The middle class being largely untouched by SALT limits is due to two main factors. First, the large increase in the standard deduction. You need a lot of deductions to get over the $24,000 standard deduction. Yes, you can get there pretty easily with a huge mortgage and high state taxes. But then there's the AMT. The Alternative Minimum Tax already didn't allow SALT deductions, and upper-middle-income people in high-tax states were the people most affected by AMT. If you were previously paying AMT, the Trump SALT limits are irrelevant to you. Tax reform effectively eliminated AMT for almost everyone.
Here are some hypothetical examples of how SALT limits and tax reform affected people in a high-tax, high-property-value, blue state city.
Here are some hypothetical examples of how SALT limits and tax reform affected people in a high-tax, high-property-value, blue state city.
Will the Democrats really repeal SALT limits for the rich, just to let the middle class fall back into AMT?