President Donald Trump said he would consider changes to a cap on the federal deduction for state and local taxes, one of the most divisive provisions of the 2017 Republican tax overhaul.
Trump told regional newspaper reporters in response to a question Wednesday that he’s “open to talking about” revisions to the so-called SALT cap, which limits to $10,000 the amount of state and local levies, including property taxes, that taxpayers can deduct each year on their federal returns.
“There are some people from New York who have been speaking to me about doing something about that, about changing things. It’s been severe on them,” he said.
The remarks were reported earlier in The Stamford Advocate.
While Trump offered no specifics on the complaints or what he might do, even his hint held the potential for enormous interest in New York, Connecticut, New Jersey and other high-tax states and municipalities. The SALT cap has hit taxpayers there particularly hard, because of higher state levies, property values and real estate taxes.
Revenue Raiser
The cap is a key revenue raiser in the $1.5 trillion tax-code overhaul, which slashed rates for business and individuals. Lifting the cap would cost around $673 billion over a decade, according to the conservative Tax Foundation, a sum that might require raising the newly lowered 21 percent corporate rate to absorb the cost.
Despite Trump’s remarks, the idea appeared to be dead already on Capitol Hill.
Senate Finance Committee Chairman Charles Grassley, via a spokesman, shot down the idea of altering the SALT cap.
“It’s ironic that the same Democrats who criticized the Tax Cuts and Jobs Act for supposedly benefiting only the wealthy are now advocating for a change to the law that would primarily benefit the wealthy,” Grassley spokesman Michael Zona said in a statement.