Former President Donald Trump called for reinstating the state and local tax deduction, known as SALT, that was capped in the 2017 tax law. This move would benefit Americans in high-tax blue states who itemize deductions. Trump’s suggestion to roll back this divisive policy is a departure from typical Republican opposition to the SALT deduction. Senate Majority Leader Chuck Schumer has expressed support for eliminating the SALT cap, while other Republicans see it as a tax cut favoring the wealthy.
The cost of eliminating the SALT cap could add $1.2 trillion to the national debt, according to projections. Despite the potential financial implications, Trump’s campaign has indicated support for providing tax relief to working Americans and seniors. However, there are no specific details on how this plan would be implemented.
Trump’s call to reinstate the SALT deduction has drawn mixed reactions, with some calling attention to the irony of his initial support for capping the deduction. Democratic politicians have criticized Trump’s remarks, accusing him and other Republicans of causing the tax burden on middle-class families in states like New York and New Jersey. It remains uncertain if a Republican-led Congress would support lifting the SALT cap, as it has faced resistance from some lawmakers within the party.
Overall, Trump’s proposal to reinstate the SALT deduction demonstrates a shift in his previous stance on tax policy and could have significant implications for future tax legislation if he returns to the White House.
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