By james art Donald Trump has a positive track record of tax and regulatory reform. But he also has some bad ideas.
At a recent Al Smith benefit dinner, Mr. Trump voiced support for repealing part of his 2017 tax bill. Trump during his speech. “We’ll bring it back.”
This is not the first time Mr Trump has floated the idea. Before a September rally in Long Island, Mr. Trump wrote on Truth Social that he would “get your SALT back, cut your taxes and much more.”
SALT stands for “State and Local Tax.” This refers to the ability of taxpayers to deduct these levies from their personal income on their federal tax returns. In California, the top state income tax rate is more than 13 percent. In New York, it’s 10.9 percent. Wealthy people often pay hefty sums in property taxes as well.
In 2017, Mr. Trump’s Tax Cuts and Jobs Act capped the SALT tax deduction at $10,000. In 2022, fewer than 10 percent of taxpayers itemized their deductions thanks to the higher standard deduction. If someone pays significantly more than $10,000 in state and local taxes, they are almost certainly doing well financially.
“According to the Joint Committee on Taxation, more than 88 percent of the benefits of state and local tax deductions accrued to those with incomes above $100,000 in 2014, while only 1 percent flowed to taxpayers with incomes below $50,000.” , Jared Walczak, vice president of government projects with the Tax Foundation, wrote in a 2017 report.
That being said, it’s safe to assume that Democrats were thrilled that Mr. Trump limited that deduction. After all, they generally oppose regressive tax breaks.
You would be wrong. The SALT tax deduction disproportionately benefits those in deep blue, high-tax states.
“Six states—California, New York, New Jersey, Illinois, Texas and Pennsylvania—claim more than half the value of the deduction,” Mr. Walczak wrote in 2017.
Politicians in California and New York liked the SALT deduction because it artificially lowered the cost of their states’ high taxes, making it more palatable for their constituents to tolerate their extravagance. Without the deduction, high-income taxpayers bear the full burden of high state and local taxes.
The easy solution is to lower these tax rates. But Democrats don’t care, and many blue-state voters now want the deduction back. Mr. Trump understands politics, which is why he promotes it. But taxpayers across the country shouldn’t be subsidizing wealthy taxpayers in wasteful states like California and New York.
Mr. Trump recently made headlines by working at McDonald’s. Salty fries taste great, but otherwise the SALT should be laid off