Rochester, NY – The budget bill passed by Congress raises the SALT deduction cap from $10,000 to $40,000, affecting taxes in New York.
SALT stands for state and local tax, according to George Conboy, Chairman of Brighton Securities.
“SALT very simply stands for state and local tax,” Conboy said.
SALT is the ability to deduct high state income and property taxes when filing federal taxes.
“In a state like Texas or Florida, you have no income tax. Not much to deduct,” Conboy explained. “In New York State, California and a few other states, very high income taxes.”
Berkeley Brean, News10NBC: “And so what does that mean in real money for people?”George Conboy: “So raising that cap from $10,000 to $40,000, let’s say you could deduct $15,000 instead of $10,000. That would be an additional $5,000, at a 25% bracket, is $1,250 in your pocket.”
The increase in the SALT deduction came from pressure from Republicans like Congressman Mike Lawler from along the Hudson River. He tweeted, “SALT was my number one focus in Washington from Day One.”
There are two arguments about raising the SALT deduction cap.
Berkeley Brean: “Is there any reason why raising the cap to $40,000 is a bad idea?”
George Conboy: “There are two arguments. One is you raise that cap, you give the average American a tax break. But just the average American in high tax states, not everyone.”
“The other argument is raising the cap subsidizes high tax states for charging their residents more,” Conboy added. “Raising the cap lets high tax states off the hook a little because to their residents they can say – sure we charge you a lot of taxes but you get to deduct it.”
Congressman Joe Morelle, a Democrat whose office is in Rochester, didn’t comment directly about SALT but said the entire bill is “one the most disastrous maybe in the history the country.” He refers to the cuts to Medicaid and food programs and the debt the bill’s tax cuts create.
New York has the third highest income tax burden in the country at almost 11%. Next door in Pennsylvania, it’s closer to 3%. New York is also in the top 10 in terms of highest property taxes.
Republican Congresswoman Claudia Tenney did not respond to a request for an interview. Her statement on the bill doesn’t mention SALT, but says the bill will bring one of the most significant tax cuts in American history.
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