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SALT Loss in Tax Plan Gives Public Schools Indigestion

September 28, 2017

It might be too early to get seriously alarmed… but it isn’t too early to forewarn those who support public education that the Trump Tax Reform plan could have a devastating effect on school funding if the state and local tax deduction, known as SALT, is eliminated as is rumored. Ever since the inception of the federal income tax, wage earners have been allowed to deduct whatever state and local taxes they pay from their gross income, which has the effect of lowering the amount of federal taxes they are required to pay. The logic behind this is clear and equitable and is opposed even by the GOP, as the Politico education feed noted this morning:

“Without the SALT deduction, taxpayers in all 50 states and in the District of Columbia would be doubly taxed – they would pay federal income taxes on the money they pay to their state and local governments,” the Republicans wrote in a June letter . “Such a policy is eminently unfair, as the federal tax code has recognized for the past 103 years.”

While the specifics of the Trump tax plan are vague, it appears that the SALT deduction might be up for grabs since the President seems intent on cutting the tax rates for the wealthiest Americans. In the meantime, it appears that there is bipartisan support for keeping the SALT deduction… but as we all realize bargains can be struck that fly in the face of convention.

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