Trump Advisers Consider Raising SALT Write-Off Limit to $20,000

Published On Dec 12, 2024, 12:43 PM

Trump's economic advisers are discussing increasing the state and local tax (SALT) deduction cap from $10,000 to $20,000. This tax break is crucial for residents in high-tax states such as New York, New Jersey, and California. The proposal aims to help middle-class families in these areas, although debates continue about whether this deduction should be limited or expanded. Changes to SALT would require congressional approval, and lawmakers expect discussions on this issue to intensify next year as the current SALT cap is set to expire in 2025.

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Stock Forecasts

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Positive

If the SALT cap is increased as proposed, it could lead to higher disposable income for residents in high-tax states, which may drive consumer spending in these regions. Companies operating in or heavily relying on these markets might see positive gains.

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Positive

In states where the SALT deductions significantly impact taxpayers, particularly the wealthier demographic, the anticipation of increased deductions could lead to increased investments in local services and real estate, positively affecting local markets and ETFs focusing on real estate or regional growth.

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