Trump proposes reconsidering his limitation on deductions for state and local taxes.
In a post on Truth Social, referencing his Wednesday rally in Long Island, New York, where multiple residents have suffered due to the cap, Trump stated he'd "eliminate the SALT cap, lower your taxes, and offer even more advantages."
Eliminating the SALT cap is just one of numerous tax reductions Trump has proposed during his campaign. Last week, he advocated for the abolition of taxes on overtime payments, and earlier he mentioned eliminating taxes on tips and Social Security benefits if he secures the presidency.
Trump and Republican legislators incorporated the controversial SALT cap, which restricts a taxpayer's deduction for state and local taxes to $10,000, into the Tax Cuts and Jobs Act as a means to offset other tax reductions. Primarily affecting high-income individuals in high-tax, Democratic-majority states who itemize their deductions, the SALT cap's unpopularity has prompted several GOP representatives in those states to advocate for its elimination as the party seeks to retain control of the House this election year.
Democratic representatives have also pledged to scrap the cap. Regarding Trump's policy reversal, Senate Majority Leader Chuck Schumer, representing New York, stated on Tuesday, "I've long supported scrapping the SALT cap cap. I deem it a vile piece of legislation supported by Donald Trump, primarily targeting blue states and benefiting their residents in numerous ways."
The cap, like other individual tax provisions in the Tax Cuts and Jobs Act, is set to expire at the end of 2025. Until now, Trump has consistently declared he'd fully extend the expiring measures.
Romoving or lifting the cap would be financially burdensome – one of the reasons Republican leaders have stalled efforts to modify it. Eliminating the limit would amplify 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 labeled such a move "pricey, distorting, and regressive." Over 92% of the relief would be to the top 10% of households; less than 1% would benefit the bottom 60%.
CNN’s Morgan Rimmer contributed to this report.
Trump's proposals for tax reform in politics include the abolition of taxes on overtime payments, just like his previously mentioned goals of eliminating taxes on tips and Social Security benefits if he becomes president. The ongoing debate in politics revolves around the potential removal of the SALT cap, which has sparked disagreements between Republican and Democratic representatives.
