Congressional discussions on tax reform are underway, and one of the most closely watched issues is the potential increase of the cap on the state and local tax (SALT) deduction. On April 10, 2025, Representative Jeff Van Drew of New Jersey said he believes the final agreement may raise the SALT deduction cap to $30,000 per individual.

“$30,000 is fine for me,” Van Drew said, noting that figure is a likely outcome. The current cap, set at $10,000 under the 2017 tax law, has been a point of contention, particularly for lawmakers representing high-tax states such as New Jersey, New York, and California. Critics argue that the cap disproportionately impacts their constituents, many of whom face high property taxes and state income taxes.

The future of the SALT deduction is expected to be a key component of the broader tax reform package being shaped by congressional Republicans and members of the Trump administration. As lawmakers work to renew elements of the 2017 tax law and consider additional tax relief measures, the structure of the SALT deduction remains a significant topic in negotiations.

Some lawmakers have stated that they will withhold support for any tax package that does not include meaningful changes to the SALT cap. Van Drew emphasized that moderate members of Congress, especially those from competitive districts, will continue to advocate strongly for issues like SALT relief and protecting funding for essential programs.

On April 10, 2025, the House passed a budget resolution that paves the way for formal drafting of the tax legislation. While this is a procedural step, it clears the path for both the House and Senate to begin shaping the details of a proposed tax package that could total $5.3 trillion in cuts and policy changes.

A preliminary draft of the legislation includes a potential increase of the SALT cap to $25,000 for individuals. However, some House members view that level as insufficient and are pushing for a higher threshold. Van Drew’s suggested $30,000 cap reflects a possible compromise position that could satisfy a range of lawmakers, though no final decision has been made.

As discussions continue, lawmakers face a difficult balancing act. They must weigh competing priorities, including tax relief for individuals and businesses, new deductions, and proposed eliminations of taxes on tips and overtime pay. At the same time, they must identify ways to offset the cost of the package to meet budgetary goals and maintain support among fiscal conservatives.

With many details still undecided and negotiations ongoing, members of Congress are expected to continue working through the summer to find common ground. The final shape of the tax bill—including the fate of the SALT deduction cap—will depend on those efforts and the ability of lawmakers to bridge regional and ideological differences within both chambers.

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