CNN
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Former President Donald Trump indicated Tuesday that he would reverse a controversial provision of his 2017 tax reduce bundle that restricted Individuals’ capability to deduct state and native taxes on their federal returns.
In a Truth Social post highlighting his Wednesday rally on Lengthy Island, New York, the place many residents have been affected by the cap, Trump wrote that he would “get SALT again, decrease your Taxes, and a lot extra.”
Eliminating the SALT cap is the most recent in a string of tax breaks Trump has introduced in his marketing campaign. Final week, he known as for ending taxes on overtime pay, and he beforehand mentioned he would remove taxes on tips and on Social Security benefits if he wins the presidential election.
Trump and congressional Republicans included the so-called SALT cap, which limits a taxpayer’s state and native tax deduction to $10,000, within the Tax Cuts and Jobs Act as a strategy to pay for different tax cuts within the regulation. It largely impacts higher-income individuals in high-tax blue states who itemize their deductions, however its unpopularity has led some GOP representatives in these states to name for its elimination because the occasion seeks to carry onto the Home on this 12 months’s election.
Democratic lawmakers have additionally promised to jettison the cap. Requested about Trump’s reversal, Senate Majority Chief Chuck Schumer, who represents New York, mentioned Tuesday, “I’ve at all times been for eliminating the cap on SALT. I believe it was a nasty piece of laws supported by Donald Trump, aimed on the blue states, which helped the individuals of their states in some ways.”
The cap, just like the TCJA’s different particular person tax provisions, is ready to lapse on the finish of 2025. Till now, Trump has repeatedly mentioned he would totally lengthen the expiring measures.
Elevating or eliminating the cap, nonetheless, could be very costly – which is one purpose Republican leaders have resisted efforts to alter it. Eradicating the restrict would improve the price of extending the 2017 tax reduce regulation by $1.2 trillion over a decade, in accordance with the Committee for a Accountable Federal Finances, which known as such a transfer “pricey, distortionary and regressive.” Some 92% of the aid would go to the highest 10% of households, whereas lower than 1% would go to the underside 60%.
CNN’s Morgan Rimmer contributed to this report.