The closer we get to a real tax bill, the louder the opposition to a possible B-SALT cap becomes.  That’s a good thing, because the threat is real.

First, an explainer – lots of folks are talking about C-SALT (state and local taxes paid by corporations) deductions these days, but that’s a misnomer. There is no separate corporate policy regarding SALT deductions. If Congress caps C-SALT, it caps deductions for S corporations and other pass-throughs too.  It’s the same deduction.  So forget about C-SALT and talk about B-SALT instead, because we are all in the same boat here.

On the B-SALT front …

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Last month, the Bipartisan Policy Center put forward some suggestions on how to address the pending sunset of the State and Local Tax (SALT) cap, including rolling back the pass-through “SALT Parity” laws we helped enact in 36 states.  A couple of thoughts.

Pass-Through Parity

First, the SALT cap played a big role in our efforts to ensure pass-through businesses were treated fairly under the TCJA.  The SALT cap raises huge amounts of revenue ($100 billion-plus per year) and about 20-30 percent of that is paid on pass-through income.  For comparison, that’s about half the total revenue impact of the …

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Richard Rubin is out with a new piece in the Wall Street Journal that highlights just how successful our SALT Parity efforts have been. The article centers on an upcoming Tax Policy Center analysis which finds these reforms save businesses $15-20 billion each year, double what the Journal estimated last year.

As longtime readers know, the 2017 Tax Cuts and Jobs Act (TCJA) imposed a $10,000 cap on the amount of state and local tax (SALT) deductions taxpayers can claim on their federal return. While C corporations were exempted from the cap, most pass-through businesses owners were subjected to …

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Thanks to the efforts of S-Corp and our allies over the past five years, 31 states have adopted our SALT Parity reforms to date, with another half-dozen actively considering them. Those new laws have enabled pass-through businesses to save north of $10 billion each year, a figure that will only increase as more states and businesses embrace the approach.

As background, the 2017 Tax Cuts and Jobs Act subjected deductions on state and local taxes (SALT) on pass-through business income to …

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