Recently, President Donald Trump and senior advisor to the president/CEO of Tesla and SpaceX Elon Musk sat down with Fox News television broadcaster Sean Hannity for an exclusive interview discussing the extremely eventful first few weeks of Trump’s second presidential administration.
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Amidst the discussion of things like Department of Government Efficiency (DOGE), the media and anti-Trump sentiment, though, was an interesting digression in which Hannity mentioned that Trump, in his first administration, took away a tax deduction that Hannity loved.
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When Trump signed the Tax Cuts and Jobs Act in 2017– which took effect on Jan. 1, 2018 — the revenue act placed a $10,000 cap on the state and local tax deduction (SALT deduction). SALT is, essentially, an itemized deduction allowing taxpayers to deduct the amount of income, sales and property taxes paid to state and local governments. Historically, the SALT deduction has disproportionally aided the upper-middle class and wealthy taxpayers who live in states with high taxes.
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That was, until, the Tax Cut and Jobs Act, which capped the SALT deduction at $10,000 for the years 2018 to 2025. Not everyone was happy about the cap, however, with Thomson Reuters reporting that wealthy taxpayers in New York, New Jersey, Maryland and Connecticut unsuccessfully sued the federal government, challenging the SALT cap’s legality and fairness.
All of which was brought to the fore in the Hannity interview, in which Hannity said to Trump, “You know, my taxes went up the first time you were president, because you took away the SALT deduction … which, by the way, I thought was the right decision.”
Trump defended his decision regarding the SALT cap, noting that he felt the SALT deduction “rewards badly-run states.”
The states that most benefitted from SALT were California, Connecticut, New Jersey and New York.
“It was the right decision — in fact, Reagan tried to do it … but at the same time … it’s tough for the states,” Trump said. “[Reagan] was unable to do it. I got it done. And now we’re going to give some back.”
Notably, per Kiplinger, during his 2024 presidential campaign, Trump changed course from his Tax Act and stated that he intended to repeal the cap and “get SALT back.”
