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.

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.

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.

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.

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.

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.

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.

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.

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%