The tax reform outline released by Republicans today has been praised by fiscally responsible groups who know this approach will help the middle class get needed relief and make America more competitive
September 27, 2017
What To Know About SALT & How Taxes Will Go Down Under GOP Plan
The tax reform outline released by Republicans today has been praised by fiscally responsible groups who know this approach will help the middle class get needed relief and make America more competitive.
So far, Democrats demonization efforts of this plan have no basis in fact, but another talking point that has gained traction is the claim that the elimination of state and local tax (SALT) deductions will increase the amount some pay in taxes.
While this might make for a popular soundbite, especially among those in high tax states, it’s incorrect when people allege that the elimination of this deduction would increase rates for residents in those states.
This is because the GOP’s plan lowers current rates and also doubles the standard deduction. The savings made up through these two measures will be greater than the elimination of the SALT deduction, meaning that families in states with high state and local rates will still save more of their hard-earned money under this plan.
On top of that, The Tax Foundation notes that the highest beneficiaries of the SALT deduction are upper-income earners, with almost 90 percent of those taking the current deduction having an income of greater than $100,000.
The Tax Foundation: Eliminating the SALT Deduction Under the ‘Big Six’ Plan
The Tax Foundation piece says it best, making the point that the repeal of the SALT deduction “is not happening in a vacuum.” Instead, it is needed to offset revenues that are needed to finance additional tax cuts that will benefit all Americans, and allow those in the middle class to keep more of what they earn at the end of the day.