Overview

• The legislation raises the SALT deduction cap from $10,000 to $40,000 for single and joint filers earning up to $500,000 and scales back deductions above that threshold.
• The Joint Committee on Taxation projects the SALT cap revision will add about $130 billion to the federal deficit over the next decade.
• A Penn Wharton Budget Model analysis estimates the measure could cost up to $350 billion over ten years and primarily benefit higher-income taxpayers.
• The SALT provision is part of a broader $3.9 trillion House reconciliation bill that also includes permanent individual rate cuts, increased border funding and entitlement spending reductions.
• With no Senate Republicans from high-tax states, fiscal conservatives and blue-state lawmakers are preparing for contentious debates and potential amendments in the upper chamber.