Investment News

Advisers want Congress to restore the SALT deduction

By Mark Schoeff | Investment News | Aug 11th, 2021

But the high-tax states where it causes the most pain also tend to be Democratic-leaning.

“It hurts the blue states like California and New York more than red states like Texas and Florida,” said Sam Huszczo, founder of SGH Wealth Management in Detroit, Mich. Restoring the SALT deduction “will benefit the wealthy more than the majority of the base of the Democratic Party.”

Chris Chen, an adviser at Insight Financial Strategists in Newton, Massachusetts, made a similar calculation.

“Even Democrats want to take care of their high earners,” Chen said. “It seems that lifting SALT restrictions looks like it is going to help the people who are going to be hurt by increases in income tax and capital gains rates.”

But Thomas said SALT also is being rubbed into the middle class.

“This absolutely affects middle-income households just as much if not more than high-income earners,” Thomas said. “It’s not fair for the middle-income families that are in those blue states.”

Some progressive Democrats oppose raising or eliminating the SALT cap.

“This will be a moment where the divided factions within the Democratic Party will have their first test,” Huszczo said.