Raising SALT Cap to $20,000 Would Mostly Benefit High-Income Households

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• Raising SALT cap to $20,000 would increase federal debt by $225 billion from 2025-2034
• Nearly all the benefit would go to households making about $200,000 or more
• The change would cut household taxes overall by an average of about $100
• Almost none of the benefit would go to middle- or low-income households

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The Debate Over the State and Local Tax Deduction Cap

• The SALT deduction cap was originally implemented as a political maneuver by former President Trump, primarily targeting high-tax blue states like New York and California.
• Supporters of the cap argue that it helps increase federal revenue and only targets higher-income taxpayers, while critics say it's unfair since it's more harmful in states with higher costs of living and taxes.
• Removing the cap or increasing it would significantly benefit residents of states like New York and California, enabling them to deduct a larger portion of the taxes they pay throughout the year.

Source

Newsweek

Impact of Raising the SALT Deduction Cap on Different Income Groups

• Households making $200,000 or less would see no change in their after-tax incomes if Congress increases the cap to $20,000.
• Those making between about $430,000 and $1 million (the highest-income 95-99 percent of households) would get a tax cut averaging nearly $1,400, or about 0.3 percent of their after-tax income.
• The average tax cut for married couples would be about $270. But middle-income couples would get a tax cut averaging about $10. Those in the 95th-99th percentile would get an average tax cut of about $1,500.

Source

Forbes

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