Eliminating Tax Deductions Hurts All 50 States
President Trump and Senate Republicans’ tax proposal threatens to take the state and local tax deduction (SALT) away from over . State and local deductions are not a partisan issue—both red and blue state families use them to save hard-earned money on their federal tax returns. The SALT deduction ensures Americans are not taxed twice on the same income. These deductions include write-offs for state sales, income, and property taxes. By eliminating the deduction, working Americans will face tax hikes costing hundreds or even thousands of dollars.
Families across the nation enjoy much needed tax relief from state and local tax deductions. In New Mexico, losing the SALT deduction would cost the average taxpayer a deduction worth more than $7,000, resulting in a tax hike of nearly $900.
Many who use the SALT deduction come from working families. In Ohio, more than 800,000 households making less than $100,000 claim state deductions. In Alaska, more than one-third of SALT deductions benefit those making less than $100,000. The SALT deduction prevents working families from getting taxed on their earnings twice, putting more money in their pockets to invest in the economy and fuel growth.
The SALT deduction also reduces the cost of home ownership, by allowing for the deduction of property taxes. Removing the deduction would increase the cost of owning a home, which could have a substantial impact on the housing market. Similar Republican tax proposals have been estimated to cause drops in housing prices of more than 10 percent.