House Republicans are proposing to raise the state and local tax (SALT) deduction cap to $30,000, up from its current rate of $10,000. The move was announced on Monday by the House Ways and Means Committee, chaired by Rep. Jason Smith, R-Mo.
The deduction would apply to single and joint filers who make $400,000 or less per year. The move would be a huge win for Republican members of Congress in blue states, who stand to benefit the most from the raise, given that blue states usually have higher state income tax rates.
The change in tax policy is expected to be hotly debated, given that some Republicans view the tax deduction as ultimately a form of federal subsidizing of blue state taxation policies. The tax policy will be discussed in the House Ways and Means Committee, which will have markups at 2 p.m. Tuesday.
The fight over the controversial tax deduction is anticipated to last until the floor vote on the Republicans’ tax legislation next week.
“There’s no set number yet. That’s the whole thing. This is still being resolved,” House Speaker Mike Johnson, R-La., explained after a meeting with some House Republicans from blue states and members of the House Ways and Means Committee.
As The Daily Signal previously reported, the deduction, while triple the current cap, is still receiving pushback from some congressional Republicans.
“New Yorkers already send far more to Washington than we get back—unlike many so-called “low-tax” states that depend heavily on federal largesse,” a joint statement from New York Republican Reps. Elise Stefanik, Andrew Garbarino, Nick LaLota, and Mike Lawler said in part.
Some Republicans from blue states have instead conveyed to House leadership that they would like to see a SALT deduction of $62,000 for single earners and $124,000 for joint filers.
“Still a hell no,” LaLota said, in a reply to a post about the new deduction cap.
Johnson has said his goal is to have the entire budget reconciliation bill voted on in the House before Memorial Day.
The debate over taxes comes as House and Senate leadership are also facing pressure to cut federal spending. On Saturday, House Republicans proposed cutting $900 billion over 10 years through reforms of Medicaid. That has also faced pushback, including from Sen. Josh Hawley, R-Mo., who argued in an op-ed published on Monday in The New York Times that the cuts would harm working-class voters who President Donald Trump was elected to represent.
