Why a GOP Tax Plan Without SALT Will Be a Tough Sell
House Passes Budget Setting Up Heated Tax Debate
To help pay for the "giant, beautiful, massive” tax cut promised by President Donald Trump, Republican lawmakers in Washington aim to reduce or eliminate the deduction for state and local taxes that some people use when calculating what they owe in federal taxes. SALT, as it’s known, is an expensive and treasured middle- and upper-middle-class break that benefits the 30 percent of filers who itemize their returns rather than take a standard deduction. The issue may test the loyalties of Republicans representing high-tax states, like New York and New Jersey.
Under the bill passed by the House, federal taxpayers would no longer be able to take itemized deductions for the money they paid for state and local income taxes or for sales taxes. They could still deduct what they paid in state and local property taxes, but only to a maximum of $10,000 a year. The Senate bill would repeal the SALT deduction entirely.