Former President Donald Trump now appears to support expanding federal deductions for state and local taxes paid, a reversal of his own policies and a major boost to high-tax states such as New York.
Trump’s 2017 Tax Cuts and Jobs Act included a $10,000 cap on SALT deductions, and a group of lawmakers in places such as New York and California have been adamant in pushing for that cap to be raised or eliminated. Their effort appeared to bear fruit on Tuesday when Trump signaled that he supports changes to the cap.
“Hundreds of thousands of Migrants, Crime at record levels, Terrorists pouring in, Inflation eating your hearts out — WHAT THE HELL DO YOU HAVE TO LOSE? VOTE FOR TRUMP! I will turn it around, get SALT back, lower your Taxes, and so much more,” Trump said in a post on his social media platform, Truth Social.
The Washington Examiner reached out to the Trump campaign for further details about the former president’s position on the matter and what SALT relief might entail but did not receive a response. Trump is set to headline a rally on Long Island in New York on Wednesday and said that he thinks the campaign has a “real chance” of winning the deeply blue state in November.
Notably, many of Trump’s fellow Republicans don’t support changes to the SALT cap because they see it as a tax break for the wealthy. Meanwhile, some Democrats in high-tax states support raising or removing the cap.
But a group of Republicans in places such as New York who have been pushing hard for changes to the cap were already celebrating the policy shift from Trump on Tuesday.
“President Trump has watched New York Republicans advocate to make life more affordable for our neighbors,” Rep. Anthony D’Esposito (R-NY) said to the Washington Examiner in a text message. “SALT is a priority — one I will keep fighting for and look forward to restoring the deduction in the 119th Congress with President Trump in the White House.”
“He knows how important it is to New Yorkers, and I look forward to delivering relief!” Rep. Marc Molinaro (R-NY) told the Washington Examiner.
Both congressmen are members of what is known as the SALT Caucus, which consists of Republicans and Democrats from high-tax states such as New York and California. They have been pushing to have the cap eliminated or at least raised.
But the move is likely to face resistance from fiscal conservatives and budget hawks, who are opposed to raising the cap and are worried about further growing the deficit. Raising the cap would reduce the flow of tax revenue and add to the precarity of the country’s fiscal footing.
“Just when you thought the debt-financed pandering couldn’t get any worse, here is a massively expensive plan that apparently would go on the nation’s credit card,” Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, told the Washington Examiner.
Under current law, the $10,000 cap on SALT deductions is scheduled to expire at the end of next year, along with the other individual provisions of the Trump tax law. But if full SALT deductions were restored immediately, the federal government would lose over $100 billion a year for the next two years, the Tax Foundation has estimated.
Critics also pan SALT deductions as disproportionately benefiting the wealthy. A study from the Tax Policy Center found that only about 9% of households would benefit from a full repeal of the cap. Additionally, TPC found that the highest-income 20% of households would receive more than 96% of the tax cut.
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Trump has proposed a number of new tax cuts this election cycle. For instance, the former president has come out in support of eliminating taxes on tips and Social Security, and he has said he wants to see the corporate tax rate, lowered as part of the 2017 tax cuts, slashed even further.
Congressional reporter Cami Mondeaux contributed to this report.