Few topics in Washington lend themselves to jargon as readily as taxes. President Donald Trump’s drive for tax cuts, now gaining steam in the Republican-controlled Congress, might send some readers diving for their dictionaries. Here are some of the terms worth understanding.
To help pay for promised cuts -- including lower rates for corporations and some individuals -- lawmakers are trying to raise revenue elsewhere. A big but well-defended target is the deductibility of state and local taxes (SALT), an expensive and treasured middle- and upper-middle-class tax break that benefits the 30 percent of filers who itemize their tax returns. Eliminating the break in full would raise an estimated $1.3 trillion over 10 years -- an amount Republicans need to offset the deep cuts they’ve proposed. In a high-tax state like New York, a person who makes $1 million may end up paying $120,000 in state and local taxes, which, if deducted, could save $48,000 in federal taxes, estimates Robert Willens of New York-based Robert Willens LLC.
