House Speaker Mike Johnson Negotiates SALT Tax Deduction Deal

Washington, D.C. — House Speaker Mike Johnson and a group of Republican lawmakers from blue states have reached a tentative agreement to increase the state and local tax deduction (SALT) cap to $40,000. The deal, confirmed by Republican sources to Fox News late Tuesday, raises the cap from the previous limit of $30,000.

This new cap applies to households with annual incomes below $500,000. The SALT deductions primarily benefit individuals in high-cost areas like New York City and Los Angeles. Republicans from these states are advocating for the increase as a vital measure to retain the party’s majority in the upcoming 2026 midterm elections.

Despite the progress, it remains uncertain whether the hardline GOP members who are opposed to raising the SALT cap will support the measure. This tentative agreement follows intense discussions among party factions regarding tax policies, Medicaid, and green energy subsidies as they draft President Biden’s so-called “big, beautiful bill.”

Some Republicans from lower-tax states express concerns that raising the SALT deductions may incentivize residents to remain in blue states, potentially impacting the party’s broader strategy. The situation continues to evolve as further negotiations unfold.

For more updates on the SALT cap and other political developments, stay tuned.