Trump's 2017 tax reform capped the SALT deduction at $10,000, affecting many homeowners, especially in high-tax regions. However, some states have created loopholes allowing specific business owners to deduct their SALT, saving considerable amounts. Raising the deduction cap could drive homeownership and prices up but may also significantly impact revenue, with estimates suggesting a $530 billion loss over ten years. As the deadline for tax cuts approaches, intensifying debates are occurring around wealthier Americans benefiting, while Republicans grapple with support from business owners and fiscal responsibility.
Trump's 2017 tax revamp capped the SALT deduction at $10,000, impacting homeowners primarily in high-tax states, yet some states allow certain business owners to deduct SALT.
Bloomberg reported that only business owners can exploit the workaround in certain circumstances, meaning that corporations enjoy unlimited SALT deductions under different regulations.
Raising the SALT deduction cap could enhance homeownership attractiveness in high-tax areas, while increasing buyer confidence, but also risk a significant revenue loss.
The Committee for a Responsible Federal Budget estimates that raising the SALT cap would lead to a $530 billion revenue loss over a decade, intensifying debt concerns.
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