SALT in the Wound

The Tax Cuts and Jobs Act (TCJA) put a limit on how much Americans can deduct their State and Local Tax (SALT) from federal taxes. SALT deductions encourage high tax states to keep their taxes high or to raise them. And because the cost of federal tax deductions is spread among all U.S. taxpayers in the form of higher federal tax rates, the SALT deduction forces taxpayers in low-tax, low-debt states to subsidize the excessive government spending of high-tax, high-debt states.

SALT deductions should be repealed altogether, but a bill currently before the House seeks to raise those deductions. An increase in the limit that can be deducted would encourage blue states to raise taxes and cost $11.2 billion this year for Americans who earn less than $500,000.

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