Republicans who oppose the state and local tax (SALT) cap will meet on Saturday at Mar-a-Lago with President-elect Donald Trump who promised to “get SALT back” during the 2024 presidential campaign.
Newsweek reached out to the Trump transition team by email on Saturday afternoon for comment.
Why It Matters
The SALT cap deduction allows taxpayers who itemize when filing federal taxes to deduct certain taxes paid to state and local governments, which the 2018 Tax Cuts and Jobs Act (TCJA) capped at $10,000 per year for those filing jointly and $5,000 for single filers. This includes property taxes plus state income or sales taxes, but not both, according to the Tax Foundation.
Before the TCJA, there was no cap on these deductions, with the cap proving to be highly controversial. Blue states and Democrats have opposed the cap, saying it disproportionately punishes those who live in higher cost-of-living states, while Republicans view it as a key instrument to help maintain funding and fight the country’s deficit.
The current cap is set to expire at the end of 2025, making the current talks between lawmakers and Trump a key point in the discussion surrounding the policy.
What To Know
Trump has held a series of meetings with congressional Republicans after the start of the 119th Congress in order to reconcile and thrash out agreements between competing demands between various factions within the U.S. House of Representatives and the U.S. Senate.
One of those groups—the “SALT Republicans”—will petition to have the SALT cap either outright removed or, more likely, to have the cap substantially increased. Even changing the cap level is divisive, with critics saying that increasing the cap from $10,000 to $30,000 would amount to around a $450 billion increase to the country’s deficit.
The group meeting with Trump includes Representatives Mike Lawler, Nick LaLota, Nicole Malliotakis and Andrew Garbarino of New York, Representative Young Kim of California and Representative Tom Kean Jr. of New Jersey.
Lawler has proposed going even further with a $100,000 cap for individual tax filers and $200,000 cap for joint filers as part of his SALT Fairness and Marriage Penalty Elimination Act, which he introduced on Wednesday.
Lawler in a press release called the cap “an unjust penalty in the current tax code.”
Newsweek reached to Lawler’s press team for comment by email on Saturday morning.
New York Governor Kathy Hochul also has come out in strong opposition of the SALT cap ahead of the showdown talks with Trump, saying the current cap robs “middle-class families of their hard-earned money.”
However, the Tax Policy Center (TPC), a think-tank joint venture of the Urban Institute and Brookings Institution, in September 2024 released analysis that argued a cap repeal would mainly benefit the largest income earners.
The analysis determined that households making $63,000 or less, labeled as those with the lowest 40 percent of income, would get “no tax cut on average,” with fewer than one percent getting any tax cut at all.
Only around 5 percent of middle-income households—those making up to $113,000 a year—would benefit from a repeal.
Meanwhile, high-income households would see “about 43 percent of all benefit of lifting the cap.” According to the TPC, those at the upper end of the tax bracket would see a roughly 1.5 percent increase in their after-tax income, representing tens of thousands of dollars in benefit.
Republican Representative Chip Roy of Texas, a member of the House Freedom Caucus, called deficit reduction his “priority” and called SALT a “determining” factor in “whether you can get to a deficit reduction,” The Hill reported.
What People Are Saying
Representative Mike Lawler earlier this week said in a statement: “For too long, the people of the Hudson Valley have shouldered the weight of some of the highest taxes in the nation. The SALT cap has only made that worse and unfairly penalized middle-class families in my district.”
“I’m committed to solving this as part of a broader effort to tackle the affordability crisis millions of New York Families are facing,” Lawler added. “Lifting the cap on SALT will provide relief to millions of New Yorkers and go a long way towards curbing out-migration to states with lower taxes and a better cost of living. While a full repeal of the SALT cap remains my ultimate goal, seeing the SALT Fairness and Marriage Penalty Elimination Act signed into law would deliver immediate relief for the state of New York.”
Representative Nick LaLota this week told The Hill: “The number of bills is not on my priority list. That we have a reasonable increase in a SALT deduction is my top priority, and so when I can achieve my top priority, I’m not going to be a stickler on other things that are less or not important to me.”
New York Governor Kathy Hochul said in a press release this week: “The New York Republican delegation owes middle class New Yorkers a full repeal of the SALT cap. This cap has cost New Yorkers as much as $12 billion every year since it took effect in 2018, robbing middle-class families of their hard-earned money.”
She added: “Republicans have drained billions directly from the pockets of their own constituents, and now it’s time for them to deliver. No excuses. No half measures. It’s all or nothing – New Yorkers deserve a full repeal.”
What Happens Next
Republicans will hash out their differences on the policy and try to end up on a settled position ahead of Trump taking office on January 20 so that he can hit the ground running on a reconciliation bill that Congress can pass without needing support from Democrats—an especially critical tool for lawmakers due to the extremely narrow majority Republicans hold in the House.
The bill will focus on a range of issues including energy, border security and tax policies, which has given lawmakers with particular policy focuses a chance to make their stand.
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