Trump flip flops on SALT Tax Deduction

[Anonymous]

More bad news for DMV area homeowners. The DMV area has the highest share of taxpayers claiming SALT.

On the bill: Mr. Trump downplayed the legislation’s changes to Medicaid and the Affordable Care Act, which could cost at least 8.6 million Americans their health coverage, saying the changes weren’t “anything me

aningful.” He also flipped his position on raising the SALT deduction, which he supported during the campaign.

https://bipartisanpolicy.org/explainer/which-states-benefit-most-from-the-salt-deduction/

Which states have the highest share of taxpayers claiming SALT?

One way to measure the SALT cap’s impact is to look at which states have the highest share of taxpayers claiming the deduction. The higher the share of taxpayers claiming the SALT deduction, the greater the chance that the $10,000 cap impacts both a larger share of households and that such households are higher-income and incentivized to itemize deductions in lieu of claiming the standard deduction. (For context, according to the IRS, only 7% of taxpayers making under $200,000 itemized deductions in 2022, compared to 38% of taxpayers making over $200,000.)

In 2022, the most recent year for which tax data is available, the top five states were:

Washington, D.C.: 20.3% of taxpayers
Maryland: 19.8%
California: 15.3%
Utah: 13.7%
Virginia: 13.5%

[Anonymous]

Correct link in this post....
https://www.nytimes.com/live/2025/05/20/us/trump-news

Mr. Trump downplayed the legislation’s changes to Medicaid and the Affordable Care Act, which could cost at least 8.6 million Americans their health coverage, saying the changes weren’t “anything meaningful.” He also flipped his position on raising the SALT deduction, which he supported during the campaign.

[Anonymous]

I personally would be better off with a higher SALT limit, all else equal, but it's clearly the right policy to limit or eliminate the deduction.

[Anonymous]

Anonymous wrote:I personally would be better off with a higher SALT limit, all else equal, but it's clearly the right policy to limit or eliminate the deduction.

+1

[Anonymous]

Anonymous wrote:I personally would be better off with a higher SALT limit, all else equal, but it's clearly the right policy to limit or eliminate the deduction.

SALT deductions have been around since the 1860s. Why? Because it was considered Big Government overreach for the federal government to double-tax the states.

The United States’ first income tax was enacted in 1861, and tweaked in 1862. Both versions contained only one deduction; and, you guessed it, it was the SALT deduction! A recently minted political party called the Republican party controlled Congress and a Republican-party President occupied the White House for the first time (a 6’ 4” fellow named Abraham Lincoln). Records of why the SALT deduction was included in the first income tax are scarce, but there are documented statements by Congressional Republicans that may support two justifications. The first was federalism and keeping the Federal tax out of the orbit of State levies. The second was double taxation: preventing the Federal government from taxing a dollar that the States had already taxed. There is no record of political discord over the SALT deduction.

https://www.chamberlainlaw.com/tax-blawg/history-of-the-salt-deduction

Capping SALT deductions in 2017 was the radical policy.

[Anonymous]

I hate this double taxation. The way the feds are becoming a joke of a govt we might as well just rely on the states and pay no federal tax at all or some fixed minimum to the defense and that's it. We get nothing else from them anyways.

[Anonymous]

Anonymous wrote:I personally would be better off with a higher SALT limit, all else equal, but it's clearly the right policy to limit or eliminate the deduction.

Meh. If they were actually helping people then fine. But why should middle class taxpayers suffer while Trump spends millions of taxpayer dollars paying out January 6 terrorists and billions in lost revenue with tax cuts for billionaires. All the while cutting medicaid and grants for Food banks.

[Anonymous]

You get a huge bloated military, and Medicare.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I personally would be better off with a higher SALT limit, all else equal, but it's clearly the right policy to limit or eliminate the deduction.

SALT deductions have been around since the 1860s. Why? Because it was considered Big Government overreach for the federal government to double-tax the states.

The United States’ first income tax was enacted in 1861, and tweaked in 1862. Both versions contained only one deduction; and, you guessed it, it was the SALT deduction! A recently minted political party called the Republican party controlled Congress and a Republican-party President occupied the White House for the first time (a 6’ 4” fellow named Abraham Lincoln). Records of why the SALT deduction was included in the first income tax are scarce, but there are documented statements by Congressional Republicans that may support two justifications. The first was federalism and keeping the Federal tax out of the orbit of State levies. The second was double taxation: preventing the Federal government from taxing a dollar that the States had already taxed. There is no record of political discord over the SALT deduction.

https://www.chamberlainlaw.com/tax-blawg/history-of-the-salt-deduction

Capping SALT deductions in 2017 was the radical policy.

I don't see anything here making a serious policy case for a SALT deduction (and no, "we've done it this way for a century" is not a serious case). The core issue is that SALT amounts to a federal subsidy of state taxes and mortgage interest in proportion to the taxpayer's income, with high income folks receiving a greater subsidy as a percentage and folks in high tax states receiving a higher level of subsidy. This makes no sense! Just eliminate the deduction and lower the rates by a couple percentage points until revenue is equalized.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I personally would be better off with a higher SALT limit, all else equal, but it's clearly the right policy to limit or eliminate the deduction.

