Senate Majority Leader Chuck Schumer announced Tuesday at the Democratic National Convention (DNC) that he plans to end the cap on state and local tax (SALT) deductions, a move that would primarily benefit high- income residents in blue states. Schumer vowed that as long as he remains leader, the SALT cap will not be extended beyond its 2025 expiration date, stating, “We Democrats, as long as I’m leader, when state and local deductibility expires, it will be gone.”
The SALT deduction allows taxpayers to lower their federal tax burden by deducting certain state and local taxes. The $10,000 cap — introduced by Republicans in the 2017 Tax Cuts and Jobs Act — has disproportionately impacted residents in high-tax states like New York, New Jersey, and California, which are predominantly Democratic. Removing this cap is a priority for wealthy filers in these states, who would see significant reductions in their federal tax bills.