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Trump’s Wall Street Tax Glitch

While everyone’s focused on the fate of the SALT deduction in Trump’s tax bill, a similar but lesser-known provision could punish a range of businesses, from high-powered law firms and hedge funds to even your local chiropractor, while leaving corporations unscathed.

trump signs bill
The provision unfairly targets places, such as Trump’s hometown of New York City, which is replete with private partnerships, all of which will be paying higher taxes unless this “glitch” gets fixed in the Senate version of the bill. Photo: Chip Somodevilla/Getty Images
William D. Cohan
May 28, 2025

Buried deep inside Trump’s “Big, Beautiful” tax bill is a provision that has the professional class up in arms across the country, as it seems to unfairly target them for a big, beautiful, tax increase while others get a big, beautiful cut. You will remember, from Trump 1.0, when the president decided to penalize residents of high-tax states such as New York and California—who, perhaps incidentally, did not vote for him either in 2016 or 2024—by capping at $10,000 the amount of state and local taxes (SALT) that they can deduct from their federal returns. In the new tax bill, Trump and his House Republican allies have sought to make that provision more accommodating. The cap now will be $40,000 for married couples filing jointly. (Unless you and your spouse, filing jointly, make more than $600,000 per year—then you are back at the $10,000 cap. Don’t ask me why.)