Speaker Mike Johnson (R-LA) and a moderate Republican are currently working on a potential adjustment to the state and local tax (SALT) deduction limit.
According to sources, the proposed plan aims to raise the SALT deduction cap for households earning below $500,000 to $40,000, a significant increase from the current $10,000 limit. Additionally, this amount is expected to rise by 1% annually over the next decade.
The measure would also increase the existing cap from $30,000 and currently holds an income limit set at $400,000. Members of the Salt Caucus have expressed strong opposition to this provision. The House Rules Committee is set to meet at 1 AM Wednesday to discuss possible amendments to the bill.
While several members of the Salt Caucus are on board with the proposal, sources indicate that Johnson must find a way to persuade more conservative members, particularly those within the House Freedom Caucus, who are hesitant about significantly raising the SALT deduction cap.
After a meeting at the speaker’s office on Tuesday night, members of the Salt Caucus mentioned they have made notable headway, although a solid agreement has not yet been reached.
“We’re no longer in a completely different realm than we were a few days ago. We’re at least in the same ballpark now,” stated Rep. Nick Larota (R-NY) to reporters.
Nonetheless, Johnson’s negotiations with the Salt Caucus mark a vital advancement toward passing what some call the party’s “big and beautiful bill.” The discussions among lawmakers from high-tax blue states and moderate Republicans have been ongoing for weeks as they seek common ground on this complex and often tedious topic.
Rep. Elise Stefanik (R-NY), who is considering a run for governor, has become more involved in these discussions, stepping in after previously withdrawing from the UN ambassador appointment. She reportedly urged Johnson to adopt the $30,000 figure. In a joint statement with fellow New York Republicans Mike Lawler, Andrew Garbarino, and Larota, she expressed support for that figure.
However, she did not join in a statement with five key Salt Republicans following Trump’s visit to Capitol Hill on Tuesday.
Trump encouraged lawmakers to “let go of the SALT” and voiced his support for the $30,000 cap, asserting that it would benefit “the Democrat governor.” He laid out a clear directive for those advocating for significant changes to SALT deductions.
In response to Trump’s remarks, Lawler maintained his stance shortly afterwards, stating he was “not tired of it.”
Yet, later that day, following a Salt Caucus meeting in the Speaker’s office, Lawler mentioned that GOP leaders had presented “improved offers” to Salt Caucus members and that lawmakers were anticipating cost estimates from the Tax Commission.
