Staff Reports
Former President Donald Trump has a knack for embracing his roots, even if he currently calls Florida home. Queens-born and New York-bred, Trump is now toeing the line with a bipartisan crowd, expressing support for the federal deductions for state and local taxes (SALT). This move represents a head-scratching reversal from his earlier policies and serves up a nice gift for the tax-burdened New Yorkers and other high-tax states. Who knew that the king of tax reforms would suddenly find himself in the SALT-loving camp?
The SALT deduction cap has caused quite a stir among conservatives ever since the 2017 Tax Cuts and Jobs Act (TCJA) was passed. Back then, Republicans, in control of both the presidency and Congress, decided to slap a $10,000 cap on these deductions. While this strategic play aimed to poke fun at the high-tax blue states, many red states with friendly tax environments laughed all the way to the bank. Texas and Florida didn’t bat an eye, while folks in California were left cringing under a hefty additional tax bill. It was almost like teasing a kid for having to wear a parka while the rest of the country enjoyed the warmth of mild weather.
“I will restore the SALT deduction,” says Trump, who restricted the SALT deduction in his signature 2017 tax law with the support of nearly every Republican in Congress and opposition from 100% of Democrats. pic.twitter.com/pUuLIztAQK
— Sahil Kapur (@sahilkapur) September 24, 2024
As it turns out, the average SALT deduction for folks in California actually blew past $18,400. Thanks to the cap, they were collectively left facing an extra tax burden of around $12 billion in just the first year. This was the kind of punishment that Democrats could only fume about while simultaneously claiming the GOP was ganging up on them. The whole scenario was reminiscent of a high school debate team in which one group pays off the judges while the other whole-heartedly defends their paper-thin argument against common sense.
Fast forward a few years, and with President Biden’s administration in full swing, Democrats are back at it again, whining about the SALT cap just like those long-lost progressives in plaid jackets at a Republican fundraiser. They tried getting the cap lifted, full of righteous indignation that the change disproportionately affected Democratic-run states. But the Biden White House was too busy focusing on other, equally dubious priorities, leaving these governors high and dry with nary a tax break in sight.
Now, a flock of congressional Republicans from high-tax states is eager to undo the cap, and Trump’s newfound support seems like a strategic political maneuver. At a recent rally in Uniondale, Long Island, the former president cheekily pledged to eliminate the salt cap, which he initially imposed just a few years prior. This reversal isn’t just about tax policy; it’s a classic Trump move aimed at appealing to middle-class voters and snatching a few extra votes from the grasp of Vice President Kamala Harris in the upcoming election.
With swing districts holding the keys to the majority in the House, several Republicans have jumped aboard the cap repeal train. It’s a classic case of a political maneuver that serves both personal and party interests, and many expect it to resonate well with constituents who are tired of shelling out exorbitant taxes. California’s own Rep. Mike Garcia isn’t shy about voicing his frustration over the cap, labeling it a slap in the face to hardworking families. It’s hard to argue against that when families are faced with unaffordable costs in the Democratic utopia of California. As the election approaches, one can only wonder if this new love for SALT will pay off for Trump or leave him in a bucket of political brine.
