by Mitch Kokai
Senior Political Analyst, John Locke Foundation
As part of the Tax Cuts and Jobs Act of 2017, Republicans capped the state and local tax (SALT) deduction at $10,000. This was an important provision as it helped offset revenue losses in the least harmful way possible. Most tax-reform advocates recognize that the SALT deduction is wasteful, inefficient, and regressive. This is why Reagan tried to eliminate it as part of the 1986 tax reforms. Nonpartisan advocates of tax reform should be celebrating Republicans’ recent success in chipping away at it.
This has not stopped some Democratic partisans from framing the SALT-deduction cap as part of a sinister plan to punish blue states. …
… Journalists, pundits, and think-tank fellows continue to perpetuate the myth that only partisanship could motivate Congress to curtail the SALT deduction. The reality is that the SALT-deduction cap affects New York and California more than Mississippi and West Virginia because the former are rich while the latter are poor.