Trump wants to eliminate the $10,000 SALT deduction cap he created

Former President Donald Trump, an avowed proponent of taxation cuts, is floating the thought of reversing a measurement passed during his tenure successful the White House that efficaciously raised taxes for galore U.S. homeowners.

In a post Tuesday connected Truth Social, Trump suggested helium would scrap a $10,000 headdress connected deducting authorities and section taxes (SALT) that was passed arsenic portion of the 2017 Tax Cuts and Jobs Act — a monolithic revamp that helium has said boosted economical growth. 

Now, successful the run-up to the November election, Trump said successful the station helium would "get SALT back, little your taxes, and truthful overmuch more," though helium stopped abbreviated of offering details. Trump made the station up of a code he's giving Wednesday astatine the Nassau Coliseum connected Long Island.

Trump's caller connection for getting escaped of his $10,000 SALT deduction headdress comes arsenic the statesmanlike hopeful is pitching respective further taxation cuts that would, if enacted, trim taxes for large groups of voters. He's besides vowed to destruct taxes connected Social Security benefits, a pledge that could get enactment from the nation's elder citizens, arsenic good arsenic to extremity income taxes connected tipped workers and on overtime pay, ideas that would assistance lower- and middle-income Americans. 

Yet Trump's reversal connected the SALT deduction has sparked skepticism from lawmakers arsenic good arsenic economists and argumentation experts. 

"So ... present Trump is against the SALT taxation headdress which *checks notes* is simply a cardinal portion of the — lone — large portion of authorities passed during his administration?" noted Chris Koski, a governmental subject prof astatine Reed College successful Portland, Oregon, connected X.

Rep. Tom Suozzi, a Democrat from Nassau, Queens, said successful a statement on Wednesday that helium is "happy that the erstwhile president is saying that helium has yet reversed his devastating determination successful 2017 to headdress the State and Local Tax (SALT) deduction." He besides urged Trump to person Republican lawmakers to ballot to reconstruct the afloat deduction "if helium is genuinely serious."

The SALT deduction headdress "has been a assemblage stroke to my constituents for the past 7 years," Suozzi added.

Senator Chuck Schumer, a Democrat from New York, wrote connected X,"Donald Trump took distant your SALT dedications and wounded truthful galore Long Island families. Now, he's coming to Long Island to unreal helium supports SALT. It won't work."

Asked for details astir Trump's connection to reconstruct the SALT writeoff, a spokeswoman for the Trump run told CBS MoneyWatch: "While his pro-growth, pro-energy policies volition marque beingness affordable again, President Trump is besides going to rapidly determination taxation alleviation for moving radical and seniors."

Here's what to cognize astir the SALT deduction. 

What is the SALT deduction?

The authorities and section taxation deduction allows taxpayers who itemize to deduct spot taxes, income taxes and authorities oregon section income taxes from their national income taxes. Prior to the Tax Cuts and Jobs Act, determination was nary bounds connected however overmuch radical could deduct done the SALT deduction. 

But the 2017 taxation overhaul passed nether Trump constricted the deduction to $10,000 – a stroke to galore homeowners successful states with precocious spot taxes, galore of which are Democratic leaning. At the clip of the law's passage, the Treasury Department estimated that astir 11 cardinal taxpayers successful high-tax states similar New York and New Jersey would forfeit $323 cardinal successful deductions.

Who benefits from the SALT deduction?

Homeowners with precocious spot taxes, specified arsenic radical successful New York, New Jersey and California, were the biggest beneficiaries of the the afloat SALT deduction. 

But immoderate experts besides noted that the SALT deduction chiefly enactment much wealth successful the pockets of higher-earning Americans. About 80% of the afloat SALT deduction had helped radical earning much than $100,000 a year, according to the Tax Foundation. 

What happened aft Trump capped the SALT deduction astatine $10,000?

The bounds has progressively impacted middle-class homeowners crossed the U.S. due to the fact that of rising spot taxes and incomes. Some lawmakers person besides sought to either repeal oregon summation the SALT cap, but nary of those efforts person borne fruit. 

Earlier this year, immoderate lawmakers sought to treble the SALT deduction headdress to $20,000 for joined couples, with the alteration retroactive for the 2023 taxation year. But that measure was blocked successful the House successful February.

Won't the SALT deduction headdress expire anyway?

Yes, the SALT deduction headdress is simply a proviso that's owed to expire successful 2025, arsenic are galore different parts of the Tax Cuts and Jobs Act, specified arsenic a simplification of the idiosyncratic taxation brackets. But Trump has antecedently indicated helium wants to widen the provisions successful his signature taxation law.

How overmuch would it outgo the U.S. to repeal the SALT deduction cap?

It won't beryllium cheap, according to the the Committee for a Responsible Federal Budget, a deliberation vessel that focuses connected fund and argumentation issues. 

Eliminating the $10,000 deduction bounds "would summation the outgo of extending the 2017 Tax Cuts and Jobs Act (TCJA) by $1.2 trillion implicit a decade," the radical estimates, adding that specified a measurement would beryllium a "costly mistake."

Extending the TCJA's taxation cuts would summation the nation's shortage by $3.9 trillion implicit the adjacent decade, the radical estimates. By adding successful a expiration oregon repeal of the SALT deduction cap, that would turn to $5.1 trillion, it added.

"Lawmakers should not widen the TCJA without a program to – astatine a minimum – offset the costs of extension, but ideally the program would rise revenues comparative to existent instrumentality and assistance enactment the nation's indebtedness connected a amended trajectory," the radical said successful a statement.

In:
• Donald Trump
• Taxes
• Property Taxes