Donald Trump’s Latest Tax Pander Flops In Congress

WASHINGTON ― Former President Donald Trump’s statement on Tuesday in favor of an unlimited federal tax deduction for state and local taxes ― a flip-flop from the stance he held during his presidency ― left heads spinning on Capitol Hill.

Trump himself sharply curtailed the deduction in 2017, when he signed a partisan tax bill into law in his signature legislative achievement as president.

Democrats and Republicans alike from high-tax states such as New York decried the $10,000 limit on the state-and-local tax write-off, known as the SALT deduction, which reduced the cost of the Republican tax law by hundreds of billions of dollars.

In a pitch to New York voters ahead of a rally on Long Island, an area that could be key to his party maintaining control of the House, Trump casually included repealing the SALT cap alongside his vow to reduce crime and illegal immigration.

“I will turn it around, get SALT back, lower your Taxes, and so much more,” Trump wrote on his website.

The SALT switcheroo follows several other dubious Trump campaign promises, such as a proposal for the government to cover the cost of infertility treatments known as IVF; a tax break on income from tips; no taxes on Social Security benefits; and no taxes on income from overtime work. Not to mention getting gas prices under $2 a gallon and mortgage rates below 3%. Some of the proposals are reminiscent of Trump’s unfulfilled vow in 2016 to make Mexico pay for a border wall.

Outside of House Republicans in the New York delegation, GOP lawmakers on Capitol Hill seemed confounded by Trump’s SALT proposal.

“If you do away with the SALT cap ― the Democrats want to do away with it ― it would be benefiting the same 1% that they condemn Trump for benefiting,” said Sen. Chuck Grassley (R-Iowa), one of the top Republican authors of the 2017 tax law.

“Most people in South Carolina will have a hard time subsidizing high-tax states,” said Sen. Lindsey Graham (R-S.C.), a top Trump ally.

And Sen. Josh Hawley (R-Mo.), who styles himself as a populist, flatly rejected the idea, saying that Trump had “got it right the first time.”

Households with incomes above $200,000 received 71% of the benefit of the SALT deduction in 2017 before Republicans in Congress and Trump took it away, according to an estimate by congressional tax experts.

Senate Majority Leader Chuck Schumer (D-N.Y.) responded to Trump’s “get SALT back” pledge at length in remarks on the Senate floor Wednesday.

“We know Donald Trump, we know what his M.O. is,” Schumer said. “He’s going to do nothing. He’s simply trying to escape the anger of many families he’s upset when he placed those caps, which affect so many middle-class people, particularly in higher-cost areas like Long Island.”

Republican leadership was equally unenthused about Trump’s comments. Senate Minority Whip John Thune (R-S.D.), a possible successor as GOP leader after Mitch McConnell (R-Ky.) steps down later this year, said the issue had been “litigated extensively” in 2017.

He noted to HuffPost that the cap on SALT helped to pay for the bulk of the law, including “lower [tax] rates, doubling the child tax credit, and doubling the standard deduction.”

Repealing the SALT cap would add $1.2 trillion to the deficit and give a tax cut to some high earners, according to an analysis by Marc Goldwein, a policy director for the Committee for a Responsible Federal Budget. That’s in addition to the hundreds of billions in deficit spending that would result from things like lowering the corporate tax rate to 15% for some corporations and eliminating taxes on income from tips, plus the several trillion dollars it would cost to extend the rest of the tax cuts Trump enacted in 2017.

Trump’s comments on SALT, in addition to his other lofty campaign promises, are better viewed in the context of the close race for the White House and for control of Congress. In the House, Republicans are defending a narrow majority and lagging behind the strong pace of Democratic fundraising. Republicans are worried about getting badly outspent in battleground districts, including several in California and New York.

“For Donald Trump to pretend he’s found religion on eliminating the SALT caps ― two months before an election, speaking in Long Island ― is comical, it’s unserious, and it shows the lack of integrity that this man has,” Schumer said Wednesday. “His promises carry about as much weight as Monopoly money.”