Bloomberg: Many Rich Fretting About SALT Didn’t Get That Tax Break Anyway
About three-quarters of people who in past years paid more than $10,000 in state and local taxes had been required to take the alternative minimum tax, meaning they couldn’t have written off the SALT levies anyway, according to IRS data analyzed by Bloomberg. And because the AMT has been scaled back as well, those top earners in fact get a new tax break by now being able to write off up to $10,000 of their SALT payments.
Bloomberg analyzed IRS data from 10 of the wealthiest counties in the U.S. – including New York’s Westchester, New Jersey’s Somerset, Connecticut’s Fairfield and California’s Marin counties.
The numbers could deflate some of the heated rhetoric over the 2017 tax overhaul, the Republican Party’s signature legislation of the Trump era. Since the law was enacted, governors and lawmakers from high-tax states have decried the change as a GOP assault on Democratic strongholds. New York Governor Andrew Cuomo called it an “economic civil war.”
“A lot of folks are coming in assuming they’re going to lose under the new tax law when in fact, they’re not,” said Ryan C. Sheppard, an accountant at Knight Rolleri Sheppard in Fairfield, Connecticut. “In many cases they’re doing better because in prior years the alternative minimum tax disallowed all their state and local tax deductions. Now they’re at least getting $10,000, where they got zero before.”