WASHINGTON — A group of five influential House Republicans from high-tax states is threatening to hold up a major tax package unless they get a significant boost to the state and local tax (SALT) deduction cap.
The Republicans, who make up a four-seat majority in the House, are demanding a significant increase in the SALT cap, currently set at $10,000, to reflect state and local taxes already paid. They are planning to use their leverage to block any broader tax cut package unless their demands are met.
The group, which includes Representatives Nick LaLota, Mike Lawler, Tom Kean Jr., Young Kim, and Andrew Garbarino, are seeking a minimum of $30,000 per year in deductions, with LaLota calling the current proposed increase of $20,000 a “nonstarter.”
President-elect Donald Trump has promised the lawmakers that he will back their efforts to raise the SALT cap, and they are set to meet with him again to discuss the issue. However, the broader SALT caucus still needs to win over hundreds of their fellow Republicans who oppose lifting the cap, citing concerns that the benefits will mostly accrue to wealthier Americans.
Opponents of the SALT cap hike argue that it could add billions of dollars to the cost of any tax bill, depending on how it is structured, and that households with incomes in the top 20% would disproportionately benefit.
The SALT caucus, on the other hand, argues that the current SALT cap was unfairly implemented and that it hurts middle-class families in high-tax states. Garbarino, a New York Republican, emphasized that his constituents are not wealthy, but are middle-class individuals who were disproportionately affected by the 2017 tax law.