The recently passed Tax Cuts and Jobs Act caps the federal deduction for state and local taxes (the SALT deduction) at $10,000. That’s bad news for people who pay a significant amount in such taxes and relied on the SALT deduction to reduce their federal-tax liability. In other words, it’s bad news for rich people who live in blue states. As Jared Walczak, a senior policy analyst at the Tax Foundation, has shown, more than 88 percent of the SALT deduction’s benefit flows to those who earn more than $100,000 in income, and the deduction itself is a boon to states with bigger governments.