Congress moves to restore unlimited tax deductions for the wealthy
H.R. 430 — SALT Deductibility Act · Filed by Andrew Garbarino (R-NY) · 25 cosponsors · Introduced Jan 15, 2025 · Referred to committee
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What it does
This bill repeals the $10,000 annual cap on federal tax deductions for state and local taxes (SALT), allowing taxpayers to deduct unlimited amounts of state income, property, and other local taxes from their federal taxable income. The change applies retroactively to 2025 and later tax years, primarily benefiting high-income earners and residents of high-tax states.
Why we flagged it
The bill's sole operative mechanism is the repeal of a cap on tax deductions. It is a straightforward tax reduction, not a regulatory change or appropriation. The benefit flows almost entirely to high-income taxpayers and residents of high-tax states, making it a narrow tax cut rather than a broad public measure.
What the text implies
- Repealing the SALT cap increases the federal budget deficit by an estimated $100+ billion over ten years (CBO estimates), requiring offsetting revenue or spending cuts elsewhere.
- The benefit is highly regressive: approximately 90% of the tax savings accrue to households earning over $200,000 annually, while 60% of households receive no benefit at all.
The full analysis lists 4 implications of this text.
Who stands to gain
high-income individual taxpayers; residents of high-tax states; tax preparation and accounting firms (increased complexity)