For many years before 2018, taxpayers could deduct their state and local taxes (hence the acronym SALT) against their federal income tax liability. So, for example, if you owed $30,000 in state and local taxes, you could deduct that amount against your federal income, providing you a very large tax break on the federal level. The overwhelming majority of taxpayers that benefit from this tax break are the wealthy, since they typically have very high state tax burdens.
As part of the 2017 federal tax reform, lawmakers capped that deduction at $10,000, which mostly eliminates that tax break for the wealthy.
