SALT Cap Bump to $40,000 in GOP Bill Would Help Few Taxpayers (1)

House Republicans’ deal to raise the limit on how much state and local tax payments people can deduct from their federal income taxes won’t have as broad of an effect as lawmakers who negotiated it hope.

Speaker Mike Johnson (R-La.) said that members from New York, New Jersey, and California—high-tax states most susceptible to the SALT limit—agreed to an increase in the House-passed bill from the current $10,000 cap to $40,000 for taxpayers earning $500,000 or less annually.

But that increase will only marginally broaden the pool of people who can take the deduction, policy analysts and practitioners ...