FACT CHECK: Michael Bennet Claims SALT Benefits The ‘Wealthiest People’

Democratic Colorado Sen. Michael Bennet claims state and local tax (SALT) deduction benefits “the wealthiest people in these very blue states in the east and west coasts.” 

Democratic Sen. Michael Bennet on the SALT cap debate: “The benefit of SALT goes to the wealthiest people in these very blue states in the east and west coasts. I don’t understand why Colorado’s firefighters and teachers should be financing that”

— Jeff Stein (@JStein_WaPo) December 10, 2024

Verdict: True

The benefits of SALT primarily go to higher income taxpayers, multiple tax experts and think tanks told Check Your Fact via email. One expert said that wealthy people in non-blue states also benefited from SALT.

Fact Check: 

The federal government told the Second Circuit several states should be prohibited from challenging a Treasury Department rule regarding the SALT deduction cap, according to Bloomberg. New Jersey and Connecticut claimed “lack of standing” during a change of policy.

Jeff Stein, White House economics reporter for The Washington Post, posted that Bennet said SALT benefits the wealthiest people the most.

“The benefit of SALT goes to the wealthiest people in these very blue states in the east and west coasts,” Bennet said. “I don’t understand why Colorado’s firefighters and teachers should be financing that.”

SALT allows taxpayers who itemize to when filing federal taxes to deduct certain taxes that would be paid to state and local governments, according to the Tax Foundation. Additionally, the SALT cap limits these deductions to $10,000 per year of property, sales, or income taxes.

Michel’s statement is accurate. Homeowners with high property taxes, such as those who live in New York, New Jersey and California, benefit the most from the SALT deduction, according to CBS News. About 80% of people earning between $100,000 and $499,999 itemized in 2016, according to the Tax Foundation.

Experts told Check Your Fact that Bennet’s claim is correct.

Adam N. Michel, director of tax policy studies at the Cato Institute, said “Bennet is correct” in an email to Check Your Fact.

“Senator Bennet is correct; the benefits of the SALT deduction primarily flow to higher-income taxpayers. For example, if Congress were to repeal the SALT cap, more than half of the dollar value of the tax cut would accrue to the top one percent,” Michel wrote. “Before the TCJA capped the deduction in 2017, the average millionaire living in NY or CA deducted more than $450,000 worth of SALT. The average millionaire in Texas deducted only $50,000 and paid close to $180,000 more per year in federal taxes.”

Michel also directed Check Your Fact to a webpage from the Cato Institute with more information about SALT. (RELATED: Kamala Harris Capital Gains Tax Rate Proposal Would Only Apply To Those Earning Over $1 Million)

Repealing the SALT cap would overwhelmingly benefit high-income Americans, said Brendan Duke, senior director of economic policy at The Center for American Progress, in an email to Check Your Fact.

“Over 90 percent of the benefits would go to Americans in the top 20 percent and over 40 percent of the benefits would go to Americans in the top 1 percent. It would provide an average tax cut of $35,000 to households in the top 1 percent (a 1.6 percent increase in their income) while providing an average tax cut of just $30 for households in the middle 20 percent.”

Gary Clyde Hufbauer, nonresident senior fellow at the Peterson Institute for International Economics, commented that wealthy people do benefit from SALT, but that there are still plenty of affluent people in non-coastal red states.

“Bennet’s statement is roughly accurate.  Only wealthy people pay more than $10,000 annually in state and local taxes, and wealthy people are concentrated in coastal states,”  Hufbauer told Check Your Fact via email. “That said, there are plenty of wealthy people in red states like Texas and Ohio.”

A Tax Foundation spokesperson directed Check Your Fact to a map showing what counties would see the largest benefit from lifting the SALT cap. The most benefits are reaped by counties in the states of California and New York, then in smaller concentrations in Colorado, Connecticut, Idaho and Wyoming.