by Bill Tracy

Readers will recall that back in 2017 the Trump administration enacted the Tax Cuts and Jobs Act (TCJA) which fundamentally changed U.S. tax policy.  The maximum allowable SALT (state and local tax) deduction was lopped off at $10,000, forcing many taxpayers to stop itemizing deductions.  

Offsetting the SALT deduction cap, the TCJA allowed a larger Standard Deduction. Overall TCJA reduced federal income taxes for most Americans.  

Locally however, both Virginia and Maryland — I believe uniquely among all states — used the TCJA as an excuse to increase state income taxes. This was accomplished passively by no longer allowing residents to deduct their federal itemized deductions from income calculated for state taxes.    

Enter President Trump’s proposed new Big Beautiful tax bill. Among other things, the bill reportedly considers allowing the SALT deduction to increase up to $30,000 or possibly even more. Presumably, this means that more Virginia residents will be able to take itemized deductions yet again.   

If the federal tax bill passes, how will Virginia lawmakers react? Will the commonwealth allow residents to experience tax relief, or will elected officials yet again find a way to increase state taxation above and beyond savings we might see on the federal side?   

As an aside, earlier this week Fairfax County proudly announced a local property tax rate reduction. However, the average homeowner will pay about $500 more in annual property taxes. Virginia math at its best!    

Bill Tracy, a retired engineer, lives in Northern Virginia.