How SALT Cap Deduction Changed State Tax Behavior

Episode 85 of The Tax Policy Podcast explores the State and Local Tax (SALT) deduction cap enacted in the 2017 Tax Cuts and Jobs Act. Hosts Lucas and Luna examine how the $10,000 limit on itemizing state and local taxes reshaped fiscal policy in high-tax states like New York, California, and New Jersey. They discuss the 'workaround' strategies states adopted—such as charitable contribution credits and pass-through entity taxes—and whether those efforts have held up under IRS scrutiny. The episode also looks at the political fight over lifting the cap, which expired after 2025, and what the current landscape looks like in mid-2026. With specific data on taxpayer migration patterns and state revenue impacts, this episode gives listeners a concrete understanding of how one tax provision can ripple through federalism, housing markets, and state budgets. #SALT #TaxCutsAndJobsAct #StateAndLocalTax #DeductionCap #HighTaxStates #NewYork #California #NewJersey #PassThroughEntityTax #CharitableContributionCredit #IRS #TaxPolicy #Federalism #Economics #TaxReform #FexingoBusiness #BusinessPodcast #TheTaxPolicyPodcast Keep every episode free: buymeacoffee.com/fexingo