First, some background. In the US, you are allowed to deduct some of the costs of your state and local taxes from your federal income tax, though most taxpayers don't bother to itemize thier taxes and just tax a standardized deduction (as the itemizing usually won't save you more than than the standard deduction), the primary group of people that benefit are the rich.
Since SALT works by deducting the cost of local taxes from federal taxes, it's obviously most useful to taxpayers in high tax states, as they get the largest reduction in thier federal tax burden.
Prior to 2017, there was no limit to how much you could list in deductions for SALT, however Trump's tax bill changed that, instituting a cap of $10,000 to that deduction, with the end effect of substantially increasing taxes on the rich, particularly rich people in high tax states. His precise reasoning for doing so has been debated, with opinions ranging from it simply being good policy (uncapped salt tax deductions effectively let states shift the federal tax burden towards tax payers and states with lower income) to a more partisan tactic ("rich person in high tax state" more or less translates to "democrat", a demographic infamous for demanding higher taxes, and the SALT deduction let's them avoid actually paying those higher taxes), to just plain and simple spite.
Ok,so with that background out of the way, the key issue is how those state's congressional reps have responded to to this policy. Namely, by mischaracterizing what it does and demanding its repeal. To a degree this is expected, representatives are beholden to the interests of their constituents, but thier inability to make an honest case for repealing this given its obvious conflict with the rest of thier rethotic on both taxes and what the Trump tax bill actually did is at least amusing.
What are your thoughts on the issue?
Since SALT works by deducting the cost of local taxes from federal taxes, it's obviously most useful to taxpayers in high tax states, as they get the largest reduction in thier federal tax burden.
Prior to 2017, there was no limit to how much you could list in deductions for SALT, however Trump's tax bill changed that, instituting a cap of $10,000 to that deduction, with the end effect of substantially increasing taxes on the rich, particularly rich people in high tax states. His precise reasoning for doing so has been debated, with opinions ranging from it simply being good policy (uncapped salt tax deductions effectively let states shift the federal tax burden towards tax payers and states with lower income) to a more partisan tactic ("rich person in high tax state" more or less translates to "democrat", a demographic infamous for demanding higher taxes, and the SALT deduction let's them avoid actually paying those higher taxes), to just plain and simple spite.
Ok,so with that background out of the way, the key issue is how those state's congressional reps have responded to to this policy. Namely, by mischaracterizing what it does and demanding its repeal. To a degree this is expected, representatives are beholden to the interests of their constituents, but thier inability to make an honest case for repealing this given its obvious conflict with the rest of thier rethotic on both taxes and what the Trump tax bill actually did is at least amusing.
What are your thoughts on the issue?
