WASHINGTON — Donald Trump is stirring the political pot yet again as he promises to reverse the controversial $10,000 cap on federal deductions for state and local taxes, commonly referred to as the SALT cap. This proposal is seen as part of his push for the 2024 election, appealing to coastal donors and suburban voters whose support he desperately needs.
Once eliminated during his presidency, the SALT cap was part of Trump’s 2017 tax overhaul, which critics argue primarily targeted voters from blue states—places like New York and California where taxes are higher. Now, with the upcoming election on the horizon, Trump is claiming he will restore the full deduction if elected.
His campaign officials, aware of the shifting economic landscapes, describe their approach as two-pronged. They aim to promote pro-growth policies and tax positions favoring voters' ability to retain more of their earnings. Caroline Bruckner, director of the Kogod Tax Policy Center at American University, noted the political intricacies behind the SALT cap adjustments, stating, “The change was aimed at targeting revenue flowing to blue states.” She emphasized how higher-income taxpayers from swing states have successfully argued their case to Trump.
While Trump isn’t the only one making waves, Vice President Kamala Harris is also stepping up to the plate with her promises to eliminate taxes on tips for service workers, expand the child tax credit, and offer significant deductions for start-ups. They are both focusing on proposals intended to satisfy different segments of the electorate, particularly those frustrated with rising costs fueled by inflation.
Meanwhile, one of Trump’s more bold approaches includes proposing free in vitro fertilization (IVF) treatments, aimed at appealing to families hoping to conceive. This marks yet another gift for voters during election season, with former Rep. Charlie Dent commenting on the current state of campaign promises, saying, “This is the time of the crazy times, where everything is free.”
Critics are wary of the financial implications of these promises. Each suggestion appears to add to national deficits already eclipsing $35 trillion. Marc Goldwein, from the Committee for a Responsible Federal Budget, pointed out, “Neither candidate is discussing substantial ways to reduce the deficit.” With Trump’s proposed repeal of the SALT cap potentially costing the federal government upwards of $1.2 trillion over the next decade, the stakes are high.
Trump’s relentless pursuit of suburban voters is rooted not just in economic appeals but also electoral strategy. He lost significant ground with these voters during the 2020 elections, particularly around Philadelphia and areas like Maricopa County, Arizona, where his propositions could rightfully attract more support. The average taxpayer who itemizes their deductions there suffers under the existing cap, with many owing state and local taxes far beyond Trump’s imposed limit.
Further complicity awaits. On the other side of the ring, Harris is making headlines through her plans to address wealth disparities by taxing unrealized gains and proposing hefty tax breaks to relieve the financial strain on parents and families. Yet, even supporters like billionaire Mark Cuban have expressed skepticism over these proposals’ viability, indicating potential pushbacks on adjusting capital gains taxation.
While Harris attempts to incrementally build up her agenda via targeted taxation aimed at the wealthiest, her proposals, which mirror President Biden's previous efforts, could meet similar stagnation, raising questions about feasibility. Goldwein highlighted the dissonance between the proposed benefits and the mounting national debt, stressing, “It looks like they’re both going to be in the red.”
Trump's reversal on the SALT cap was not unexpected but did raise eyebrows across party lines due to its historical significance and the advantage it held for blue state voters. It’s possible Trump is banking on the promise of these tax policies to overshadow previous stances, banking on gaining donations through appealing to affluent voters located within these areas.
The candidates' promises are like sweet music intended to resonate with those tired of grappling with everyday expenses—except the neither side seems promising effective fiscal management, which adds skepticism to their appeal. There’s certainly no shortage of promises flying around, but whether any materialize post-election remains to be seen.
Both campaigns are racing against time with each passing day as they work to engage voters through marketing strategies and appealing promises. Yet the most significant question may be whether these plans can translate effectively to both policy change and electoral success. With the clock ticking toward the 2024 election, time will reveal which proposal resonates most convincingly with the electorate.
