Disallowing Business SALT Deductions Raises Revenue but Risks Slowing Economic Growth

• Policymakers are deciding on the state and local tax deduction cap as part of the 2017 Tax Cuts and Jobs Act provisions.
• Since 2018, individual SALT deductions have been capped at $10,000.
• There is debate about making the cap more generous in Congress’s reconciliation package.
• Disallowing corporate SALT deductions could raise significant revenue but may slow economic growth.
• Disallowing corporate income tax SALT deductions could raise $209.4 billion over 10 years.
• Disallowing corporate property tax SALT deductions could raise $222.9 billion over 10 years.
• Policymakers may adjust business SALT deductions with new limits on pass-through deductions.
• Ending pass-through workarounds could raise $211.1 billion over 10 years.
• Disallowing property tax deductions for pass-throughs could raise $281.2 billion over 10 years.
• Repealing business income and property tax deductions could raise $924.5 billion over 10 years.

Source: taxfoundation.org

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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