Former President Donald Trump, a vocal supporter of tax cuts, is now reversing a key provision of his own 2017 tax law, proposing to scrap the $10,000 cap on state and local tax (SALT) deductions. This move, announced on Truth Social ahead of a campaign speech, is part of a broader push to cut taxes as he courts voters in the run-up to the 2024 election.
Key Points:
- SALT Deduction Cap: Introduced as part of Trump’s 2017 Tax Cuts and Jobs Act, the $10,000 cap on SALT deductions has been criticized by homeowners in high-tax states like New York and New Jersey, who were hit hardest by the measure.
- Reversal Plan: Trump now proposes eliminating the cap, along with other tax cuts aimed at lower- and middle-income Americans, such as ending taxes on Social Security benefits and income from overtime and tipped work.
- Economic Impact: While the cap’s removal would benefit many homeowners, especially in high-tax states, experts warn that repealing it could cost the U.S. $1.2 trillion over the next decade, adding to the national deficit.
- Political Reactions: Some lawmakers, particularly from high-tax states, have expressed support for the reversal, while others question Trump’s motives. Critics say his proposal contradicts the major legislation of his own administration.
As Trump pitches tax relief ahead of the 2024 election, his reversal on the SALT deduction cap is drawing both support and skepticism. The proposed changes highlight the tension between his pro-tax-cut stance and concerns over fiscal responsibility in an already strained economy.
