[1] The deduction disproportionately benefits wealthy and upper-middle class taxpayers living in areas with comparatively high state and property taxes.
[2][3][4] The Tax Cuts and Jobs Act of 2017 signed into law by President Donald Trump put a $10,000 cap on the SALT deduction for the years 2018–2025.
[5] The Tax Policy Center estimated in 2016 that fully eliminating the SALT deduction would increase federal revenue by nearly $1.3 trillion over 10 years.
The Tax Cuts and Jobs Act of 2017 capped the use of this itemized deduction at $10,000 ($5,000 for married persons who file separately).
[11] The SALT deduction primarily benefits those in high-tax states, which tend to be those with consistent Democratic legislative majorities.
In 2016, the ten counties with the largest SALT deductions per filer (on average) were in New York, California, Connecticut and New Jersey.
Economic modeling by economists Gilbert E. Metcalf and Martin Feldstein suggests that eliminating the SALT deduction would have "little if any impact on state and local spending".
[17] To help fund the Civil War effort, President Abraham Lincoln signed the Revenue Act of 1862, which established a temporary income tax.
[17] Amid the 1970s energy crisis, Congress passed the Revenue Act of 1978, which eliminated the deduction for state and local taxes on gasoline and motor vehicle fuel.
[27] In January 2018, the states of New York, New Jersey and Connecticut (whose wealthy residents benefit disproportionately from the SALT deduction) sued the federal government over the constitutionality of the SALT cap, arguing that it unfairly restricts their ability to pursue their own preferred tax policies.
Jared Golden was the only Democrat to vote against the act, because of his opposition to benefiting high-income taxpayers by raising the cap.