Trump’s welcome SALT switch: Restore the tax break back to what it was

Donald Trump is a late convert to restoring the federal income tax deduction of state and local taxes (SALT) that were capped at $10,000 when he signed his big Tax Cuts and Jobs Act in 2018. But Trump’s support is still most welcome and his fellow Republicans in Congress should follow his lead. The current law is simply unfair.

Before the Internal Revenue Code was changed, the full amount that Americans paid in property taxes, sales taxes and income taxes to localities and states was deductible on their 1040s. But in 2017, Trump and the GOP-controlled Congress, to help pay for their tax cuts, targeted this SALT deduction.

At first, it was going to be totally wiped out, punishing people in higher-taxed states like New York, California, New Jersey and Illinois (all states that favor Democrats). But a late intervention by moderate Republican Sen. Susan Collins of Maine capped the deduction at $10,000, which is what Trump signed. The $10,000 cap, along with the other tax changes, was set for eight years and sunsets when 2025 ends. Still, tax cuts for some become tax increases for others.

As we said last year: “Take a firefighter married to a teacher, not rich at all, but middle class. They own a house in the suburbs of New York and pay $20,000 in property taxes a year and thousands more in state income taxes. Yet, while once they could deduct all of those taxes, now only 10 grand can be deducted. That’s a tax hike on them.”

When Joe Biden took office in 2021, along with Democratic majorities in both houses of Congress, there was some hope for a restoration of the full SALT deduction, but it never made it into law, despite passing several times in the House.

Now comes Trump. That he finally came around on the eve of yesterday’s rally on Long Island to win support there — an area especially hurt by the SALT limit — is fine by us. That’s how politics works in a good sense. In 2017 and 2018, Trump in the White House, with a GOP House and a GOP Senate, wasn’t looking to win over the New York suburbs. Now he is.

Senate Majority Leader Chuck Schumer, who has been trying to restore the SALT deduction ever since the Republicans capped it, should use Trump’s support as leverage with the Senate’s Republican minority.

If lawmakers want to restrict those who can benefit by keeping the deduction to people with incomes less than $500,000 or if they want to limit the deduction to say, $80,000, instead of the current $10,000, are both fine options to prevent the super rich from getting the break.

But the unfairness must end.

Trump has also called for an end to taxes on tips, (as has Vice President Kamala Harris), to no more taxes on Social Security benefits and for overtime pay being tax free. That’s a lot of tax cuts, trillions in fact. Trump hasn’t said how they would all be paid for or if the federal deficit, approaching $2 trillion this year, would just grow, adding to the $35 trillion gross federal debt, of which $28 trillion is held by the public and rest is what Uncle Sam owes his various federal trust funds and other government accounts.

Restoring SALT must be first in line.