Madison Ventures Plus managing director Mitch Roschelle explains how Trump’s promise to renew the state and local tax deduction will affect the real estate market, in Varney & Co.
Former President Trump suggested this week that if he returns to the White House he will end the $10,000 deduction for state and local taxes (SALT), which was implemented as part of his signature 2017 tax reforms.
Speaking to New York voters ahead of his Long Island rally on Wednesday, the Republican nominee posted on his Truth Social platform that he would reform the state, vowing to “bring back SALT, reduce SALT.” [t]axes, and many more.”
Former president and Republican presidential candidate Donald Trump addresses a crowd during a campaign rally in Uniondale, New York, on September 18, 2024. (DAVID DEE DELGADO/AFP via Getty Images/Getty Images)
Before Republicans passed the SALT deduction as part of the 2017 Tax Cuts and Jobs Act, taxpayers could freely deduct their state and local taxes from their federal taxes, helping them pay off some of their debt. Many critics argue that the deduction disproportionately benefited wealthy homeowners in high-tax states, such as New York, California and New Jersey.
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But there has been a growing chorus of advocates who say the cap hurts middle-class homeowners who live in states with high property taxes. They also criticized the limit as a “marriage penalty” because it is the same for single and joint filers.
The US Capitol in Washington, DC, on Jan. 17, 2024. (Photographer: Julia Nikhinson/Bloomberg via Getty Images/Getty Images)
Congress briefly decided to end the SALT cap earlier this year, but the effort failed. The cap is set to sunset at the end of 2025.
Madison Ventures Plus managing director Mitch Roschelle told FOX Business’ “Varney & Co.” that restoring the SALT deduction would help states with high green taxes like New York, New Jersey, Illinois and California “because people were fleeing those states … because of the lack of capacity to extract.”
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Roschelle noted that property taxes are included in the SALT deduction, and said eliminating the cap would be “a game changer to help blue counties, with their lack of housing demand in other areas.”
But economist EJ Antoni, a researcher at the conservative think tank The Heritage Foundation, disagrees that repealing the SALT deduction is a good policy.
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“This is an economically inefficient deduction that we have within the tax code, and we commend President Trump, when he signed the tax reforms under his first administration, when they actually put that limit in place,” Antoni told “Varney & Co.”
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“Let’s not forget that this deduction only reaches the highest income earners in the highest tax states,” he said. “By eliminating that cap, again, you’re going to go back to a situation where the whole country helps pay taxes for the highest earners, and in very few places.”
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