House Republicans revealed the legislative text of their comprehensive tax proposal for President Donald Trump’s agenda on May 10. However, they postponed a decision on how much to increase the cap on the deduction for state and local taxes (SALT). Speaker Mike Johnson, R-La., led a video call with members of the tax-writing Ways and Means Committee and the SALT Caucus, a group of blue-state Republicans advocating for a higher SALT cap than the current $10,000 level. Despite discussing various proposals, GOP lawmakers failed to reach a consensus on the exact amount. House Ways and Means Committee Chair Jason Smith, R-Mo., announced the committee’s portion of the GOP bill, proposing to raise the SALT deduction cap to $30,000 for those earning over $400,000 annually. However, members of the SALT Caucus, including Reps. Nick LaLota, R-N.Y., Elise Stefanik, R-N.Y., and Young Kim, R-Calif., rejected this figure. Concerns have been raised that if the $30,000 SALT cap remains, there may be enough GOP votes against the bill. Despite the disagreement, Smith plans to proceed with the bill’s markup on Tuesday. The issue of SALT has caused tension between Johnson and Smith, with Smith stating that it is Johnson’s responsibility to negotiate with the SALT Caucus. Pro-SALT Republicans supported a $62,000 cap for individual filers and a $124,000 cap for joint filers, but it remains uncertain if all members are committed to this figure. The broader tax plan also includes eliminating federal taxes on tips and overtime until 2028, creating a tax break for auto loan interest payments, and does not involve a tax increase for the wealthy, despite Trump’s personal request to add one during a recent phone call.
The current rate of 37% faced opposition from anti-tax Republicans when Trump proposed changing it.
