Washington, D.C. — Today, House Ways and Means Chairman Kevin Brady (R-TX) released the following statement after the U.S. Department of Treasury issued proposed rules preventing states’ efforts to use charitable contributions as an end-run around the cap the Tax Cuts and Jobs Act placed on the state and local tax (SALT) deduction:
“These Treasury regulations rightly close the door on improper tax evasion schemes conjured up by state and local politicians who insist on brutally taxing local families and businesses.
“At the same time, Treasury is clearly seeking to preserve important state tax credit programs that were in place before tax reform that are genuinely designed to serve local charities, many of them educational.
“If these high-tax governors and state legislators are truly concerned about their constituents, they should take the revenue windfall from tax reform and a stronger economy and pass it on to their taxpayers rather than pocket it in their state capitols.
“As for states that have long-standing tax credit programs in place before the Tax Cuts and Jobs Act, we encourage you to review the proposed regulations and make full use of the comment period. This will be valuable as Treasury continues to work to preserve legitimate charitable programs while preventing tax evasion by some states.”