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Donald Trump is not yet president again, but the news has been full of what he’s a-fixin’ to do. That would be so with any incoming leader, but it’s especially true of such an innervated one.
Among the less titillating bits among Trump’s expansive plans is the desire (his and others’) to extend the Tax Cuts and Jobs Act that was implemented in 2017, during his first term.
The thing I personally hated about that tax cut is that, for me, it wasn’t one. It was an increase. Not by a lot — less than percentage point on my effective rate after the tax preparers did their usual stuff — but more is more.
The reason? SALT. The State and Local Tax deduction. Before the 2017 legislation, taxpayers who itemized their filing could deduct nonfederal taxes they paid — which for most people meant state income taxes and local property taxes, though it could also be sales taxes for those in certain states where that was more beneficial and who wanted to go through a lot of trouble documenting their lives.
After 2017, the SALT deduction was capped at $10,000 (with variables). That just happened to land in the government’s sweet spot for tapping me — I had been deducting about $13,000. That change somehow offset the tax rate reduction and a bit more. (The jobs part of the act’s title, on the other hand, didn’t change anything for me — I was employed before and after.)
That’s always the crux of any political or governance decision, isn’t it — how it affects us personally? If we were all our best selves, we’d put our greatest emphasis on the big picture, but direct impact is hard to ignore.