A Tax Break for Coronavirus-Hit States

The Tax Cuts and Jobs Act of 2017 placed a $10,000 cap on the amount of state and local taxes that taxpayers could deduct from their federal taxable income. The SALT cap effectively raised the taxes of millions of Americans in states like New York, New Jersey, California and Illinois. The most recent census data for 2019 show population declines in these states. The cap has given taxpayers an incentive to flee, costing state and local governments valuable tax revenues at a time when they can ill afford it.

When high earners…

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