The Senate is currently debating President Trump's tax bill, introducing significant changes including a proposed increase of the SALT deduction limit from $10,000 to $40,000. This move has raised concerns among small business owners about the elimination of a state-level SALT deduction workaround. The bill proposes to increase the qualified business income deduction from 20% to 23% and make it permanent, but lawmakers worry about the impact on national debt, with estimates suggesting a $2.4 trillion increase in the deficit due to tax cuts.
The SALT deduction was set at $10,000 after the 2017 Tax Cuts and Jobs Act, causing unrest in high-tax states where residents feel overtaxed.
The proposed increase in the SALT deduction to $40,000 could benefit many business owners, but risks reducing government revenues further complicating the deficit.
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