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House Republicans from high-tax states such as New York, California, and New Jersey are urging adjustments to the state and local tax (SALT) deduction cap, describing recent discussions with President-elect Donald Trump as “positive” but without firm commitments. The $10,000 cap, part of the 2017 Tax Cuts and Jobs Act, has been a point of contention for representatives from states with high property values and tax rates.


Seeking Relief for High-Tax States: Representative Nick LaLota of New York, who attended a meeting of about 16 House Republicans at Trump’s Mar-a-Lago resort, noted that the president-elect expressed understanding of the tax burden faced by constituents in these states. “He communicated that he feels for how unaffordable the taxes are for our constituents and is willing to engage in a solution,” LaLota said.


Representative Mike Lawler, also from New York, described the meeting as “productive,” stating on Fox News’ Sunday Morning Futures that Trump supports raising the SALT cap. However, no specific level or approach has been determined. Lawler has proposed increasing the cap to $100,000 for individuals and $200,000 for married couples, far above the current uniform $10,000 limit.


Trump’s Stance and Proposals: While Trump has expressed interest in revisiting the SALT cap, he has not endorsed any specific plan. His economic advisors have floated a more modest expansion of the cap to $20,000, noting that any tax changes would need to include offsets to avoid increasing the federal deficit.


Diverging Views Within the GOP: Efforts to adjust the SALT deduction cap face opposition from some conservative Republicans, particularly from lower-tax states. Critics argue that lifting the cap disproportionately benefits higher-income households in Democratic-leaning states. Senator Lindsey Graham of South Carolina, for example, questioned why residents of lower-tax states should effectively subsidize the tax policies of states like California and New York. “You’re going to have a hard time with me on that,” Graham said.


Lawler countered this perspective, pointing out that states like New York and California contribute significantly more to federal revenue compared to what they receive in return. “If you look at South Carolina, for instance, they are one of the biggest recipients of federal dollars in comparison to other states,” Lawler argued.

Implications for Future Legislation: Raising or eliminating the SALT cap has emerged as a potential demand from some Republicans, including Lawler, in exchange for their support of broader tax legislation. With the GOP holding a slim majority in the House, Speaker Mike Johnson can afford only a small number of defections on party-line votes.


As the SALT cap is set to expire after 2025, discussions over its future will likely intensify. Trump’s willingness to explore solutions could signal a shift, but achieving consensus among Republicans from diverse states may prove challenging. For now, the issue remains a key point of negotiation in the broader tax reform debate.


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