Alright, let’s dive into the drama unfolding in the House of Representatives. House Republicans recently rolled out their big tax proposal to support President Donald Trump’s agenda. However, there’s a major snag causing a rift within the party: the debate over how much to raise the cap on state and local tax deductions, aka SALT. The SALT Caucus, a group of blue-state Republicans, is pushing for a higher cap than the current $10,000, but they can’t seem to agree on a number.
The Speaker of the House, Mike Johnson, huddled with members of the tax-writing Ways and Means Committee and the SALT Caucus in a video call on Monday morning. Despite discussing several proposals, the GOP lawmakers couldn’t come to a consensus on the SALT cap. The legislative text proposes raising the cap to $30,000, with limits for those earning over $400,000 a year. However, members of the SALT Caucus, including Reps. LaLota, Stefanik, Lawler, and Kim, are not on board with this number. In fact, one Republican insider even hinted that there might be enough GOP votes to sink the bill if the $30,000 figure sticks around.
As tensions rise, Rep. Smith is moving forward with a markup in his committee starting Tuesday afternoon. This puts Speaker Johnson in a tough spot as he tries to strike a deal on SALT before a final floor vote next week. The clash between Johnson and Smith is evident, with Smith stating that it’s not his job to negotiate with the SALT Caucus, but rather the Speaker’s responsibility. The Speaker, however, did not commit to mediating the issue directly. The pro-SALT Republicans are standing firm on their demands, with some supporting a $62,000 cap for individual filers and a $124,000 cap for joint filers. But the group as a whole has been wishy-washy on a specific number throughout the process.
Rep. Malliotakis, the lone SALT member on the Ways and Means Committee, has thrown her support behind the $30,000 cap, citing relief for middle-class families in her district. This move suggests that Smith may have enough votes to push the bill out of the committee, leaving Johnson to amend the legislation to secure full House approval. Despite Trump’s personal push to raise taxes on the wealthy, the GOP’s plan does not include this provision, facing opposition from anti-tax Republicans. Democrats from high-tax states like New York are criticizing the $30,000 cap as insufficient, calling on Republicans to honor their promises. It’s a political showdown that could have significant implications for Trump’s tax agenda.
