Trump suggests reversing his cap on state and local tax deductions

(CNN) — Former President Donald Trump indicated Tuesday that he would reverse a controversial provision of his 2017 tax cut package that limited Americans’ ability to deduct state and local taxes on their federal returns.

In a Truth Social post highlighting his Wednesday rally on Long Island, New York, where many residents have been affected by the cap, Trump wrote that he would “get SALT back, lower your Taxes, and so much more.”

Getting rid of the SALT cap is the latest in a string of tax breaks Trump has announced in his campaign. Last week, he called for ending taxes on overtime pay, and he previously said he would eliminate taxes on tips and on Social Security benefits if he wins the presidential election.

Trump and congressional Republicans included the so-called SALT cap, which limits a taxpayer’s state and local tax deduction to $10,000, in the Tax Cuts and Jobs Act as a way to pay for other tax cuts in the law. It largely affects higher-income people in high-tax blue states who itemize their deductions, but its unpopularity has led some GOP representatives in those states to call for its elimination as the party seeks to hold onto the House in this year’s election.

Democratic lawmakers have also promised to jettison the cap. Asked about Trump’s reversal, Senate Majority Leader Chuck Schumer, who represents New York, said Tuesday that he’s always supported eliminating the cap, which he called “a nasty piece of legislation supported by Donald Trump.”

Schumer blasted Trump on the Senate floor Wednesday, saying the former president “must be suffering from selective amnesia, because he was the one who took away people’s SALT deductions in the first place. His tax bill did it – a dagger aimed at blue states that want to spend a little more to help people with housing, and health care, and education, transportation.”

“All of a sudden, now that he is on Long Island, Donald Trump’s selective amnesia kicks in and he totally reverses himself on SALT,” Schumer continued.

The cap, like the TCJA’s other individual tax provisions, is set to lapse at the end of 2025. Until now, Trump has repeatedly said he would fully extend the expiring measures.

Raising or eliminating the cap, however, would be very expensive – which is one reason Republican leaders have resisted efforts to change it. Removing the limit would increase the cost of extending the 2017 tax cut law by $1.2 trillion over a decade, according to the Committee for a Responsible Federal Budget, which called such a move “costly, distortionary and regressive.” Some 92% of the relief would go to the top 10% of households, while less than 1% would go to the bottom 60%.

At least one Republican leader poured cold water on the idea of eliminating the SALT cap on Wednesday.

Senate Minority Whip John Thune said the changes to the deduction were used to offset the price tag of the 2017 tax package and will be needed for the same reason when Congress has to address the law’s expiring provisions next year.

“That was a big pay-for in 2017 and there will be a lot of, certainly, pushback from some of our members who think that subsidizing the high tax states isn’t a good idea,” Thune told reporters in the Capitol, noting that he’d like to see the cap extended.

CNN’s Morgan Rimmer and Ted Barrett contributed to this report.

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