Trump’s SALT Tax Promise Hinges on an Obscure Loophole

Over the coming months, President Donald Trump and his congressional allies will try to rewrite the nation’s tax laws, with promises of cuts for companies, workers and retirees. There are trillions of dollars on the line with those changes. But a certain segment of Americans will be focused on just one question: How much of their state and local taxes (SALT) will they be allowed to deduct?

Trump’s 2017 tax revamp capped the so-called SALT deduction at $10,000, a significant blow to affluent taxpayers in high-tax states. Many still haven’t gotten over it, a political reality Trump acknowledged while campaigning last year on New York’s Long Island, where he promised to scrap the cap. What many in the Nassau Coliseum audience didn’t know is that some of their wealthy neighbors have been freely deducting their SALT all along. An unintended loophole, which some argue isn’t a loophole at all, delivers about $20 billion a year in tax benefits to a narrow slice of Americans. That’s enough for these SALT workarounds to figure prominently in the complex political and fiscal calculus facing Republicans this year.