The Brian Lehrer Show SALT Cap Trade-Offs
May 29, 2025
Andrew Lautz, Associate Director for the Bipartisan Policy Center’s Economic Policy Program, dives into the complex world of the SALT deduction. He unpacks the implications of raising the cap on SALT deductions, especially for taxpayers in New York and New Jersey. Discussions reveal the historical roots of the current cap and the bipartisan divide surrounding it. Lautz also explores the potential consequences of proposed tax reforms, particularly how they affect high-income earners and seniors, sparking a need for more bipartisan dialogue on tax equity.
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History and Capping of SALT Deduction
- State and local taxes became federally deductible with the federal income tax in 1913.
- The SALT deduction was unlimited until the 2017 tax law capped it at $10,000 to offset the cost of large tax cuts.
Purpose Behind SALT Cap in 2017
- The 2017 SALT cap limited itemized deductions to fund doubling the standard deduction.
- This aimed to simplify filing and help most taxpayers while reducing overall tax revenue loss.
Long Island Taxpayer's Rising Burden
- Anne-Marie from Long Island shared how her taxes keep rising despite property tax caps.
- She expressed concern that her federal tax burden increased with SALT deduction limits.