Amid all of the rapid-fire tax proposals during election season, I missed one that would affect us: Trump flip flopping on his own SALT (State & Local Tax) deduction cap.
When they put together the Tax Cut & Jobs Act (Trump Tax Cut), during his first term, Trump supported capping the deductibility of SALT at $10,000 annually. At the time, it was viewed as a “punishment” for high-tax blue states, like our home state of Minnesota.
Related: CBS: Trump Reversal On SALT Deduction
Our state income and property taxes have certainly far exceed the $10K cap over the last 7 years. At the time the cap went into effect, I estimated that virtually all of the benefit of Trump Tax Cut to us were largely offset by the SALT Deduction.
Related: GOP Tax Reform – Not So Big Savings in MN
Now it seems that even red states politicians were pushing Trump to get rid of the cap. Along with no tax on Social Security, overtime, or tips.
Please don’t ask me to defend how all of these tax cuts make sense relative to government spending or our $35T national debt. All I know is that none of the math adds up and voters never seem to care.
Will you be positively impacted by an elimination of the SALT Deduction Cap?
Image: Pixabay
MrFireStation 
Before Trump’s tax code, I paid Alternative Minimum Tax which stripped out the State and Local Taxes. I ended up slightly lower because of the lower rates. The 20% Deduction for Small Business and REITs saves me quite a bit. My wife is starting Social Security next year. Because this is incremental income on top of our retirement income it will be highly taxed. Not having to pay taxes on 100% of Social Security would mean getting to keep 32.5% more.
From the news I have been watching, it sounds like Trump is not planning business-as-usual and plans to restructure the Federal Government like a business would. He had a recent talk about a bill of rights for education, and said he planned to shut down the US Department of Education. The US Department of Education was created during the Carter Administration, and has been a failure in terms of test scores reducing every year. If Carter could start it, why can’t Trump end it? This is surely the tip of the iceberg.
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Agree – he is being much more aggressive in announcing his plans than Trump 1.0. Libertarians have called for the end of the Department of Education since it was established. I’m fine with ending it – the states & school district can easily handle.
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