Updated on November 5, 2021.
Summary: Under current law, individuals can deduct up to $10,000 in state and local taxes (SALT) from taxable income through 2025, after which no limitation applies. The latest House bill under the Build Back Better framework would instead set the limitation to $80,000 from 2022 to 2030 and $10,000 in 2031.
We estimate this provision would raise $65 billion in revenue over the 10-year budget window, with net revenue loss concentrated before 2026. In 2022, taxpayers in the top 10 percent of incomes would see 88 percent of the benefits from this policy. In 2026, when an $80,000 represents a tax increase relative to current law, the provision would raise taxes for those in the top 5 percent only, with more than 99 percent of the increase falling on the top 1 percent of households.
We will continue to update this page with new SALT limitation provisions as they firm up in Congress.
| 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | Total |
|---|---|---|---|---|---|---|---|---|---|---|
| -104 | -62 | -65 | -68 | 22 | 51 | 54 | 57 | 60 | 122 | 65 |
| Income Group | Average tax change | Share with a tax cut | Percent change in after-tax income | Share of tax change |
|---|---|---|---|---|
| Bottom quintile | $0 | 0.0% | 0.0% | 0.0% |
| Second quintile | $0 | 0.3% | 0.0% | 0.1% |
| Middle quintile | -$5 | 1.4% | 0.0% | 0.5% |
| Fourth quintile | -$60 | 7.6% | 0.1% | 3.0% |
| 80-90% | -$385 | 30.4% | 0.3% | 8.5% |
| 90-95% | -$1,375 | 59.9% | 0.8% | 14.5% |
| 95-99% | -$4,995 | 79.7% | 1.6% | 41.2% |
| 99-99.9% | -$15,360 | 83.6% | 1.8% | 28.3% |
| Top 0.1% | -$18,050 | 83.2% | 0.2% | 3.9% |
| Income Group | Average tax change | Share with a tax increase | Percent change in after-tax income | Share of tax change |
|---|---|---|---|---|
| Bottom quintile | $0 | 0.0% | 0.0% | 0.0% |
| Second quintile | $0 | 0.0% | 0.0% | 0.0% |
| Middle quintile | $0 | 0.0% | 0.0% | 0.0% |
| Fourth quintile | $0 | 0.0% | 0.0% | 0.0% |
| 80-90% | $0 | 0.0% | 0.0% | 0.0% |
| 90-95% | $5 | 0.2% | 0.0% | 0.1% |
| 95-99% | $50 | 1.1% | 0.0% | 0.5% |
| 99-99.9% | $14,520 | 48.9% | -1.6% | 33.6% |
| Top 0.1% | $239,530 | 77.5% | -3.0% | 65.8% |