State and Local Tax (SALT) Deductions at a Glance

The Golden Gate Bridge in San Francisco, day time
The Golden Gate Bridge in San Francisco, day time

Why the Federal Government Should Eliminate SALT Deductions on Federal Taxes

  • The state and local tax deduction forces fiscally responsible states to subsidize the mismanagement of high tax-and-spend states.
  • Under the SALT deduction, taxpayers and job creators in lower-tax states pay a higher federal income tax rate than their high-taxed counterparts, because their state and local taxes make up smaller deductions from their federal taxes than those in higher-taxed states.
  • Abolishing the SALT deduction would force residents to take a much closer look at their state and local tax rates.
  • Especially in the highest taxed states, the loss of the deduction will increase community demands for more responsible management of government resources.
  • Maintaining the deduction encourages government overspending and taxation; eliminating the deduction in exchange for lower tax rates spurs growth.
  • Eliminating the SALT deduction will benefit all Americans —wealthy and poor alike—by incentivizing the investments in business enterprises and technology needed to accelerate national economic growth.