Trump Must Not Repeal SALT

Imagine this: You live in a state with low taxes, like Texas or Florida, and your federal tax dollars are being used to offset the tax bills of wealthy residents in high-tax states like New York or California.
Sounds unfair, doesn’t it? That’s exactly how the tax system worked before 2017, when Donald Trump’s Tax Cuts and Jobs Act (TCJA) introduced a cap on the state and local tax (SALT) deduction. While the cap sparked heated debates, it was one of the most groundbreaking and fair changes to the tax code in recent history.
Before the SALT cap, taxpayers could deduct the full amount of their state and local taxes—property taxes, state income taxes, and sales taxes—from their federal taxable income. On the surface, it seemed like a harmless way to reduce tax bills. But who actually benefited? Mostly the wealthy, especially those living in high-tax states.
A millionaire in New York could write off tens or even hundreds of thousands of dollars in state taxes, slashing their federal tax bill. Meanwhile, a middle-class family in a low-tax state wouldn’t even come close to those kinds of savings. In effect, federal taxpayers in low-tax states were subsidizing the high-tax lifestyles of the rich in states like New York, New Jersey, and California.
The SALT cap changed all of that. By limiting the deduction to $10,000, the TCJA ensured that the wealthiest taxpayers—those with the largest state and local tax bills—couldn’t use the federal system to shield themselves from paying their fair share. This wasn’t just a technical adjustment; it was a bold move to level the playing field. Under the new rules, taxpayers across the country were treated more equally, regardless of where they lived.
But the benefits of the SALT cap went beyond fairness. It also exposed a long-standing problem in high-tax states: their reliance on the SALT deduction to hide the true cost of their tax policies. For years, governors and legislators in states like New York and California could raise taxes without facing full backlash from their citizens because the SALT deduction softened the blow.
Wealthy residents, who paid the highest state taxes, could deduct those payments on their federal returns, making the increases feel less painful. With the SALT cap in place, taxpayers started to feel the full impact of their state taxes. Suddenly, high-tax states couldn’t hide behind the federal government’s safety net, and they were forced to confront their spending and tax policies head-on.
This accountability is one of the most overlooked successes of the SALT cap. States now had to make tougher decisions about how to balance their budgets and justify their tax rates to voters. Why should taxpayers in Texas or Florida have to subsidize high-tax policies in New York? The SALT cap encouraged states to look inward and take responsibility for their absurdly high taxes.
Some often claim it unfairly hurt middle-class families in high-tax states. This argument, however, doesn’t hold up under closer scrutiny. Most middle-class families don’t pay enough in state and local taxes to hit the $10,000 cap. In fact, according to the Tax Policy Center, only about 9% of all taxpayers were affected by the cap, and the majority of them were wealthy households earning over $100,000 per year. For the average taxpayer, the SALT cap didn’t make much of a difference.
What did make a difference was how the TCJA used the savings from the SALT cap to fund other tax cuts. The standard deduction nearly doubled, jumping from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples.
The Act also expanded the Child Tax Credit from $1,000 to $2,000 per child, providing much-needed relief to parents. By limiting a tax break that primarily helped the wealthy, the TCJA redirected those benefits to middle-class families, making the tax system more balanced and fair.
Despite these benefits, the SALT cap remains a lightning rod for controversy. Trump himself suggests he might remove the cap after mounting pressure from Republicans in high tax states. At first glance, this might sound like a win for taxpayers, but removing the cap would primarily benefit the wealthy once again.
Removing the SALT cap would also take the pressure off high-tax states to manage their budgets more responsibly. Without the cap, state governments could go back to raising taxes on their wealthiest residents without worrying about voter backlash, knowing those taxpayers could simply deduct the increases on their federal returns.
The SALT cap wasn’t perfect—no policy is. But it achieved something rare in tax law: it made the system fairer, more accountable, and more focused on helping the middle class. It ensured that the wealthiest Americans paid their fair share, encouraged state governments to take responsibility for their spending, and redirected tax benefits to families who needed them most.
As Trump considers removing the SALT cap, we must ask ourselves what kind of tax system we want. Do we want one that favors the wealthiest at the expense of everyone else, or one that holds both taxpayers and governments accountable? The SALT cap was a step toward fairness and responsibility—a policy that challenged the status quo and proved that meaningful reform is possible. Undoing it would be a step in the wrong direction.