Initially, Trump proposed capping itemized deductions at $100,000 for single filers and $200,000 for married couples filing jointly. The new plan doesn’t talk about caps except to say the administration wants to “[e]liminate targeted tax breaks that mainly benefit the wealthiest taxpayers.”
Under the new plan, tax breaks for charitable giving, mortgage interest and retirement savings would remain in place. However, the administration now wants to eliminate the deduction for state and local taxes.
Known as the SALT deduction, it is one of the largest federal tax expenditures, with an estimated revenue cost of $96 billion in 2017 and $1.3 trillion over the 10-year period from 2017 to 2026, according to the Tax Policy Center.
More than half of taxpayers who are earning $75,000 and above claim SALT deductions on their federal income tax returns as do more than 90 percent of taxpayers who make $200,000 or more. (See chart below.)