Accounting
SALT cap for high earners gets outsize attention in Congress
The state and local tax deduction — the subject of one of the most contentious fiscal fights in Congress — is a write-off that most Americans will never claim, even in the districts of the lawmakers fighting hardest to increase the tax break, data analyzed by Bloomberg News shows.
Congress will draft its multitrillion tax cut
Republicans led by President Donald Trump, who vowed to expand the SALT cap on the campaign trail, are on track to increase the $10,000 cap on the deduction. The president in his first term limited the deduction — which is claimed by roughly 10% of people who have itemized their taxes in recent years — as a way to pay for other tax cuts.
But SALT has become a politically important tax break in key areas, and it’s receiving such outsize attention because of legislative math. The House cannot pass a tax bill this year without placating a handful of swing districts, where the local taxes and property values are high enough that the SALT deduction is a big deal.
Six House Republicans — Mike Lawler, Nick LaLota, Nicole Malliotakis and Andrew Garbarino of New York, New Jersey’s Tom Kean Jr. and California’s Young Kim — have vowed to oppose any bill that doesn’t sufficiently raise the SALT cap, and that a proposal to raise it to $25,000 falls short. Lawler
The data shows that even in these SALT-heavy districts, the average person isn’t much affected by the cap. For all six Republicans who are members of the bipartisan SALT Caucus, the average amount of state, local and property taxes paid is far below $10,000 per year.
Most taxpayers don’t have enough deductions from $10,000 in SALT, mortgage interest write-offs and charitable donation tax breaks to itemize. Instead, about 90% of taxpayers opt for the standard deduction: $15,000 for individuals or twice that for joint filers in 2025.
It’s only about the 10% of taxpayers who itemize who are even eligible to claim SALT — many of them with expensive homes, high incomes and large property tax bills. That means they can’t claim SALT, though advocates note that a higher cap would mean it would make financial sense for more people to itemize.
The need to include a SALT cap increase to benefit these taxpayers means that other tax breaks likely will have to be curtailed or spending cuts increased to keep within a maximum $5.8 trillion deficit increase target.
Support from the six core Republicans standing firm on the SALT issue are crucial to the success of the tax bill, which Republicans are looking to ram through Congress this summer without the help of any Democrats. The GOP’s razor-thin majority means they can only lose a handful of votes on any piece of legislation.
Republicans will also likely need to hold these seats in the New York City and southern California areas if they are to retain control of the House in the 2026 midterms, a reason Trump has cited for the necessity to raise the SALT deduction.
Leading Teams Through Energy and Macro Volatility
Managing Mortgage Rates and High Home Prices for home buyers
Alphabet Inc. Faces Investor Scrutiny After Reporting Negative Free Cash Flow for the first time
Armanino adds Strategic Accounting Outsourced Solutions
New 2023 K-1 instructions stir the CAMT pot for partnerships and corporations
Tax Strategy: Employee Retention Credit update
-
Economics1 week agoThe Warsh Shift: How the New Fed Chair Is Balancing War Drags and Tech Winds
-
Economics1 week agoGlobal Trade Realignment and Supply Chains in 2026
-
Economics1 week agoLabor Market Calibration: Analyzing the Shift Toward Skill-Based Allocation in 2026
-
Finance1 week agoSouth Korea Raises Interest Rates to 2.75% for the First Time in More Than Three Years
-
Finance1 week agoTokenized Real-World Assets: Institutional Ledger Adoption Achieves Scale in July 2026
-
Leaders1 week agoBerkshire Hathaway Chairman Reshapes His Long-Term Philanthropic Strategy
-
Economics7 days agoUK Has a New Prime Minister Without a General Election
-
Economics1 week agoGlobal Stock Market Weekly Recap: Tech Sell-Off Sparks International Rout