defeated the Democratic move on a 52-43, mostly party-line vote.
The state and local tax, or SALT, provision was a major revenue-raising piece of the 2017 law, permitting that measure's GOP architects to lower taxes elsewhere in the code. But it caused an uproar and cemented strong Democratic opposition to the measure since capping the SALT deduction was seen in part as an assault on so-called blue states with high concentrations of upper-bracket taxpayers.
Republicans from New Jersey were among those who paid a steep political price, losing ground in wealthier suburbs.
"It's hurt so many people in New York who are middle class, not wealthy, and in suburbs throughout the country," said top Senate Democrat Chuck Schumer of New York. "And, by the way, it's probably one of the major reasons the House flipped from Republican to Democrat. So many of those districts in New Jersey and California, New York, and Pennsylvania were affected by this cap and people rebelled."
Some high-tax states like New York and California had tried to create workarounds for taxpayers, including creating charitable funds that taxpayers could contribute to in exchange for a state tax credit. The idea was that people could still deduct their charitable contributions from their income for federal tax purposes.
In June, the IRS enacted a rule prohibiting those workarounds. The Democratic plan would have overturned that rule.
Republicans said that the benefits of the Democrats' failed measure would have overwhelmingly benefited higher-income taxpayers.
"Repealing the SALT cap would give millionaires an average tax cut of $60,000. Meanwhile, the average tax cut for taxpayers earning between $50,000 and $100,000 would be less than $10," said Majority Leader Mitch McConnell, R-Ky. "The middle-class Kentuckians I represent have zero interest in cross-subsidizing the tax bills of millionaires who live in Brooklyn and the Bay Area."
One Democrat opposed the move to lift the SALT cap.
"The vast majority of the benefits of repealing the SALT cap would go to high-income Americans," said Sen. Michael Bennet, D-Colo., one of the Senate's few remaining Democratic deficit hawks. "Repeal would be extremely costly, and for that same cost, we could advance much more worthy efforts to help working and middle-class families all over the country."
JERUSALEM (AP) — Yemen's Houthi rebels on Saturday claimed shooting down another of the U.S. military's MQ-9 Reaper drones, airing footage of parts that corresponded to known pieces of the unmanned aircraft.
The Houthis said they shot down the Reaper with a surface-to-air missile, part of a renewed series of assaults this week by the rebels after a relative lull in their pressure campaign over the Israel-Hamas war in the Gaza Strip.
U.S. Air Force Lt. Col. Bryon J. McGarry, a Defense Department spokesperson, acknowledged to The Associated Press on Saturday that “a U.S. Air Force MQ-9 drone crashed in Yemen.” He said an investigation was underway, without elaborating.
The Houthis described the downing as happening Thursday over their stronghold in the country's Saada province.
Footage released by the Houthis included what they described as the missile launch targeting the drone, with a man off-camera reciting the Houthi's slogan after it was hit: “God is the greatest; death to America; death to Israel; curse the Jews; victory to Islam.”
The footage included several close-ups on parts of the drone that included the logo of General Atomics, which manufactures the drone, and serial numbers corresponding with known parts made by the company.
Since the Houthis seized the country’s north and its capital of Sanaa in 2014, the U.S. military has lost at least five drones to the rebels counting Thursday's shootdown — in 2017, 2019, 2023 and this year.
Reapers, which cost around $30 million apiece, can fly at altitudes up to 50,000 feet and have an endurance of up to 24 hours before needing to land.
The drone shootdown comes as the Houthis launch attacks on shipping in the Red Sea and Gulf of Aden, demanding Israel ends the war in Gaza, which has killed more than 34,000 Palestinians there. The war began after Hamas-led militants attacked Israel on Oct. 7, killing 1,200 people and taking some 250 others hostage.
The Houthis have launched more than 50 attacks on shipping, seized one vessel and sank another since November, according to the U.S. Maritime Administration.
Houthi attacks have dropped in recent weeks as the rebels have been targeted by a U.S.-led airstrike campaign in Yemen. Shipping through the Red Sea and Gulf of Aden has declined because of the threat. American officials have speculated that the rebels may be running out of weapons as a result of the U.S.-led campaign against them and after firing drones and missiles steadily in the last months. However, the rebels have renewed their attacks in the last week.
A Houthi supporter raises a mock rocket during a rally against the U.S. and Israel and to support Palestinians in the Gaza Strip, in Sanaa, Yemen, Friday, April. 26, 2024. (AP Photo/Osamah Abdulrahman)
