AI Interview: the SALT IRS Deduction
The whole discussion of the SALT deduction that is taking place as part of the Congressional campaigns is completely out of sorts with the reality of the tax structures being discussed. Republicans assume that Trump fixed something that was broken. He didn't. Democrats assume that the previous system was all OK. It wasn't. Some states have high real property taxes, like New York (which is among the highest in the nation). Others have very low real property taxes. And sales tax rates vary from state to state, as do other SALT expenses. Thus, the deductibility of these from federal income taxes creates an imbalance in the tax burden favoring the people in states with higher taxes. Further bedeviling the situation is the political landscape: where many of the higher property and other local taxes are led by Democratic Party officials and the lower property tax states, by Republican Party officials. For the above reasons, and more, this has been a political football for a long time...