Prior to passage of Donald Trump’s 2017 tax package, there was no limit on the amount of state and local taxes Americans could deduct from their federal returns. For people in high-tax states like New York, New Jersey, and California—especially well-off homeowners whose property taxes alone can run into the tens of thousands of dollars—this was a pretty sweet deal, since the write-off could significantly reduce the amount of federal taxes they owed. But there was never any denying that the so-called SALT benefit disproportionately benefited people of means. According to the Brookings Institution, it helped the richest Americans save thousands of dollars in annual federal taxes, while gifting the typical “middle-class” homeowner a reduction of just $27. In 2017, taxpayers making more than $200,000 received 70 percent of SALT benefits, while the top 1 percent of earners got more than half.
This is one of the reasons why some tax experts advocated revising or even eliminating the SALT provision. That most of its beneficiaries resided in coastal states that went for Hillary Clinton in 2016 was excuse enough for Trump—bent on petty revenge—to target it in his tax bill. Congressional Republicans, meanwhile, needed something they could point to as offsetting the plan’s massive giveaways to corporations and the wealthy, never mind the mathematical impossibility of that. And so the SALT benefit was capped at $10,000, one unobjectionable provision—notwithstanding the vindictiveness and cynicism that fostered it—in an otherwise unabashedly pro-rich piece of legislation.