The goal for blue-state House Republicans is to find a strategy to pitch a new deduction cap as a win for their middle-class constituents.
Quick reconciliation update: Later today, members of House GOP leadership will host a meeting for members to privately discuss this year’s tax bill as cracks begin to emerge in how blue-state House Republicans are approaching the expiring state and local tax (SALT) deduction. The $10,000 tax write-off for individual and joint married filers is beloved by GOP lawmakers in high-tax states.
A group of the five self-proclaimed SALT-iest Republicans — Representatives Tom Kean (N.J.), Young Kim (Calif.), Mike Lawler (N.Y.), Andrew Garbarino (N.Y.), and Nick LaLota (N.Y.) — have agreed to “have each other’s backs to ensure that we get the best fix possible for SALT,” LaLota told National Review in a Wednesday morning interview.
The takeaway: If these five Republicans stick together as a bloc, it will be tough for congressional GOP leaders to pass any tax bill without their united support. Recall that representatives from high-tax states voted against Donald Trump’s 2017 Tax Cuts and Jobs Act because it curtailed the SALT deduction.
As National Review reported earlier this week, pro-SALT-deduction Republicans left their meeting with President-elect Donald Trump at Mar-a-Lago over the weekend feeling optimistic that they can rally him and congressional Republicans around a compromise. Most fiscal hawks in the House GOP conference see the deduction as unfairly subsidizing high-tax schemes in deep-blue states.
The goal here for blue-state House Republicans is to find a strategy to pitch a new deduction cap as a win for their middle-class constituents.
“There are two different approaches being talked about right now,” LaLota says. The first is to simply increase the cap well above its current $10,000 deduction limit. “The second one is some sort of income approach that would essentially be unlimited for everybody under a certain income.” In this New Yorker’s view, “the onus is on the Ways and Means Committee to figure out what they’re calling pay-fors, it’s not up to the SALT-y Republicans to figure out how to pay for it.”
Pressed on whether this bloc of five House Republicans is considering repealing the business SALT deduction, LaLota kept his powder dry: “Any proposal I review will be carefully considered with a focus on stimulating the overall economy and delivering meaningful tax relief for my middle-class constituents.”