House Speaker Mike Johnson is urging Senate Republicans not to make dramatic modifications to the proposed increase in the federal deduction for state and local taxes in President Trump’s “big, beautiful bill.”
Some members of the Senate GOP are not thrilled that the House-approved version of the legislation would raise the existing $10,000 cap on state and local taxes, known as SALT, to $40,000 for taxpayers earning up to $500,000 in high-tax states.
Mr. Johnson said there are a “lot of House members who feel the same way — people from deep red districts in red states.”
“But the reality is, in the House, that our majority is made up by our members who serve in states like California and New York, Republicans elected in very difficult, close districts and they have to provide some relief for their folks,” the Louisiana Republican said on “Fox News Sunday.”
“So, I think we reached a good equilibrium point over more than a year of discussion, negotiations, and planning,” Mr. Johnson said. “We balanced the interests of a very diverse Republican caucus.”
Mr. Trump’s “big, beautiful bill” contains sweeping tax and spending cuts, funding for border security and national defense, and policy changes designed to spur American energy production. It also includes the SALT changes.
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Residents in high-tax states prize SALT deductions because they can recoup some of their money from the federal government. The deductions were created in 1913 when the federal income tax was established to prevent double taxation.
The deductions have been tweaked throughout the years. In 2017, as part of the Trump tax cuts, SALT deductions were reduced and capped at $10,000 to help pay for the broader tax.
Senate Republicans will now have a crack at the proposal and have signaled that the SALT deduction is not a priority.
Sen. Kevin Cramer, North Dakota Republican, drove home the point, telling reporters: “There’s not one Republican in the United States Senate who gives a s‑‑‑ about SALT.”
“Having said that, what does matter is 218 votes in the House, and we want to be cognizant about that,” Mr. Cramer said, according to The Hill.
On Sunday, Mr. Johnson said he reminded the Senate GOP in a luncheon this week to recognize that “we are one team here.”
“I encouraged them to modify the package we sent over there as little as possible because we have to maintain that balance, and it is a very delicate thing,” he said. “But I think we will get this job done.”
