With negotiations fast tracked over a Republican plan to pass a $4.5 trillion tax cut, a top economic official in President Donald Trump’s orbit — former economic adviser Stephen Moore — doubled down Thursday on doubling or even tripling the current $10,000 cap on state and local property tax deductions.
That’s opposed to the outright repeal that Trump promised on the campaign trail last year.
As president the first time around, Trump signed a sweeping tax law in 2017 that limited SALT deductions on federal income tax returns to $10,000, a move that critics say targeted Democratic-leaning states with high state income and property taxes, including New Jersey, New York, Connecticut and California.
“I will turn it around, get SALT back, lower your taxes, and so much more,” Trump said during the recent campaign on his social media platform, Truth Social.
But a full repeal of the cap would be too expensive, Moore told NorthJersey.com in a Thursday morning interview, while raising the cap to as high as $100,000 — as some have proposed — would only benefit the wealthiest Americans.
“There’s no rationale for why people should be able to deduct their state and local taxes,” Moore said. “If you don’t like local taxes, go to Trenton, don’t go to Washington, D.C.”
Later in the morning at a panel hosted by the conservative think tank Garden State Initiative and the Commerce and Industry Association of New Jersey, Moore told the crowd that “we can’t pass this [tax] bill without [being] near-unanimous” in yes votes, given the Republicans’ narrow majority in both chambers of Congress.
Press representatives for Speaker of the House Mike Johnson and Majority Leader John Thune did not return emails Thursday morning seeking comment. White House spokesperson Harrison Fields declined to comment for this story.
The current $10,000 cap on the deduction is slated to expire at the end of 2025, along with a slew of other tax cuts and provisions of the 2017 landmark law.
A proposal to increase the cap from $10,000 to $20,000 would cost the U.S. government between $22 billion and $197 billion over a 10-year period, according to the University of Pennsylvania’s Wharton School. That assumes the $20,000 deduction is limited to married filers making up to $500,000 a year.
New Jersey’s average property tax bill broke past $10,000 in 2024, according to figures from the state Department of Community Affairs.
The average property tax bill in some New Jersey towns in 2024 was more than double the $10,000 SALT deduction limit, including Demarest at $24,736, Montclair at $21,631 and Tenafly at $23,833.
“If it gets lifted to $20,000, that’s really going to be inclusive to a lot more places,” said Marc Pfeiffer, a senior policy fellow at Rutgers University’s Bloustein School of Planning and Public Policy, who studies local government in New Jersey.
What comes after the cap expires?
Moore said he expects a tax bill on Trump’s desk as soon as Memorial Day weekend, but did not discuss specifics on Thursday.
Democrats, such as Rep. Josh Gottheimer — a candidate for New Jersey governor whose North Jersey district includes affluent and high-tax New Jersey communities — has proposed entirely repealing the cap.
Rep. Mikie Sherrill, another Democrat running for New Jersey governor, proposed repealing the SALT cap for “99% of families,” with a deduction raised to $100,000 for single filers or $200,000 for married couples filing jointly. The Wharton School projected a $134 billion price tag for such a proposal.
New Jersey’s congressional Republicans have also proposed raising, but not repealing, the cap.
“While I agree that we cannot have a system offering tax deductions in the hundreds of thousands of dollars annually, we can adjust the current caps to a more reasonable level,” Rep. Jeff Van Drew, a Republican from South Jersey, said in January.
He said in an emailed statement in February that he wants “full restoration of the SALT deduction.”
SALT deduction: Tax relief or a tax break for the wealthy?
Progressives, including Sen. Bernie Sanders, a Vermont independent who caucuses with Democrats, have decried the SALT deduction as a tax break for the wealthy.
Most of the tax relief from lifting the SALT cap, for instance, would go to households earning between $200,000 and $500,000, according to a report last February from the Tax Foundation, a center-right think tank in New York City.
The nonpartisan Committee for a Responsible Federal Budget said the proposed repeal of the $10,000 SALT cap “would be costly, distortionary, and regressive.”
Defenders of the SALT deduction argue that most of those who benefit are middle-income homeowners, even if the largest individual savings would go to the wealthiest.
New Jersey’s average SALT deduction in 2016 was just over $18,000, and the largest group filing a claim earned between $100,000 and $200,000 a year, according to a National Association of Realtors report. That group on average had a SALT deduction of $15,003.
Those who earned $1 million or more had an average SALT deduction of $307,736.
And the progressive Institute on Taxation and Economic Policy said in 2021 that 80% of the 1.9 million New Jersey residents who would see a benefit from a removal of the cap had average incomes of up to $216,000.
Most of the tax increases from restricting the SALT deductiohttp://www.youtube.com/n affected “cops, firefighters and teachers,” Gottheimer said in an interview last year.
“This is a middle-class issue,” he added.