Former President Donald Trump has voiced opposition to efforts aimed at lifting the cap on state and local tax (SALT) deductions, calling the move a “gift” to Democratic governors. This stance adds complexity to House Republicans’ plans to pass a broader tax and spending package that includes raising the SALT cap from $10,000 to $30,000. The proposed revision includes a phaseout for households earning above $400,000.
Trump criticized the move, stating it would mainly benefit high-tax blue states like California, New York, and New Jersey. He specifically named California Governor Gavin Newsom, accusing him of doing a “horrible job” managing the state.
“We want to benefit Republicans, because they are the ones that are going to make America great again,” Trump said before a closed-door GOP caucus meeting.
The 2017 Tax Cuts and Jobs Act capped the SALT deduction at $10,000. With that law set to expire in December, some Republicans — particularly those representing swing districts in high-tax states — are under pressure from constituents to raise the cap.
According to the Tax Foundation’s analysis, the revised SALT proposal would largely benefit upper-middle-income households, particularly those earning between the top 40% and top 5% income brackets. Wealthier earners, however, could see a slight tax increase due to the phaseout clause.
While Trump previously campaigned on restoring SALT deductions, he now appears to be reversing his stance. In a September social media post, he had promised: “I will get SALT back, lower your taxes, and so much more.”
As debate continues, the SALT cap remains a politically sensitive issue that could significantly impact tax burdens — and the 2024 election landscape.
