Trump’s support for his own tax law is on the rocks

The Queens-born 2024 Republican presidential candidate said he agrees with a bipartisan effort by members of New York’s congressional delegation to support expanding federal deductions for state and local taxes paid. That’s a reversal of his policies and a big boost for high-tax states like New York.

The appropriate ceiling for the SALT deduction, or if there should be one at all, has been a longstanding intra-Republican source of conflict since the enactment of the Tax Cuts and Jobs Act of 2017. Because Republicans at the time had full control of the federal government, the TCJA introduced a $10,000 limit on the SALT deduction.

Previously, people could deduct all their state income and local property taxes on federal returns. Democratic-led blue states with high taxes were especially hard hit by the Republican legislation. But in many red states with low taxes or no income taxes at all, such as Texas and Florida, this wasn’t a problem.

For example, the average SALT deduction in California was more than $18,400. In the cap’s first year, Californians who itemized deductions were hit with a total additional tax burden of $12 billion, the state’s franchise tax agency reported at the time.

In part, the cap was intended to punish democratic states with high taxes and higher government services. It also increased revenue for some other provisions in the TCJA, such as lowering the corporate tax rate. The SALT cap remained in the TCJA in part at the insistence of then-House Speaker Paul Ryan, the Wisconsin Republican who frequently clashed with Trump, whom he did not vote for in November but instead in a other Republican wrote.

Democrats in Congress and allies, who generally opposed the TCJA, voiced particular criticism of the SALT change. Then-California Gov. Jerry Brown accused Republican congressional leaders of “exercising their power like a bunch of mafia thugs.”

In 2021, with President Joe Biden in office, Governor Gavin Newsom (D-CA) and six other Democratic governors sent the White House a letter urging him and Congress, then under unified Democratic control, to “reverse the cap to make’.

“Capping SALT was based on politics, not logic or good governance,” the governors argued. “This attack disproportionately targeted Democratic-led states.”

However, the Biden White House had other priorities, and nothing came of it.

Blue state Republicans support the SALT change

Some Republicans in Congress have long called for SALT changes. A group of Republican lawmakers in places like New York and California have been adamant about raising or eliminating that limit. The group’s efforts appeared to pay off on September 17, when Trump indicated he supports changes to the limit.

The former president said at a campaign rally in Uniondale, Long Island, that he would seek to eliminate the cap on state and local tax deductions that he imposed in his signature 2017 bill.

“I am going to restore SALT,” he said at his meeting, adding that the move would “save thousands of dollars for residents of New York, Pennsylvania and New Jersey.”

Trump, who faces an uphill battle for a second, non-consecutive presidential term against Vice President Kamala Harris, appears to view the repeal of the SALT cap as politically advantageous in wooing middle-class voters.

“I will turn it around, get SALT back, cut your taxes and much more,” Trump recently wrote on his social media platform Truth Social.

That’s music to the ears of House Republicans in swing districts, who have been particularly vocal lately in calling for an end to the SALT maximum deduction. Many are among the 18 Republican representatives in districts where Biden won more votes than Trump in 2020. They are under heavy attack ahead of the November 5 elections by Democrats in Congress, who need to win four seats to gain a majority in the 435-member House of Representatives.

“The $10,000 SALT deduction limit is a slap in the face to middle class families in #CA27. With the highest taxes and costs of living, Californians deserve better,” Rep. Mike Garcia (R-CA) wrote in a September 3 Instagram post.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINATOR

Garcia is a top Democratic target in the 27th Congressional District in northern Los Angeles County, which includes the cities of Lancaster, Palmdale and Santa Clarita. Biden would have won the district 55.1% to 42.7% against Trump in 2020.

“As a founding member of the bipartisan SALT Caucus, I am committed to addressing this unfair cap and bringing real relief to our hardworking families,” Garcia added.