Their next challenge is finding the magic deduction cap limit and selling it to their fiscally conservative colleagues in a 2025 tax bill.
A group of House Republicans from New York, California, and New Jersey departed a meeting with Donald Trump this weekend feeling optimistic that the president-elect will keep his campaign pledge to lift the state and local tax (SALT) deduction cap — a controversial tax write-off that allows individual and married joint filers in high-tax states to deduct $10,000 from their state and local taxes from their federal income taxes.
“The president didn’t back away from the commitment that he made on the campaign trail to fix SALT,” Representative Nick LaLota (R., N.Y.) told National Review on Saturday, a few hours after meeting privately with Trump in Mar-a-Lago alongside 15 other House Republicans and two of the president-elect’s political advisers.
<p”>That $10,000 deduction cap, passed in the 2017 Tax Cuts and Jobs Act, is set to expire at the end of the year. As congressional leaders continue to discuss alternative ways of prioritizing Trump’s legislative agenda, the next challenge for these blue-state House Republicans is finding the magic deduction cap limit and figuring out how to sell it to their fiscally conservative colleagues in a broader tax bill this year. That may be a tough lift given that budget hard-liners see SALT as a mechanism for subsidizing progressive states’ high-tax governance.
Pro–SALT deduction lawmakers who met with Trump this weekend are optimistic that they can rally Trump and congressional Republicans around a SALT deduction cap that falls somewhere between $20,000 and $60,000.
“The very low number would be doubling it from $10,000 to $20,000. And the very high end, where some of the New Yorkers are pushing for, is $100,000,” says Representative Nicole Malliotakis (R., N.Y.), a member of the tax-writing House Ways and Means Committee. Speaking with National Review on Monday afternoon, she praised Trump for working with blue-state House Republicans on the issue and for understanding that “the reason we need SALT relief to begin with” is that the Empire State’s Democratic governor and New York City mayor “treat New Yorkers like ATM machines.”
Negotiators are currently debating different ways to help pay for the cost of lifting the SALT deduction cap. “Do we cap it at a certain income so it truly benefits the middle class?” asks Malliotakis, who also flew to Mar-a-Lago over the weekend to meet with Trump. “Do we index it going forward so it will gradually go up to keep pace with inflation, like the standard deduction does? Do we limit the property tax portion of salt so it can only be applied to your primary residence?”
Red lines are already emerging for LaLota, who also hails from high-tax New York and who maintains that simply doubling the deduction cap won’t be sufficient to win his vote on a broader tax bill. “What I’ve said most recently — when somebody adjacent to the incoming administration offered that a fix might merely be removing the marriage penalty and having a $20,000 cap for joint filers — I communicated that I would be a ‘Hell no’ on a bill that merely did just that,” he reiterated to NR.