You do not get credit for fixing what you broke

James Martorano

When I was a child, the rules of responsibility were fairly simple. If you broke a neighbor’s window, you were expected to admit what you had done and pay for the repair.

Paying for it did not make you a hero. It merely meant that you had finally accepted some responsibility for the damage you caused.

That childhood lesson should be remembered as members of the current Republican majority seek political credit for raising the federal deduction for state and local taxes, commonly known as the SALT deduction. The increase provides some relief to homeowners in New York and other high-tax states. But historical honesty requires us to remember who created the limitation, how long taxpayers were forced to live with it, and how incomplete the supposed repair remains.

The SALT deduction is neither a recent invention nor a special benefit created for New York. It has existed since the modern federal income tax began in 1913. The basic principle was understandable: in calculating income subject to federal taxation, taxpayers could deduct certain taxes they had already been required to pay to state and local governments.

Congress changed the details of the deduction over time. Different rules governed property, income and sales taxes at different points in its history. Nevertheless, state and local property taxes, together with either state income taxes or general sales taxes, remained deductible for taxpayers who itemized. Before 2018, federal law generally imposed no fixed dollar ceiling on the SALT deduction itself, although the alternative minimum tax and other restrictions on itemized deductions sometimes reduced or eliminated its value.

The policy has always been open to legitimate debate. Supporters argue that taxpayers should receive some federal recognition for money already paid in compulsory state and local taxes. Those taxes finance schools, police and fire departments, roads, sanitation, public transportation, health programs and other essential services. Limiting the deduction can therefore place indirect pressure on the ability of states and municipalities to support those services.

Critics respond that the SALT deduction disproportionately benefits higher-income taxpayers because they are more likely to itemize, own expensive homes and pay larger amounts in state and local taxes. They argue that residents of lower-tax states should not subsidize the taxing and spending decisions of higher-tax states. That is a legitimate policy position.

But it is misleading to suggest that everyone affected by the cap is wealthy. In Westchester, Rockland and other parts of the Hudson Valley, a family can own a relatively modest home, earn a middle- or upper-middle-class income and still pay property and state income taxes well above $10,000. High housing values and property taxes do not necessarily mean that a family feels wealthy or has abundant disposable income.

The major change came with the Tax Cuts and Jobs Act of 2017. That legislation lowered various federal income-tax rates, substantially increased the standard deduction and permanently reduced the corporate tax rate from 35 percent to 21 percent. To recover some of the revenue lost through those and other reductions, Congress placed a $10,000 ceiling on the SALT deduction beginning in 2018.

 The cap was especially harsh because it made no allowance for regional differences in housing costs or property taxes. It was not indexed for inflation. Moreover, the same $10,000 ceiling generally applied to married couples filing jointly and single taxpayers, creating an additional potential marriage penalty.

 Consider a New York homeowner paying $14,000 in property taxes and $9,000 in state income taxes. Before the cap, that taxpayer could potentially deduct the full $23,000 if itemizing and otherwise eligible. After 2017, only $10,000 counted toward the federal SALT deduction. The remaining $13,000 became nondeductible for federal purposes.

Political responsibility for that change is not a matter of opinion. Republicans controlled the House of Representatives, the Senate and the presidency in 2017. The final tax legislation passed the House by 224–201 and the Senate by 51–48. No Democrat voted for it. President Donald Trump signed it into law on Dec. 22, 2017.

Some Republican representatives from New York, New Jersey and California opposed the legislation, partly because of the SALT cap. Their opposition should be acknowledged. But the legislation itself was written, advanced and enacted by the Republican Party. The $10,000 limitation was not imposed by Democrats, by a court or by some uncontrollable economic event. It was a deliberate feature of a Republican tax law.

The effects were concentrated in states with high housing values, property taxes and income taxes. In 2017, before the cap took effect, the average SALT deduction claimed in New York was approximately $23,800. The national distribution was uneven, and not every New Yorker was harmed equally. Because the 2017 law also increased the standard deduction, fewer taxpayers itemized afterward. Nevertheless, for homeowners who continued to itemize and paid more than $10,000 in qualifying taxes, the loss was real.

Democrats subsequently called for repeal or expansion of the cap. They did not succeed in eliminating it, even during the period when they controlled Congress and the White House. That failure is also part of the record. Democratic proposals encountered objections concerning their cost and the substantial benefits that a complete repeal would provide to very high-income households. Historical fairness requires acknowledgment of that missed opportunity.

In 2025, another Republican-controlled Congress changed the limitation. The new law raised the SALT ceiling from $10,000 to $40,000 for the 2025 tax year. The full amount is subject to an income-based phase-down beginning at $500,000 of modified adjusted gross income. The ceiling and income threshold increase by one percent annually through 2029.

But this is not a permanent restoration of the deduction that existed before 2018. Unless Congress acts again, the ceiling falls back to $10,000 in 2030. The new law therefore provides temporary and incomplete relief from a restriction created by the same political party eight years earlier.

That fact should temper the campaign speeches, press releases and victory laps. The current Republican majority did not rescue taxpayers from an unforeseen disaster. It partially loosened a limitation its own party deliberately imposed. It allowed New York families to suffer under that limitation for years and then replaced it with a temporary arrangement containing another expiration date.

Nor should the public forget that the original cap helped finance a law containing a permanent corporate tax reduction. The corporate rate was lowered permanently, while the relief now offered to homeowners is temporary. That contrast reveals something about congressional priorities and makes the demand for public gratitude even less convincing.

Certainly, representatives have an obligation to advocate for their constituents. New York members who demanded a higher SALT ceiling were doing the job they were elected to perform. But performing that basic duty does not erase the history of the policy or justify presenting a partial correction as a great legislative triumph.

Political accountability cannot survive if officials are permitted to create a problem, campaign against the consequences of that problem, partially repair it and then ask voters to applaud them for delivering salvation. A temporary increase to $40,000 is preferable to the $10,000 cap, but “preferable” is not the same as adequate, permanent or heroic.

The appropriate public response is clear-eyed judgment. Taxpayers can accept the limited relief without surrendering their memory. They can recognize that the higher deduction is useful while refusing to rewrite the history that made it necessary.

The window has been partially repaired, and only temporarily. The people who belong to the party that broke it should not expect to be carried through the streets because they finally replaced some of the glass.