Whenever Donald Trump is in the White House and Republicans control Congress, magnificent things happen. One of my favorites is that seemingly out of the blue, they correct unfair policies that weren’t even on my radar. That’s exactly what happened when Congress passed the Tax Cuts and Jobs Act (TCJA) in December 2017, and President Trump signed it into law.
One of the things the TCJA did for the first time ever was to cap the amount of State and Local Tax (SALT) taxpayers could deduct from their federal taxes at $10,000.
Understand what a massive shift towards fairness this change was for low-tax states.
Prior to the SALT cap, lefty elites who lived in lefty, elitist blue states could vote for every lavish, socialist policy they favored to be enacted by their local and/or state governments. Naturally, this drove up state and local taxes — income, sales, and property — to obscene levels. But the wealthy leftists in these places didn’t have to worry about that — they could go ahead and deduct the unlimited amount of state and local taxes they paid from their income when they filed their federal taxes.
As an example, if a liberal in New York or California earned $200,000 and paid $35,000 of that in state and local taxes, she could adjust her gross income to $175,000 when she calculated her federal tax bill, which would then be based on that lower amount. Then she could enjoy life in her blue state of fully subsidized illegal alien families sopping up public resources, trash picked up and hauled to the dump for her, six months of paid maternity/paternity leave, electric buses, fancy bike paths no one will use, and every other feel-good liberal public-money suck you can think of.
So what if the pregnant waitress in Mississippi and the HVAC technician in Alabama have to make up the difference when they pay their federal taxes?
You see, every tax dollar liberals pay to fund their blue state and town’s extravagant social spending reduces the amount of taxes they pay to the federal government. Thus, people who are smart enough to live in low-tax states precisely because they don’t believe in lavish, expensive public programs wind up paying a higher rate of federal tax because they don’t have hefty state and local taxes to deduct from their income when calculating what they pay to Uncle Sam.
Exclusively for our VIPs: Why Is It Taking So Long for the NY Court to Decide Trump’s Fraud Appeal?
To be fair, President Trump himself was born and bred in a blue city and state, and he did not lead the way on establishing the SALT cap. When he was campaigning for re-election in the fall of 2024, he even went so far as to say that he would support raising the cap or even getting rid of it. But now, as House Republicans wrangle among themselves to pass his One Big, Beautiful Bill (OBBB), Trump is promoting its presence in the budget.
Trump traveled to Capitol Hill on Tuesday to urge Republicans to stop squabbling and pass his OBBB. There, he addressed the so-called SALT Caucus, a group of blue-state Republicans who are holding out for a big increase in the SALT cap. They already rejected an increase of the existing cap from $10,000 to $30,000 as too low, causing fiscally conservative Republicans from lower-tax states to drop anchor on the bill’s progress.
According to sources in the meeting, Trump specifically told the Salt Caucus to “Let it go.” NBC reports:
While Trump directed his comments at all the lawmakers negotiating a higher SALT cap, he singled out moderate Rep. Mike Lawler, R-N.Y., who is considering a bid for governor in Trump’s former home state.
“End it, Mike, just end it,” Trump said, according to two of the lawmakers. (Notably, when Trump endorsed Lawler this month for re-election to his battleground House seat, he touted Lawler’s efforts to increase the SALT cap.)
Whatever his inborn native-New Yorker biases, Trump is now making the right call. The SALT cap should be here to stay. It’s only fair that, if wealthy elites in affluent states want to enact profligate public policies, they should be the ones to pay for them — not the thrifty, practical, hard-working residents of lean, small-government states.
You hear terms like “SALT cap” bandied about all the time in the media, but only PJ Media bothers to explain to you what’s at stake. Keep it coming! Support our work by becoming a PJ Media VIP — and at the same time, treat yourself to full access to our news site, including behind-the-paywall material and our community of like-minded commenters — all without the hassle of distracting ads. VIP status is currently available at an unheard-of 60% off. That’s less than $20 for a full year! Click here and use the promo code FIGHT to become a VIP today! We are most grateful for your support.
