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SALT, Expensing and Other Tax Terms to Know: QuickTake Glossary

Bloomberg business news

Rep. Blackburn Says GOP Tax Bill May Keep SALT Deduction


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.