SALT

What to Know: The state and local tax deduction—a feature of the federal income tax code that benefitted high-tax states—is again under discussion.

“President Trump again indicated this week he might be open to revisiting the controversial new limit on state and local tax deductions that hits many middle-income residents hard in California and other high-tax, Democratic states,” the Los Angeles Times reports. “Even so, don’t count on any changes to the Republican tax bill that went into effect last year happening any time soon. Legislative and political realities mean the $10,000 cap is unlikely to be scrapped or increased until after the 2020 elections at the earliest.”

The TPPF Take: The state and local tax (SALT) deduction essentially forces taxpayers in low-tax states to subsidize tax hikes in New York, California and other high-tax states.

“In a lawsuit filed last summer, New York and other high-tax states claimed that the tax cuts are nothing more than an attempt by Republicans to pressure them into cutting taxes and reducing the size of government,” says TPPF’s Chuck DeVore. “The fact is that states like New York are overtaxing their residents, and the response is predictable—residents are voting with their feet and leaving for better opportunities.”

More From TPPF: