Pull up a chair! This week, Congress is staging its very own fiscal fireworks show, complete with markups and lots of drama. While lawmakers duke it out over the next big tax moves, we’re weighing in with a couple of takes on everyone’s favorite seasoning: SALT. First, we revisit our proposal to cap the business SALT deduction and redirect the savings to growth-friendly tax and deficit relief. Spoiler alert: it’s still a smart, budget-neutral tradeoff. Then we dig into a lesser-known fact: before the TCJA, the AMT was secretly capping SALT benefits for many households. Raise the SALT cap now without changes to the AMT and you’re handing wealthy taxpayers an even bigger benefit than they had before TJCA. Oops!  

B-SALT Redux: A Dose of Pro-Growth Pragmatism  

Back in February, we rolled out 20 ideas to make permanent extension of the TCJA fiscally responsible, including capping the SALT deduction for businesses just like we do for individuals. Fast forward to today, we’ve taken a fresh look, learned a few things, and updated our thinking. In our latest piece, we explain why starting with a cap on SALT deductions for business income (as opposed to income and property taxes) and reinvesting those savings into pro-growth tax and deficit relief is the kind of win-win scenario budget nerds dream about. 

Just Regular SALT (with an AMT Twist) 

What We’re Reading 

• Three cheers for Representative Smucker and his co-signers for advocating for a reconciliation bill that won’t blow up the deficit. They put it nicely: “A $2 trillion reduction in spending may sound substantial. However, it equals only 2.3 percent of projected federal outlays over the next decade and only reduces the rate of growth in spending. Even with those savings, annual spending is expected to grow from $7 trillion to $10 trillion over the next 10 years, and debt will exceed $50 trillion by 2035.” 

• Couldn’t agree more with the WSJ: “Trump Is Threatening Big Pharma With Tariffs. Tax Changes Might Work Better.” They highlighted our proposal to curb round-tripping, a sneaky loophole that encourages U.S. multinationals to offshore both production and profits, even when selling stateside.  

• We love a good visualization, and the Bipartisan Policy Center nailed it with a great roundup of charts breaking down key TCJA debates. That baseline chart? Chef’s kiss! 

• Finally, a must-read op-ed from AV Fellow Scott Hodge in the Examiner. He warns that a huge deficit-financed tax reform bill could be just as damaging to our economy (and perhaps the political fortunes of supporters) as the inflation-fueling ARPA: “Justifying a massive, deficit-financed tax cut bill under the guise of stimulating the economy is the same rationale that Democrats used to pass the $1.9 trillion American Rescue Plan Act (ARPA) in 2021.” Ouch. 

Trivia Corner 

What famous doctor was once quoted as saying, “The only two things that scare me are God and the IRS?” That would be one Andre Romell Young, better known as Dr. Dre. I guess he’d prefer a world in which tax auditors “forgot about Dre.”