Trump Vows To Restore SALT Deduction, Promising Relief For High-Tax State Homeowners

Donald Trump has vowed to “get SALT back,” promising to restore the full deduction for state and local taxes if elected in November.

The announcement pivots from his previous stance and has reignited discussions about tax policy and its impact on homeowners in high-tax states.

The State and Local Tax (SALT) deduction, a long-standing feature of the U.S. tax code, was capped at $10,000 as part of the 2017 Tax Cuts and Jobs Act – a signature piece of legislation during Trump’s presidency. According to the Real Deal, the cap disproportionately affected residents of high-tax states like New York, California and New Jersey, many of whom had previously deducted far more than $10,000 in state and local taxes from their federal returns.

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Trump’s promise comes as he courts voters in the affected areas. He made the announcement ahead of a rally on Long Island, where the impact of the SALT cap has been particularly felt, according to the New York Daily News.

In 2017, the cap was seen as a way to offset other tax cuts in the broader reform package and was largely supported by Republican leadership in Congress. With Trump seeking to broaden his appeal, the issue has resurfaced as a potential point of bipartisan agreement.

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Senate Majority Leader Chuck Schumer, a longtime advocate for restoring the full SALT deduction, sees this as an opportunity to leverage bipartisan support for a change that would benefit his New York constituents.

The path to restoring the full SALT deduction is not without obstacles.

Critics argue that the move would primarily benefit high-income households in wealthy states, potentially worsening income inequality. Some policy experts have suggested raising the cap to $80,000 or limiting the deduction to households with incomes below $500,000.

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It’s worth noting that the current SALT cap, along with other provisions of the 2017 tax law, is set to expire at the end of 2025. The sunset clause means that, barring new legislation, the full deduction would automatically be restored.

Trump’s pledge, therefore, raises questions about whether he would seek to expedite the process or make the change permanent.

While Trump’s promise has injected new energy into the SALT debate, the deduction’s ultimate fate will depend on the outcome of the upcoming election and the composition of the next Congress. 

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