House Republicans Clash Over SALT Tax Deduction in Major Proposal

WASHINGTON — House Republicans unveiled the legislative text of their expansive tax proposal on Monday, but a significant divide remains regarding enhancements to the state and local tax deduction, commonly referred to as SALT.

During a video call, Speaker Mike Johnson, R-La., met with members of the tax-writing Ways and Means Committee and the SALT Caucus, which includes Republicans from high-tax states advocating for a substantial lift from the current $10,000 cap. Despite multiple discussions, consensus on the SALT figure was not reached.

In a GOP conference call later that day, Rep. Jason Smith, R-Mo., chair of the Ways and Means Committee, informed colleagues that the SALT number was still a work in progress. The current legislative text proposes increasing the SALT cap to $30,000, with restrictions for those earning over $400,000 annually. However, members like Reps. Nick LaLota, Elise Stefanik, Mike Lawler, and Young Kim argued this proposed cap was unacceptable.

Lawler expressed his firm stance, stating, “I will not support any bill that does not adequately lift the cap on SALT. This bill as written fails to deliver and will not have my support.” LaLota echoed these sentiments, stating “Still a hell no.”

Republicans can only afford three defections for the bill to pass in the House, and several are already indicating that they will not support the current proposal without further SALT adjustments. Johnson faces the challenging task of negotiating a deal on SALT before a full House vote next week.

The tensions around the SALT deduction are compounded by disagreements between Johnson and Smith, with Smith asserting that the negotiation with SALT Caucus members falls to the Speaker’s responsibility. Proponents of raising the SALT cap to $62,000 for individuals and $124,000 for joint filers expressed hopes for compromise.

Rep. Nicole Malliotakis, R-N.Y., a member of the Ways and Means Committee, supported the SALT increase proposal, citing it would provide substantial relief to middle-class families in her district.

Meanwhile, the broader tax plan aims to extend tax reforms that Trump signed into law in 2017, eliminating federal taxes on tips and overtime until 2028 and introducing tax relief for auto loan interest.

The proposed legislation doesn’t include a tax hike for high-income earners, despite Trump’s previous suggestions to increase tax rates for the wealthy. Democrats criticized the $30,000 SALT cap, calling it inadequate, particularly for constituents from high-tax states like New York.