Trump Proposes Repeal of SALT Deduction Cap Amid Campaign Promises

Former President Donald Trump recently signaled his intention to reverse a contentious provision from his 2017 tax overhaul that capped state and local tax (SALT) deductions. In a post on Truth Social, he highlighted his upcoming rally in Long Island, New York—an area particularly impacted by this cap. Trump stated his commitment to “get SALT back, lower your Taxes, and so much more.”

The proposed elimination of the SALT cap marks the latest addition to Trump’s series of tax initiatives during his campaign. Just last week, he proposed removing taxes on overtime pay, and previously, he indicated plans to eliminate taxes on tips and Social Security benefits if he were to secure another term in office.

The SALT cap, which limits deductions for state and local taxes to $10,000, was introduced in the Tax Cuts and Jobs Act (TCJA) as a measure to offset other tax reductions. While it primarily affects higher-income taxpayers in high-tax blue states who itemize their deductions, the unpopularity of this provision has spurred some Republican lawmakers in these states to advocate for its removal, particularly as the party aims to maintain its majority in the House during the upcoming elections.

Democratic leaders have also expressed their support for abolishing the SALT cap. Senate Majority Leader Chuck Schumer, representing New York, commented on Trump’s proposal, stating, “I’ve always been for eliminating the cap on SALT. I think it was a nasty piece of legislation supported by Donald Trump, aimed at the blue states, which helped the people of their states in many ways.”

Currently, the SALT cap, along with other individual tax provisions from the TCJA, is scheduled to expire at the end of 2025. Until recently, Trump has consistently asserted that he would extend these expiring measures in full. However, raising or abolishing the SALT cap would be financially burdensome—one reason GOP leaders have historically resisted modifying it. According to the Committee for a Responsible Federal Budget, removing the cap could increase the cost of extending the 2017 tax cuts by approximately $1.2 trillion over the next decade. They describe such a move as “costly, distortionary, and regressive,” noting that about 92% of the benefits would accrue to the top 10% of households, while less than 1% would reach the bottom 60%.

As Trump continues to outline his tax proposals, the implications of reversing the SALT cap are significant, particularly for voters in high-tax states who have felt the impact of the limitations on their federal deductions. This issue is likely to remain a focal point in discussions surrounding tax policy and electoral strategies as the presidential race heats up.

With Trump’s increasing focus on tax cuts, it remains to be seen how his proposals will resonate with voters across the political spectrum. The broader implications for the Republican Party, especially in blue states, could also shape legislative priorities in the near future. As the campaign unfolds, the interplay between tax policy, voter sentiment, and party strategy will be crucial in determining the outcome of the election and future tax legislation.

In summary, Trump’s suggestion to repeal the SALT cap not only reflects a shift in his campaign strategy but also highlights ongoing tensions surrounding tax policy in the U.S. The debate over the SALT deduction will likely influence both political discourse and voter priorities as the election approaches.