Trump does U-turn on 'SALT' deduction cap

Former President Donald Trump seemed to float eliminating the $10,000 cap on state and local tax deductions in a social media post Tuesday ahead of a rally this week in support of vulnerable Republican House members from New York.

Trump was responsible for signing the so-called SALT cap into law, as part of the 2017 tax package, which he has vowed to extend if elected. The cap, which helped bring down that law’s 10-year price tag to $1.5 trillion, has proven unpopular among lawmakers from high-tax states.

Trump promised to “get SALT back, lower your Taxes, and so much more,” in a post on his social media platform Truth Social encouraging attendance at a rally he’s holding in Long Island on Wednesday. Trump’s campaign did not immediately respond to a request for more clarity.

Rep. Anthony D’Esposito, R-N.Y., whom Roll Call identified as among the most vulnerable incumbents heading into November, represents the Nassau County district where the rally is taking place. He and other New York Republicans, along with other GOP members from high-tax states such as California, have made eliminating the $10,000 SALT cap a priority in the House, despite low support among others in their party.

House Ways and Means Chairman Jason Smith, R-Mo., didn’t comment immediately on Trump’s reversal. Senate Finance Chairman Michael D. Crapo, R-Idaho, told reporters Tuesday he favors extending the current SALT limit, though he allowed that “everything is up for negotiations” during the 2025 tax debate.

Democrats, who are more likely to hail from high-tax states, tend to be more sympathetic to lifting the cap, though they were unable to gin up enough support in both chambers to do so in 2021-2022 when they had control of both chambers and the White House. Democrats sparred over the SALT cap in the 117th Congress because undoing the limit would benefit the wealthiest households the most.

Senate Majority Leader Charles E. Schumer, D-N.Y., in his own social media post Tuesday said Trump’s new position on SALT limits wouldn’t help GOP lawmakers’ standing in his home state.

“Donald Trump took away your SALT (deductions) and hurt so many Long Island families. Now, he’s coming to Long Island to pretend he supports SALT,” Schumer wrote on X, formerly Twitter. “It won’t work.”

The cap is due to expire at the end of next year, along with many of the individual and small business tax breaks included in the 2017 law.

Before 2018, taxpayers could deduct all of what they paid in state and local taxes from their federal tax bill, though the deduction wasn’t available to taxpayers subject to the alternative minimum tax, also rolled back under the 2017 law. The wealthiest households typically didn’t pay the old AMT though because their regular tax liability was higher.

SALT relief is the latest tax break Trump has floated on the campaign trail, joining proposed exemptions for tips, overtime wages and Social Security payments.

The proposals would add to the already hefty cost of extending the 2017 tax provisions, which include deductions for small businesses, individual tax breaks and more generous tax treatment of corporate profits earned abroad.

Fully extending the expiring 2017 provisions for another decade would cost $4 trillion, not counting debt service costs, according to the Joint Committee on Taxation. Extending those provisions, and allowing the SALT cap to expire would add an additional $1.2 trillion in foregone revenue over the next decade, according to the Committee for a Responsible Federal Budget, a nonpartisan think tank.