Senate Majority Leader Chuck Schumer has committed to removing the cap on state and local tax (SALT) deductions, a move that could primarily benefit wealthy residents in high-tax blue states. Speaking at the Democratic National Convention (DNC) on Tuesday, Schumer emphasized that as long as he holds leadership, the SALT cap will not be extended beyond its scheduled expiration in 2025. “We Democrats, as long as I’m leader, when state and local deductibility expires, it will be gone,” Schumer stated.
The SALT deduction allows taxpayers to reduce their federal tax bills by deducting certain state and local taxes. The $10,000 cap — implemented by Republicans through the 2017 Tax Cuts and Jobs Act — has hit taxpayers in states like New York, New Jersey, and California the hardest, areas where state taxes are typically higher. By lifting the cap, Schumer’s move is seen as an effort to relieve the tax burden on wealthy filers in these regions.
Schumer’s remarks came with an emphasis on Long Island, a politically sensitive area with key swing districts that could determine the balance of power in the House. With local voters feeling the strain of the SALT cap, the issue could be pivotal in the upcoming election.
Vice President Kamala Harris has indicated support for removing the cap while pledging not to raise taxes on those earning under $400,000. The alignment between Schumer and Harris could result in a significant rollback of Trump-era tax policies.
As the SALT debate continues, it remains a crucial issue for voters in high-tax states and a point of contention in the broader national tax policy conversation.
