off the charts
POLICY INSIGHT
BEYOND THE NUMBERS

You are here

House District Map: Partial SALT Repeal Kills Most Valuable Part of Deduction

December 5, 2017 at 4:00 PM

The part of the federal income tax deduction for state and local taxes (SALT) that’s most valuable to taxpayers in 77 percent of House districts — not just those with relatively high taxes — is the deduction for state and local income or sales taxes. Yet that’s exactly the part of SALT that both the House- and Senate-passed tax bills would eliminate.

The SALT deduction lets taxpayers deduct their state and local income or sales taxes, whichever are greater, and their state and local property taxes. The House and Senate tax bills both fully eliminate SALT deductions for income or sales taxes, and cap the deduction for property taxes at $10,000. And they would put the resulting revenues towards tax rate cuts heavily tilted to the wealthy — a bad deal for most Americans.

Some lawmakers, such as House Majority Leader Kevin McCarthy, have said that restoring part of the income tax deduction is needed to help “fix” the harm to California. But the interactive map below, with data for each House district, makes clear that this is far from just a California issue.  The income or sales tax deduction accounts for more than half of the total dollar amount of SALT deductions in 337 House districts (77 percent of all districts), and more than 70 percent of SALT deductions in 102 House districts (23 percent of all districts).

 

 

(Our state-by-state interactive map here shows that the income or sales tax deduction accounts for more than half of the total dollar amount of SALT deductions in 41 states, and more than 70 percent of SALT deductions in 16 states.)  

As we’ve explained, retaining a limited SALT deduction for property taxes does little to protect state budgets from the strain that fully repealing SALT would produce. Thus, eliminating the income or sales tax deduction would likely lead over time to cuts in state funding for schools, health care, and other services on which middle- and lower-income families rely.


SHARE