How SALT Cap Deduction Changed State Tax Behavior

In this episode of The Tax Policy Podcast, Lucas and Luna explore how the $10,000 limit on state and local tax (SALT) deductions, introduced by the Tax Cuts and Jobs Act, has reshaped state tax policy and individual behavior through mid-2026. They examine how high-tax states like New York, California, and New Jersey responded with workarounds such as charitable contribution funds and payroll tax shifts, only to see the IRS crack down. The hosts also discuss migration patterns: IRS data shows net outflows from high-SALT states accelerating after 2017, with Florida and Texas gaining more than 300,000 tax filers since 2018. They dig into the economic trade-offs—states losing high-income residents face slower revenue growth, while low-tax states struggle with infrastructure strain. Lucas and Luna also touch on the political debate, including recent proposals to raise or repeal the cap. This episode offers a clear, data-driven look at how one deduction limit has cascading effects on state budgets, housing markets, and where people choose to live. #SALTcap #TaxCutsAndJobsAct #StateTaxPolicy #MigrationPatterns #NewYork #California #NewJersey #Florida #Texas #IRS #TaxDeductions #FiscalFederalism #Economics #FexingoBusiness #BusinessPodcast #TaxPolicy #WealthMigration #StateBudgets Keep every episode free: buymeacoffee.com/fexingo