Senate Majority Leader Chuck Schumer pledged at the Democratic National Convention (DNC) on Tuesday to remove the cap on state and local tax (SALT) deductions, a move that would provide significant relief to high-income residents in blue states. Schumer made it clear that he will fight to ensure the SALT cap does not extend beyond its 2025 expiration date, saying, “We Democrats, as long as I’m leader, when state and local deductibility expires, it will be gone.”
The SALT deduction allows taxpayers to lower their federal tax liability by deducting state and local taxes. The $10,000 cap — imposed under the 2017 Tax Cuts and Jobs Act — has disproportionately impacted residents in states like New York, New Jersey, and California, where local taxes are highest. Removing the cap has become a key issue for Democrats representing these states, who argue that the current limits unfairly target their constituents.
Schumer highlighted Long Island as an area where the SALT cap is a pressing issue, noting its importance in the upcoming elections. With several swing districts in the region, local voters could determine the balance of power in the House. By promising to lift the SALT cap, Schumer is appealing to wealthy voters who have been burdened by the cap since its introduction.
Vice President Kamala Harris’ campaign has expressed support for removing the cap and has also proposed raising the corporate tax rate back to 28%, reversing key components of Trump-era tax cuts.
The SALT deduction debate is expected to be a central issue as both parties prepare for the 2024 elections.
