No.  I’m not talking about table salt.  Nor am I talking about rock salt used for melting ice.  I’m talking about the “State and Local Tax” deduction on personal income taxes.  The acronym is SALT.

We heard a lot of talk from Harris during the 2024 Presidential election campaign about Trump’s “tax cuts for the wealthy”.  The Tax Cut and Jobs Act (TCJA) was passed in 2017.  Most of the provisions of this bill are set to expire in 2025, meaning they will not be in place for tax year 2026.  I will not take a deep dive into tax matters here.  Most discussions about taxes are very boring.

Many of the changes in the TCJA affected itemized deductions.  The standard deduction was doubled for single taxpayers and married taxpayers filing jointly.  The standard deduction for the Head of Household status was raised by a little more than 88%.  

Generally, lower income households take the standard deduction.  A tax return that does not itemize deductions is simpler and less costly to file.

Taxpayers who itemize also experienced a couple of meaningful limitations on mortgage interest deductions.  Who tends to have a lot of mortgage interest?  Not low income households. 

However, the real issue that has Democrats up in arms is SALT.  You will hear a lot about SALT in 2025.  It is the itemized deduction for State and Local Income Tax.  That particular deduction was capped at $10,000 by the TCJA for every filing status.  Taxpayers can take a deduction for either sales taxes or income taxes, as well as for personal property taxes, real property taxes and local earnings taxes.

Think along with me.  What states tend to have very high taxes?  What cities tend to have local earnings taxes?  Also, do high income households tend to pay a lot more in taxes?  The TCJA was hardly a boondoggle for wealthy households. 

Even Republicans in states like New York will hold any extension of TCJA provisions hostage over SALT.  It should be an interesting show.