Wealthy people from New York, Connecticut and other high-tax states have been flocking to Florida to buy real estate. Their exodus was prompted in large part by President Trump’s 2017 tax overhaul, which capped deductions of state and local taxes.
Now, Trump said he is open to changing this controversial provision of the tax law, according to Bloomberg. The move could potentially reduce the amount of “tax migrants” who are establishing residency in the Sunshine State by buying real estate.
Trump did not go into details of how he would remove these caps, but said that some people in New York had been asking him to change the law, Bloomberg reported. Trump’s remarks came during a press conference with regional newspapers and was earlier reported by the Stamford Advocate.
Trump’s tax law in 2017 capped the amount of state and local taxes (SALT) taxpayers could deduct each year at $10,000. These SALT taxes include property taxes. This meant that wealthy individuals in high-taxed states have to pay significantly more in taxes each year to the Internal Revenue Service in the past. Developers in Florida, which has no state income tax, have said that they are seeing a big uptick in buyers from the Northeast and other states as a result of the new tax law.
Any plans to remove the SALT cap, however, would likely come with pushback from fiscally conservative Republicans. According to the Tax Foundation, removing the $10,000 cap would cost the government about $673 billion over a decade, Bloomberg reported. [Bloomberg] — Keith Larsen