Intensifying GOP Dispute over 'SALT' Tax Exemption Complicates Trump Legislative Proposal
HILLARYVILLE - Here's the lowdown on the heated internal battle brewing among the Grand Old Party (GOP) over a contentious tax break that's crucial for pushing through Prez Donald Trump's legislative wishlist**.
The last seven days have seen endless meetings and discussions with no concrete resolution in sight regarding the state and local tax deduction, famously known as "SALT". This deduction allows filers to write off up to $10,000 in taxes paid to state and local governments. With the House adjourning for the week on Thursday, Republican legislators on opposite ends of the spectrum continue to spar over whether to raise the current $10,000 maximum set by the 2017 Trump tax cuts.
Pro-SALT Republicans argue that increasing the cap to $15,000 for individuals and $30,000 for married couples is not enough. Party leaders are considering a higher cap, scrapping the "marriage penalty", and possibly an income threshold to limit the deduction to the middle class, according to GOP lawmakers and folks in the know about the negotiations.
A consensus within the GOP's slim House majority remains elusive. This topic is touchy after several Republicans in high-tax areas lost re-election races in 2018 following their backing of the 2017 tax law that imposed the $10,000 cap. Since then, several new lawmakers who promised to lift that cap have won re-election. However, boosting the cap would be expensive and add complications to the rest of the bill that also seeks to boost funding for immigration enforcement, the military, and raise the debt limit.
SALT is just one of many bone-of-contention issues in the package, but it's the most unique. Many Republicans couldn't care less about the deduction and are happy to avoid expanding it. However, there's no way to pass a bill without catering to the roughly dozen Republicans in New York, New Jersey, and California who have made it a red line.
Rep. Nicole Malliotakis, R-N.Y., the only "SALT Caucus" member on the tax-writing Ways and Means Committee, said she briefed her fellow committee members Thursday morning on negotiations following a SALT-focused meeting a day earlier with Speaker Mike Johnson, R-La.
While a final deal on numbers hasn't been reached yet, discussions center around limiting the SALT deduction to families earning less than $400,000 per year. Malliotakis said the new cap could be raised slightly above $25,000.
"There's a general consensus that we've got no interest in supporting millionaires and billionaires, and this needs to be targeted relief for middle-class families," Malliotakis, who represents Staten Island and part of Brooklyn, told reporters. "That's what this comes down to - what number can provide the most relief for middle-class families that is acceptable to other members of the conference."
She said the issue won't be resolved this week, but sounded hopeful that they'll ultimately get "something real approved by the committee."
"We're going over all the menu of options," Malliotakis said, "and eventually we'll get to the right number."
If Trump's tax cuts expire, the SALT cap would reset to infinity, at a cost of $1.2 trillion over a decade, according to the Committee for a Responsible Federal Budget, a Washington research group advocating for lower deficits. The GOP leaders aim to contain the price tag of any SALT policy to make room for other priorities.
The Ways and Means Committee hasn't released the text of its bill or scheduled a hearing to vote on sending it to the floor, although House GOP leaders want it done next week to adhere to their schedule of passing the entire package out of the chamber by Memorial Day.
Insight: The battle over the SALT deduction is a key component of Trump's tax reforms, with ongoing discussions about raising the $10,000 cap to offer some relief to middle-class families in high-tax states. However, divisions within the GOP remain, and the final decision may depend on budget constraints and procedural rules for tax legislation.
- The Grand Old Party (GOP) is locked in a heated internal debate over a contentious tax break, known as the SALT deduction, essential for pushing through President Donald Trump's legislative agenda.
- The SALT deduction, which allows filers to write off up to $10,000 in taxes paid to state and local governments, has been a point of contention for seven days, with no resolution in sight.
- Republican legislators are arguing over increasing the current $10,000 maximum set by the 2017 tax cuts, with some pushing for a higher cap, while others are content with maintaining the status quo.
- Funding for immigration enforcement, the military, and raising the debt limit are also part of the package, making budget constraints a significant concern.
- Policy-and-legislation decisions regarding the SALT deduction are heavily influenced by politics, with the few Republicans in New York, New Jersey, and California being key players.
- The final decision on the SALT deduction is still uncertain, with discussions centered around limiting the deduction to families earning less than $400,000 per year, and the issue is not expected to be resolved this week, but potentially by Memorial Day.
