Hacker News Reader

Comment by dpweb | Hacker News Reader

Not so much. Average house in Illinois about 350k. At that you pay about 10k property tax. Salt limit reached.

You have to forego the standard deduction if you want to itemize And take advantage of SALT deductions. Which means you have to owe more federal income tax than $12.5k for single filers and $25.1k for married filers.

This link goes into more detail:

https://www.pgpf.org/blog/2021/07/what-is-the-salt-cap-and-w...

Yeah, but that was just the property tax — the SALT cap applies to the total state and local taxes.

Tack on the 5% income tax rate, and you'll hit the cap pretty easily. For example, a single person making any amount (with that property tax amount) will hit the cap. Ditto for a couple each making $145k.

And they still have $10k of SALT to deduct. The more you increase the cap, the more it benefits richer people (on a nationwide perspective).

There are a handful of states with extremely high taxes (IL/NJ/CT/CA/NY/MD/etc), but they are solidly Democrat. I do not envision the other Democrat states who would not benefit from SALT cap increases to care about going out on a limb for them.

I'm no expert, but I would imagine this would be part of a larger package that would have plenty of goodies for other D-leaning states. You don't have to convince folks in Louisiana that SALT cap removal is in their best interest — you just package it up in a bill large enough to get a big enough coalition of supporters.

Which is what Dems tried with the Build Back Better bill, but Repubs were able to successfully pit Democrat vs Democrat because increasing the SALT caps is easy to advertise as decreasing taxes for the rich.

This is a great article summarizing what I am trying to say.

https://thehill.com/homenews/senate/591378-salt-change-likel...

> Critics grumble that raising the cap on SALT deductions runs counter to what they say is the main political rationale for passing the legislation: addressing wealth inequality.

Repubs really put Dems in a bad spot with this one.

Reply on news.ycombinator.com