


Republicans in the Senate are reportedly plotting changes to the cap on state and local tax deductions included in the version of the One Big Beautiful Bill Act passed by the House.
Senate Republicans met on Wednesday and discussed the $40,000 SALT cap, among other provisions in the reconciliation bill, that was included in the House version. Many in the Senate have argued that the House’s $40,000 limit for people making up to $500,000 is far too generous.
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Sen. Thom Tillis (R-NC) told Bloomberg on Wednesday that $30,000 is being considered a compromise.
Notably, SALT Republicans in the House have dug in their heels on the level negotiated in the House. They rejected an offer of $30,000 when negotiations were ongoing on the House side.
The current $10,000 cap on SALT deductions was implemented as a revenue-raising measure in the 2017 tax overhaul passed by Republicans and signed by President Donald Trump. The legislation passed in the House last month would lift the cap to $40,000 for married couples, with a $500,000 income limitation.
During negotiations in the House, lawmakers from high-tax states, such as Reps. Mike Lawler (R-NY) and Nick LaLota (R-NY), rebuffed the Ways and Means Committee’s initial offer of $30,000, which passed out of the committee.
Since the House bill passed, several Republican senators have mused about lowering the cap.
“I think there’s going to have to be some adjustment,” Senate Majority Leader John Thune (R-SD) recently said. “You know, senators just are in a very different place, as you know, than the House is on that.”
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SALT Caucus members have preemptively warned that any change risks unraveling the bill once it gets back to the House.
“In New York, you’d call it a third rail,” Rep. Nicole Malliotakis (R-NY) said. “And if you mess with SALT, you’re messing with the entire legislation.”