SALT deductions have been around since the 1860s. Why? Because it was considered Big Government overreach for the federal government to double-tax the states.

The United States’ first income tax was enacted in 1861, and tweaked in 1862. Both versions contained only one deduction; and, you guessed it, it was the SALT deduction! A recently minted political party called the Republican party controlled Congress and a Republican-party President occupied the White House for the first time (a 6’ 4” fellow named Abraham Lincoln). Records of why the SALT deduction was included in the first income tax are scarce, but there are documented statements by Congressional Republicans that may support two justifications. The first was federalism and keeping the Federal tax out of the orbit of State levies. The second was double taxation: preventing the Federal government from taxing a dollar that the States had already taxed. There is no record of political discord over the SALT deduction.

https://www.chamberlainlaw.com/tax-blawg/history-of-the-salt-deduction

Capping SALT deductions in 2017 was the radical policy.

I don't see anything here making a serious policy case for a SALT deduction (and no, "we've done it this way for a century" is not a serious case). The core issue is that SALT amounts to a federal subsidy of state taxes and mortgage interest in proportion to the taxpayer's income, with high income folks receiving a greater subsidy as a percentage and folks in high tax states receiving a higher level of subsidy. This makes no sense! Just eliminate the deduction and lower the rates by a couple percentage points until revenue is equalized.

The states with low/no state income tax are subsidized by wealthier states - ie the ones that tend to have higher state and local taxes. Seems a fair way to offset that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I personally would be better off with a higher SALT limit, all else equal, but it's clearly the right policy to limit or eliminate the deduction.

Meh. If they were actually helping people then fine. But why should middle class taxpayers suffer while Trump spends millions of taxpayer dollars paying out January 6 terrorists and billions in lost revenue with tax cuts for billionaires. All the while cutting medicaid and grants for Food banks.

The top 1% benefits far more from SALT than the middle class or the other 99%. I live in a low tax but very wealthy town in a fairly moderately taxed state. Property taxes are low because there is a big business tax base in my town (hedge funds and financial services), but also because of economies of scale. Smaller areas that provide the same amenities as larger areas with smaller tax bases will always need to charge higher taxes. Many areas of Chevy Chase have neighborhood sponsored Fourth of July celebrations and trash/recycling pick up. In my town you need to pay for trash and recycling pick up service and the town pays for 4th of July celebrations, but not at a neighborhood level. Residents of high tax areas need to ask that the services that they receive change or accept that their taxes are funding a lot of services that they enjoy.

[Anonymous]

It’s a back door statutory rate increase to allow bills to score that in many cases, disproportionately impacts blue state taxpayers.

[Anonymous]

I can understand the case for capping SALT. But when you are paying a DC area mortgage as well as DC area childcare, it’s a significant percent of your income and there is not much relief in your taxes to show for it. I paid over 40K in childcare and got something like $400 back from the tax credit, So, objectively it just seems a little out of wack when I look at my tax bill. Slightly off topic but that’s why I always find myself wishing I could claim more under SALT

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I personally would be better off with a higher SALT limit, all else equal, but it's clearly the right policy to limit or eliminate the deduction.

SALT deductions have been around since the 1860s. Why? Because it was considered Big Government overreach for the federal government to double-tax the states.

The United States’ first income tax was enacted in 1861, and tweaked in 1862. Both versions contained only one deduction; and, you guessed it, it was the SALT deduction! A recently minted political party called the Republican party controlled Congress and a Republican-party President occupied the White House for the first time (a 6’ 4” fellow named Abraham Lincoln). Records of why the SALT deduction was included in the first income tax are scarce, but there are documented statements by Congressional Republicans that may support two justifications. The first was federalism and keeping the Federal tax out of the orbit of State levies. The second was double taxation: preventing the Federal government from taxing a dollar that the States had already taxed. There is no record of political discord over the SALT deduction.

https://www.chamberlainlaw.com/tax-blawg/history-of-the-salt-deduction

Capping SALT deductions in 2017 was the radical policy.

I don't see anything here making a serious policy case for a SALT deduction (and no, "we've done it this way for a century" is not a serious case). The core issue is that SALT amounts to a federal subsidy of state taxes and mortgage interest in proportion to the taxpayer's income, with high income folks receiving a greater subsidy as a percentage and folks in high tax states receiving a higher level of subsidy. This makes no sense! Just eliminate the deduction and lower the rates by a couple percentage points until revenue is equalized.

The states with low/no state income tax are subsidized by wealthier states - ie the ones that tend to have higher state and local taxes. Seems a fair way to offset that.

Not PP, but disagree with this statement. How are states w/higher state income tax, subsidizing those with lower state income tax ? It’s not like the high tax states are sending part of their state budget to the Feds to spend for the benefit of all. Sure, you can say they have higher per capita income, so what, they pay more federal income tax as they should, but has nothing to with the state taxes. They would pay the same Federal tax if they lived in low tax states.

The reality is that states with higher tax rates have chosen to provide more services and better paid civil servants, compared to that of low tax states. They may also be inefficient in providing those services. The SALT deduction is a way to hide this from their citizens. I say let them pay the full freight. And if they don’t like it, move or complain at the voter box.

[Anonymous]

Trump presidency
Taxes for Elon Musk: No
Taxes for Rockville, Maryland: Yes