Days after meeting with wealthy donors in Beverly Hills and the Bay Area, former President Trump said that if re-elected, he would restore a tax break that benefits residents of high-tax states like California.
A cap on the federal tax deduction for state and local taxes, or SALT, was a controversial part of Trump's 2017 tax overhaul in states with high taxes and property values, such as California, New Jersey and New York, where the former president is scheduled to meet with supporters on Wednesday.
“I will turn things around, bring back SALT, cut your taxes and much more,” Trump wrote Tuesday on Truth Social, his social media platform. “I will work with the Democrat Governor and Mayor and make sure there is funding to get New York back to safe levels.” [it] “I haven’t seen him in 50 years.”
Eliminating the cap is one of several tax proposals the former president has made recently, including not taxing Social Security, tips and overtime earnings of certain workers.
The SALT proposal is unlikely to dramatically change presidential votes in the heavily Democratic states most affected by the $10,000 deduction limit, but it could be a factor in critical congressional races in places like Orange County and Long Island that will determine which party controls the House of Representatives.
“Donald Trump took away your SALT [deductions] “And he hurt so many Long Island families,” Senate Majority Leader Charles E. Schumer (D-N.Y.) wrote in response to Trump’s post on X. “Now he comes to Long Island to pretend he supports SALT. It won’t work.”
The removal of the cap would also please the former president's donors. On September 12, Trump headlined a fundraising event in Beverly Hills, where the most expensive tickets cost $250,000 per person.
Trump’s 2017 tax law cut corporate taxes and lowered personal rates while limiting previously unlimited state and local tax deductions. It immediately sparked controversy in parts of the country with high real estate values and created strange alliances between Republican and Democratic lawmakers in those states.
Nearly two-thirds of the benefit from repealing the cap would go to the richest 1% of taxpayers, according to an analysis by the left-leaning Institute on Taxation and Economic Policy.
Still, many of those affected by the cap, including in California, are middle-class workers. In 2015, more than 6 million Californians claimed the deduction, reducing their federal taxable income by an average of $18,438, according to the Urban-Brookings Tax Policy Center.
The SALT cap is “a gesture of legislative disdain toward middle-class families in our community,” said Rep. Mike Garcia (R-Santa Clarita) at a town hall meeting in his district in August. “It’s penalizing Democratic states, which is where I live.”
Garcia's race against Democrat George Whitesides to represent northern Los Angeles County will be crucial in determining whether Republicans maintain their narrow majority in the House.
Whitesides said on his campaign website that he supports expanding the SALT deduction.
For years, Garcia has said repealing the deduction cap is a top priority. He is vice chair of the House SALT Caucus, a bipartisan group that opposes the cap. Other California members include Reps. Young Kim (R-Anaheim Hills), Anna Eshoo (D-Menlo Park), Katie Porter (D-Irvine), Jimmy Panetta (D-Carmel Valley Village), Julia Brownley (D-Westlake Village), Judy Chu (D-Monterey Park), Ted Lieu (D-Torrance), Jimmy Gomez (D-Los Angeles) and Michelle Steel (R-Seal Beach).
Garcia praised Trump’s 2017 tax overhaul, saying it was a “pro-growth bill” that benefited families. But he said the cap on state and local tax deductions “reeked to us as Californians and New Yorkers,” even though it was put in place “to pay for some of those things.”
In 2021 and 2023, Garcia introduced the SALT Fairness Act, which sought to eliminate the cap entirely. Neither version made it out of the House Ways and Means Committee. Panetta and Steel co-sponsored the legislation in 2021.
Trump has flirted with the idea of eliminating the cap before, said Rep. Josh Gottheimer (D-N.J.).
“President Trump gutted SALT and raised taxes on hard-working, middle-class Jersey families,” Gottheimer wrote on X on Tuesday. “Now he wants to fix the problem he caused? And without giving details? He sounds like the arsonist who volunteers for the fire department.”
