“ I will turn it around , get SALT back , lower your taxes , and so much more ,” Trump said on Truth Social , his social media platform .

The cap has been in place since Trump ’ s first term as president , when he signed sweeping tax cuts into law in 2017 . The same law limited SALT deductions to $ 10,000 . Pundits alleged the cap targeted Democratic-leaning states with high state income and property taxes , including New Jersey , New York , Oregon , Connecticut and California .

Now that Trump has won his second term in the White House by defeating Vice President Kamala Harris , both investors and advisors in high-tax states are wondering if the president-elect will follow through on his promise .

Two national practice executives in the Washington , D . C ., offices of tax consulting giant Deloitte , Jon Traub and Anna Taylor , spoke about the matter in a mid-November post-election webcast for the media . They believed Trump and his surrogates would work to increase the SALT cap as they fast-tracked a bill to extend the 2017 tax cuts , which expire at the end of 2025 . At the same time , the president-elect ’ s other tax promises — he said he would remove taxes on tips and overtime and make Social Security benefits tax-free — will have to be factored in , said Traub , the leader of Deloitte ’ s Tax Policy Group .

“ I don ’ t think we solve this [ Tax Cuts and Jobs Act ] extension without dealing with SALT in some way , and given the narrow margins in the House , I think it ’ s almost impossible that you don ’ t see members demanding something higher than a $ 10,000 cap ,” Traub said .

“ There is very little doubt there in my mind that a small group of Republicans who want a more generous SALT cap will band together in the House and say , ‘ We will not vote for a $ 10,000 SALT cap .’ The question then becomes how much SALT will they demand , because anything over $ 10,000 will be a revenue loser ,” he said .

There is , however , likely to be pushback on the effort from Republicans in low-tax states . The cost of increasing the cap , as well as the way the GOP plans to otherwise get tax cuts over the finish line , will be factors in any cap increase on the deductions . The cost of increasing the cap alone may be one of the biggest impediments and will need to be factored into the overall tax package , said Taylor , a deputy leader in Deloitte ’ s Tax Policy Group .

She said Trump ’ s tax wish list will add trillions of dollars more to a package that ’ s already estimated to cut $ 9.7 trillion from federal revenues over the next 10 years , according to the nonpartisan Committee for a Responsible Federal Budget .

Keeping some of the SALT cap in place and adding tariffs would reduce the cost of the proposed tax cuts , Traub noted . To keep costs down , Trump and congressional leaders are likely to make the tax package “ shorter and skinnier ” to reduce costs , Traub said . “ I ’ m guessing any changes will be for three to five years ,” he said .

To keep costs down , Trump and congressional leaders are likely to make the tax package “ shorter and skinnier ” to reduce costs , Traub said . “ I ’ m guessing any changes will be for three to five years ,” he said .

Procedurally , if Republicans try to get the tax cuts done through budget reconciliation , they will need to decide on a revenue impact up front and then make the policy pieces fit , Traub said . The reconciliation process allows the GOP leadership in the Senate to move forward without getting 60 votes . The Republicans won 53 seats in the Senate , while Democrats have 47 .

“ For all of those reasons , it ’ s not a simple process . It ’ s not an easy process . But I do think they can do a lot of what they want to do on the tax front through this tool [ of reconciliation ],” Taylor said .

— Tracey Longo

DECEMBER 2024 | FINANCIAL ADVISOR MAGAZINE | 13