Did you bother to look?
Trump Dangles Tax Relief to Blue-State Voters. His Supporters Cheer.
When he was president, Trump capped a popular tax deduction. Now he is vowing to restore it.
At
Donald Trump’s rally Wednesday night, the candidate promised to “cut taxes for families, small businesses and workers.” But the applause and cheers came after Trump
pledged to restore the SALT deduction, a piece of tax policy with a singular power to stir passions in this part of the country.
The provision on SALT, shorthand for state and local taxes, allows taxpayers who itemize their deductions to subtract what they paid in local taxes from their federal tax returns. For some high-income taxpayers, and for homeowners in states with steep property taxes, the SALT deduction is a big break. When Trump was president, Republicans passed legislation capping the deduction at $10,000. On social media and in his speech Wednesday, Trump signaled he wants to take the cap off SALT.
It was no accident Trump raised the topic at a rally in the Nassau Coliseum on Long Island. Removing the SALT cap is popular among New Yorkers and voters in Connecticut and New Jersey, Democratic states where residents pay high taxes.
Trump
isn’t likely to win in blue states, but the SALT talk allows him to bolster his pitch as the champion of working families as he bashes Vice President
Kamala Harris over President Biden’s economic record. It could also energize Republicans in several close House elections.
Trump’s New York supporters, who packed the arena, weren’t bothered by his apparent reversal.
“That’s icing on the cake for why I would vote for him,” said Kristen Glynn, a 39-year-old hair stylist who owns a house on Long Island and stood in line to see the former president Wednesday night. She estimated that she paid around $26,000 in state and local taxes last year.
Kristen Glynn, right, with Chantel O’Shea, worries her tax dollars are supporting undocumented immigrants. Photo: Katherine Hamilton/WSJ
Glynn said she doesn’t mind paying extra taxes if it directly benefits her through infrastructure or education, but she worries her tax dollars are supporting undocumented immigrants instead. She was aware that the SALT cap was a Trump policy, but she still believes his policies will help keep tax dollars directed toward causes she cares about.
“He took it away because he’s like, ‘Eff them, they’re a blue state,’ which I totally appreciate even though I live here,” she said.
The 2017 cap on SALT was passed by Republicans as part of the tax law that cut individual tax rates, increased the standard deduction and expanded the child tax credit. It helped make the arithmetic work for the Republican tax law, providing revenue that covered part of the cost of tax cuts.
Many people limited by the cap still got net tax cuts. But the cap has proved politically troublesome for Republicans in New York and New Jersey, where homeowners could easily see that their annual property tax bills exceeded $10,000, even before including state income taxes.
A crowd waited to get inside the arena where former President Donald Trump spoke Wednesday evening. Photo: Alex Brandon/Associated Press
Lawmakers who favor the cap argue that a full deduction for state taxes effectively forces residents of low-tax states to subsidize larger state governments in New York and New Jersey. But those states could provide the winning margin in the House. Democrats took the majority in 2018 with strong showings in New York, New Jersey and California—partly because of SALT, partly because of the broader suburban revolt against Trump.
Now, SALT cap opponents in both parties see a chance for leverage next year, with the limit and much of
the rest of the tax law scheduled to expire.
“For Donald Trump to pretend he’s found religion on eliminating the SALT caps—two months before an election, speaking in Long Island—is comical, it’s unserious, and it shows the lack of integrity that this man has,” said Senate Majority Leader Charles Schumer (D., N.Y.). “I’ll do everything in my power so that when these caps expire at the end of next year they will not come back.”
Greg Smithe, a Republican from Connecticut, is in favor of Trump’s seemingly new position on the issue. But he also said he thought the issue wasn’t nearly enough to sway voters in Connecticut who would benefit with the cap’s removal and agree with Trump’s move, but otherwise oppose him.
“I think you have a small piece of people who are upper middle class and vote for Republicans. But the others who are filthy rich can afford to pay the tax and vote Democrat,” said Smithe, 44.
Sitting outside with a salad in downtown Westport, Conn., on Wednesday, attorney Pamela Dale said that while she would personally benefit from a rollback of the state and local tax-deduction cap, she isn’t holding her breath.
“I think it’s pathetic that at the 11th hour he’s coming up with all these new tax cuts to try to entice people to vote for him,” Dale said about Trump. “This guy will promise anything right now. He’ll promise the moon. But the way our government works is, you need a Senate and you need a Congress to pass tax cuts.”
Dale said she is supporting Harris in the November election, and the possibility of a lower tax bill wouldn’t change her vote. Harris, as a senator, co-sponsored a bill to repeal the cap and raise tax rates on top earners.
“I’m very hopeful that the country is focused on bigger issues anyway and not just financial issues that would benefit the top 1%,” Dale said, “but issues that would benefit mostly the women of this country and reproductive healthcare and choice.”
Andy Hibbert, 46, said that “with property taxes always kind of inching up,” a repeal of the SALT cap would be welcome on his wallet. But he questioned how the government would make up the shortfall in revenue that would result from the tax cut.
“Spending is out of control. The deficit is out of control,” said Hibbert, who lives in Fairfield, Conn., and works in finance. “It’s not sustainable. We’re going to just keep passing this on to our kids and our grandkids and everyone else, and at some point it’s going to come home and it’s going to bite us.”
Some supporters of former President Donald Trump waited hours for the rally to start. Photo: Michael M. Santiago/Getty Images
Hibbert declined to say which candidate he plans to vote for in November. But he said Trump’s latest tax-cut proposal wouldn’t affect his decision.
“Whatever side of the aisle you’re on, at the end of the day this stuff has to get paid for somehow,” he said.
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