The 2017 Tax Cuts and Jobs Act (TCJA) capped the State and Local Tax (SALT) deduction, raising taxes on high-income taxpayers, particularly in high-tax states and localities. In the House of Representatives’ One Big Beautiful Bill Act (OBBBA), a small number of lawmakers representing districts with high state and local taxes led a successful charge to raise the SALT cap to $40,000 for married couples filing jointly ($20,000 for all others) with the cap phasing down to $10,000 at $500,000 in income. These “SALT caucus” lawmakers had rejected previous, less generous options to either raise the cap or eliminate the cap but disallow the deductibility of certain kinds of taxes.

According to previous Tax Policy Center estimates, raising the SALT cap to $40,000 ($20,000 for non-joint filers) without any income restrictions would cost $600 billion over 10 years, with 40 percent of the total tax benefit going to tax units between the 95th and 99th income percentiles. With the $500,000 phaseout in place and new restrictions on state pass-through entity workarounds, the total revenue cost of the proposed SALT cap increase will be lower, and benefits will accrue more broadly, although still be concentrated in the top 20 percent of incomes.

This brief discusses the geographic distribution of the SALT deduction’s benefits of the at the county level and explores economic and fiscal conditions in a subset of counties likely to gain from potential expansions. While the deduction primarily benefits high-income communities—those with elevated personal incomes, high home values, and strong tax bases—the public services it helps fund can also support lower-income residents living in those areas. Additionally, some counties with high SALT deduction take-up fall closer to the national average in income, reflecting factors such as local tax structures or high housing costs.