Trump suggests reversing his cap on state and local tax deductions
Former President Donald Trump
By Tami Luhby, CNN
(CNN) — Former President Donald Trump indicated Tuesday that he would reverse a controversial provision of his 2017 tax cut package that limited Americans’ ability to deduct state and local taxes on their federal returns.
In a Truth Social post highlighting his Wednesday rally on Long Island, New York, where many residents have been affected by the cap, Trump wrote that he would “get SALT back, lower your Taxes, and so much more.”
Getting rid of the SALT cap is the latest in a string of tax breaks Trump has announced in his campaign. Last week, he called for ending taxes on overtime pay, and he previously said he would eliminate taxes on tips and on Social Security benefits if he wins the presidential election.
Trump and congressional Republicans included the so-called SALT cap, which limits a taxpayer’s state and local tax deduction to $10,000, in the Tax Cuts and Jobs Act as a way to pay for other tax cuts in the law. It largely affects higher-income people in high-tax blue states who itemize their deductions, but its unpopularity has led some GOP representatives in those states to call for its elimination as the party seeks to hold onto the House in this year’s election.
Democratic lawmakers have also promised to jettison the cap. Asked about Trump’s reversal, Senate Majority Leader Chuck Schumer, who represents New York, said Tuesday, “I’ve always been for eliminating the cap on SALT. I think it was a nasty piece of legislation supported by Donald Trump, aimed at the blue states, which helped the people of their states in many ways.”
The cap, like the TCJA’s other individual tax provisions, is set to lapse at the end of 2025. Until now, Trump has repeatedly said he would fully extend the expiring measures.
Raising or eliminating the cap, however, would be very expensive – which is one reason Republican leaders have resisted efforts to change it. Removing the limit would increase the cost of extending the 2017 tax cut law by $1.2 trillion over a decade, according to the Committee for a Responsible Federal Budget, which called such a move “costly, distortionary and regressive.” Some 92% of the relief would go to the top 10% of households, while less than 1% would go to the bottom 60%.
CNN’s Morgan Rimmer contributed to this report.
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