Trump open to fixing tax cap law

WASHINGTON — President Donald Trump on Wednesday said he’s “open to talking about” revisions in the Republican 2017 tax law that placed a $10,000 cap on deductions for state income tax and local property taxes.

The SALT break, many argue, makes life affordable in high-cost states like Connecticut.

“There are some people from New York who have been speaking to me about doing something about that, about changing things,” Trump said in an Oval Office interview with Washington-based regional reporters, including Hearst Connecticut Media. “It’s been severe on them.”

Trump appeared at ease in the interview, wearing a navy blue suit and customary red tie, his hair in a perfect frontward swoop. He sat in his usual seat by the Oval Office fireplace under a portrait of Thomas Jefferson.

And he bantered with reporters about the political figures in their home states and his views on multiple issues of regional interest, such as the impact of tariffs

on farmers and forest conservation in California to prevent wildfires.

The cap on property tax and state income tax deductions appears destined to hit Connecticut hard. This is the first tax season with the limitation fully in place, and many taxpayers are just waking up to the prospect of higher federal taxes — not lower, as Trump promised when the tax plan was pitched.

Connecticut, along with New York, New Jersey and Maryland, is challenging the SALT cap in federal court, saying Republicans in Congress and the Trump administration singled out 12 higher tax, higher cost states (most with Democratic governors and most going for Hillary Clinton in 2016) for political purposes.

“How did they pick these 12 states?” New York Gov. Andrew Cuomo asked. “Do you really think it’s a coincidence?”

According to calculations by the Government Finance Officers Association, the percentage of tax filers claiming SALT deductions is fairly uniform in the western part of Connecticut.

In the 4th Congressional District, represented by Rep. Jim Himes, D-Conn., 38 percent of taxpayers filed for SALT deductions.

In the 3rd Congressional District, represented by Rep. Rosa DeLauro, DConn., it was 40 percent. And in the 5th District, represented by Rep. Jahana Hayes, D-Conn., it was 39 percent.

A survey by the nonpartisan Tax Foundation found Connecticut is No. 3 in the nation in terms of the value of the SALT deductions as a percentage of adjusted gross income, at 8.5 percent.

Trump expressed surprise that the SALT deduction was an issue for middle-class people upstate.

“It affects wealthy people,” he said.

But after a reporter said that working middle-class homeowners looked to the SALT deduction to make ends meet, Trump said he might be open to making changes.

“It would have to go through (a congressional) committee; it would have to be started by Democrats in the House,” he said. “I’d be open to talking about it. There are some people talking to me about this.”

The president declined to say to whom he’d been talking.

During deliberations over the tax bill that Trump eventually signed into law in December 2017, Republicans from low-tax states mostly in the South and West argued that SALT enabled states like Connecticut to shoulder less of a tax burden at their expense. Connecticut countered that as one of the nation’s top “donor” states, it is actually subsidizing the low-tax, low-cost states.

According to an Associated Press study from last year, Connecticut gets back 83 cents on each dollar that goes to the IRS, one of the nation’s worst rates.

Trump repeated much of the low-tax states’ arguments. “It makes all states the same,” he said.