U.S. Rep. Josh Gottheimer (D-N.J.) speaks during a press conference about the SALT Caucus outside the U.S. Capitol in Washington, DC, Wednesday, February 8, 2023.
Matt McClain | The Washington Post | Getty Images
House lawmakers, using former President Donald Trump’s own comments as leverage, are urging their colleagues to preserve the state and local tax deduction, a fight that is expected to escalate into next year.
salt deduction Taxpayers can deduct up to $10,000 in property, sales and income taxes they’ve already paid to state and local governments. Historically, most taxpayers who claim the credit have lived in high-tax states, such as New York, Connecticut, New Jersey and California.
However, the SALT cap became law after President Trump signed the $1.5 trillion tax reform bill in 2017 and adopted the new deduction as a form of payment. There was no SALT cap prior to the Trump tax reform bill.
House lawmakers are strategizing about how to preserve the unlimited SALT tax deduction in the next Congress, as the SALT cap provisions of the Trump tax bill are set to expire on November 1, 2019. December 31, 2025.
If Trump is re-elected and Republicans gain control of both houses of Congress, some House Republicans are urging party leaders to consider alternative ways to pay for Trump’s tax proposal, such as lowering the corporate tax rate from 21% to 15%, according to Rep. Andrew Garbarino of New York.
Some of the recent conversations have focused on President Trump’s new stance on restoring the SALT deduction in full, despite the legislation that led to the $10,000 cap.
Garbarino said he and Reps. Anthony D’Esposito (R-N.Y.) and Nick LaLota (R-N.Y.) met with House Ways and Means Committee Chairman Jason Smith (R-Missouri) on Capitol Hill just Tuesday to discuss the need to fully reinstate the SALT deduction.
During the meeting, three New York Republicans pointed to a promise Trump posted on social media to “bring back SALT” if he becomes president as a way to encourage Smith not to make major changes to the SALT deduction, which expires at the end of next year.The House Ways and Means Committee is responsible for writing and helping pass tax legislation.
“he [Trump] Garbarino spoke to CNBC about his recent proposal to Smith, saying the House Ways and Means chairman said, “‘Guys, we’re going to do all kinds of things. [pay for] “There are a lot of options,” Garbarino said.
Republican Rep. Young Kim of California told CNBC that the SALT cap is “painful” to his constituents and that President Trump’s recent views on SALT show he is listening to “Americans across the country who are suffering because of the SALT cap.”
“We definitely intend to participate in the 2025 tax reform debate,” Kim said, noting that lawmakers in states that rely on SALT also want to preserve the original deduction in the next legislative session.
Garbarino estimated there are at least a dozen House Republicans who would not support a tax bill with a $10,000 SALT cap and said they would at least fight to raise the cap to a higher level.
Some House Democrats have their own plans to restore and preserve the standard SALT deduction after the cap expires, according to Rep. Josh Gottheimer (DN.J).
The New Jersey congressman said in an interview with CNBC that he wants the SALT cap to expire in 2025, and that key votes in the House of Representatives between Democrats and Republicans from states that use the full SALT deduction would block passage of a bill that would keep the cap in place.
“If Democrats have a five-seat majority, they could rally enough supporters from SALT states to fully restore the deduction and lower taxes for middle-class families,” Gottheimer said. “It’s going to be a tough fight.”
