Republican lawmakers representing blue states are engaged in intense private negotiations over potential changes to the state and local tax (SALT) deduction, with proposals ranging from $30,000 to as high as $100,000. Their aim is to secure inclusion of the provision in President Trump’s sweeping new tax legislation, sources told The Post.
On Wednesday, GOP representatives from states like New York, New Jersey, and California met with House Speaker Mike Johnson of Louisiana and House Ways and Means Committee Chair Jason Smith of Missouri. The group discussed potential figures to propose as a new cap on SALT deductions as part of a massive tax reform bill expected to total several trillion dollars.
According to three individuals briefed on the meeting, lawmakers floated multiple figures — $30,000, $40,000, and $60,000 were discussed — while some pushed aggressively for a $100,000 threshold, insisting on “$100,000 or bust.”
Representative Jeff Van Drew of New Jersey has previously voiced support for a $30,000 limit per filer, calling it “a good number” and “still reasonable.”
One Republican from California, who was not named, is said to have proposed a $60,000 cap, which mirrors a past proposal by Long Island Representative Nick LaLota. LaLota’s bill would have allowed single filers to deduct up to $60,000 and joint filers up to $120,000.
Congressman Mike Lawler of Rockland County is backing an even more generous proposal — $100,000 for individual filers and $200,000 for married couples. His plan would also eliminate what’s been referred to as the “marriage penalty,” where the cap was previously the same for both single and joint filers.
The SALT deduction is currently capped at $10,000 for both individuals and couples, a limit put in place by the 2017 Tax Cuts and Jobs Act signed by President Trump. That cap is due to expire at the end of this year unless Congress acts.
Representative Nicole Malliotakis of Staten Island and other colleagues have criticized the current cap as being insufficient, saying even a $20,000 limit wouldn’t adequately support the middle class.
“We’re working on identifying a number that will cover the middle-class families we represent,” Malliotakis said.
“It’s going to come down to what provides relief for the middle-class, what can we get consensus on in the committee and what is palatable for the entire conference,” she added.
“The president, the speaker, Chairman Jason Smith and my colleagues on the [Ways and Means] committee — they understand the dilemma facing New York members.”
The committee is aiming to finalize the details of the tax overhaul next week, with Treasury Secretary Scott Bessent targeting July 4 as the deadline for passage.
Bessent warned reporters on Tuesday that failure to pass what he called the “big, beautiful” legislation — which also allocates funds for defense and border protection — could have dire consequences: “If it doesn’t pass, we’ll have the largest tax hike in history.”
If the $10,000 SALT cap remains permanent, the nonpartisan Tax Foundation estimates that more than $1 trillion could be added to the federal deficit over the next decade.
Meanwhile, the Committee for a Responsible Federal Budget projected that Lawler’s proposal of $100,000 for single filers and $200,000 for couples could cut an additional $1 trillion in revenue by 2035.
Several elements of the tax bill still need review by the Joint Committee on Taxation and the Congressional Budget Office (CBO) to ensure that it can be approved through reconciliation, a process that allows it to pass the Senate with a simple majority of 51 votes.
“Our final bill will not only extend the 2017 tax relief for hardworking Americans, it will make it permanent,” said Senate Majority Leader John Thune of South Dakota during remarks on the Senate floor Tuesday.
Speaker Johnson remains hopeful that the full legislation can be sent to the president before Memorial Day.
{Matzav.com}