Trump Advisers Consider Raising SALT Write-Off Limit to $20,000
(Bloomberg) -- Trump’s economic advisers are considering doubling the state and local tax deduction, a popular — but expensive — tax break that could deliver big savings to many residents of New York, New Jersey, and California.
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Economist Stephen Moore, a member of President-elect Donald Trump’s economic advisory transition team, told Bloomberg Thursday that the group has discussed expanding the tax write-off limit from $10,000 to $20,000.
Trump had vowed to revive the SALT deduction during the campaign — a particularly potent issue in states where the combination of high tax rates and expensive property values make the write-off especially valuable.
Moore said the group is opposed to making the deduction unlimited — as some New York and New Jersey politicians have advocated for — because that would amount to “the biggest tax cut for millionaires and billionaires ever.”
However, he added that doubling the deduction limit to $20,000 “would solve the problem for middle-class families in blue states.”
No decision has been made about whether to propose to apply the $20,000 limit to all taxpayers, or to just expand it for joint filers and preserve the $10,000 deduction for individuals, Moore said. Any changes to SALT would require congressional approval.
Trump’s pledge to expand SALT is tinged with a certain amount of irony: It was his 2017 tax-cut legislation that curbed the break. Since then, there’s been a bipartisan push from members of Congress representing New York City-area and Southern California districts to expand the deduction, which disproportionately affects residents in their areas of the country.
Lawmakers will get a chance to make changes to SALT next year, with major portions of Trump’s tax law — including the SALT limit — set to expire at the end of 2025. Republicans, who will control both chambers of Congress and the White House next year, are already drawing up plans on how to extend the tax law, though major fights are brewing over how to treat certain provisions, like SALT.
Many Republican members of Congress oppose expanding SALT because keeping the $10,000 limit in places helps offset the cost of other tax cuts. And in many lower-tax parts of the country — areas many GOP lawmakers represent — the deduction isn’t as valuable as it is in New York or Los Angeles.