SALT Cap Battle: Who Wins and Why It’s Divisive

SALT Cap Battle: Who Wins and Why It’s Divisive

Blog Article

The SALT deduction cap increase to $40,000 has sparked a divisive battle, offering tax relief to some while raising concerns about fairness in the 2025 tax bill.

Who Wins?

High-tax state residents, particularly in New York and California, would benefit from larger deductions, especially those earning up to $500,000. Middle-class homeowners could see relief.

Who Loses?

Low-tax state taxpayers, who rarely itemize, gain little. The $334 billion revenue loss could strain federal services, and critics argue it favors high earners.

Why It’s Divisive

The SALT cap, a 2017 policy, has pitted blue-state and red-state lawmakers against each other. Senate amendments could reshape tax policy and regional equity.

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