Higher state and local tax, or SALT, deduction caps won't prevent high-income households from moving to lower-tax states such as Florida and Texas, according to a report by Goldman Sachs.
"Emigration from high- to low-tax states (and associated impacts) will likely continue. While the House Republican reconciliation proposal increases the SALT deduction cap to $40k for households under $500k per year, it does not change incentives for top earners who are most likely to move and have the largest impact on state budgets," economists at the investment bank and financial services company wrote, according to the New York Post.
The current SALT deduction is capped at $10,000.
President Donald Trump's One Big Beautiful Bill Act, passed in the House last month, raises that to $40,000 for those with annual incomes up to $500,000, with the cap phasing downward for those with higher incomes. Also, the cap and income threshold will increase 1% annually over 10 years.
House Speaker Mike Johnson, R-La., is pressing Senate Republicans to minimize changes to the SALT deal.
"I've asked them to modify it as little as possible because I've got a very delicate balance there," Johnson told reporters at the White House on Monday.
"The reality is that we have a very diverse conference. This is a very important thing for their constituents."
Solange Reyner ✉
Solange Reyner is a writer and editor for Newsmax. She has more than 15 years in the journalism industry reporting and covering news, sports and politics.
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