SALT Deduction Sparks GOP Infighting Over Trump’s Tax Bill

Tensions are escalating within the Republican Party as lawmakers grapple with the State and Local Tax (SALT) deduction in President Donald Trump’s upcoming tax bill. The controversy centers on a proposed increase to the SALT deduction cap, a provision that has ignited a fiery debate between Republicans representing districts in high-cost-of-living states and those who argue against subsidizing what they deem as fiscally mismanaged states.

The SALT deduction allows taxpayers to deduct certain state and local taxes, such as property taxes and income taxes, from their federal income tax liability. The 2017 Tax Cuts and Jobs Act, signed into law by President Trump, capped the SALT deduction at $10,000 for both single filers and married couples. This cap disproportionately affected residents in states with high state and local taxes, such as New York, California, and New Jersey.

Now, as Republicans work to advance Trump’s agenda through budget reconciliation, a process that allows them to pass legislation with a simple majority in the Senate, the SALT deduction has emerged as a major sticking point. Republican lawmakers representing high-cost-of-living areas have been pushing for an increase to the cap, arguing that it is essential for their constituents and a matter of fairness.

However, their efforts have been met with resistance from other Republicans who believe that raising the SALT deduction would primarily benefit wealthy homeowners in affluent areas and would unfairly burden taxpayers in lower-tax states.

House SALT Caucus Rejects $30,000 Offer

The division within the Republican Party was on full display when leaders of the House SALT Caucus emphatically rejected what they described as an offer from GOP leaders to raise the SALT deduction cap to $30,000. In a statement, Reps. Mike Lawler, Nick LaLota, Elise Stefanik, and Andrew Garbarino, all Republicans from New York, expressed their disappointment with the proposed offer.

"We’ve negotiated in good faith on SALT from the start— fighting for the taxpayers we represent in New York," the statement said. "Yet with no notice or agreement, the Speaker and the House Ways and Means Committee unilaterally proposed a flat $30,000 SALT cap — an amount they already knew would fall short of earning our support."

The lawmakers argued that the $30,000 cap was "insulting" and risked derailing President Trump’s "One Big Beautiful Bill." They emphasized that New Yorkers already send far more to Washington than they receive back, unlike many "low-tax" states that depend heavily on federal largesse.

"A higher SALT cap isn’t a luxury. It’s a matter of fairness," the statement concluded. "We reject this offer."

Not All New York Republicans Agree

While the House SALT Caucus rejected the $30,000 cap, not all New York Republicans are on the same page. Rep. Nicole Malliotakis, whose district spans a sliver of south Brooklyn and all of Staten Island, told Fox News Digital that she could support a $30,000 cap.

"Everyone needs to advocate for the needs of their district," Malliotakis said. "Tripling the deduction to $30,000 will provide much-needed relief for the middle-class and cover 98% of the families in my district."

Malliotakis’s willingness to support the $30,000 cap highlights the complex political dynamics at play. While some Republicans are holding firm on their demand for a higher cap, others are more willing to compromise in order to move forward with Trump’s tax bill.

Speaker Johnson Downplays Commitment to $30,000

Amid the conflicting statements and speculation, Speaker of the House Mike Johnson’s office sought to downplay any firm commitment to the $30,000 cap. Press secretary Athina Lawson wrote on X, "To add vital, missing context: What the Speaker actually said is this is one number among others in ongoing discussions amongst members."

Lawson referenced comments Johnson made to reporters, in which he said, "I’ve heard that number, and I’ve heard others as well. It’s still an ongoing discussion amongst the members. I’m not going to handicap it because I’m not sure exactly what that is, but there’s a lot of analysis that’s going into it."

Johnson’s remarks suggest that the $30,000 cap is still under consideration, but that no final decision has been made. The ongoing discussions among Republican lawmakers indicate that the issue remains highly contentious.

Republicans Divided Over Fairness and Fiscal Responsibility

The debate over the SALT deduction has exposed deep divisions within the Republican Party over issues of fairness, fiscal responsibility, and regional interests.

Republicans in high-cost-of-living states argue that the SALT deduction cap is unfair to their constituents, who already pay a disproportionate share of federal taxes. They contend that raising the cap is necessary to provide tax relief to middle-class families and to ensure that their states receive a fair return on their federal tax dollars.

On the other hand, Republicans from lower-tax states argue that raising the SALT deduction would primarily benefit wealthy homeowners in affluent areas and would unfairly burden taxpayers in states with lower taxes. They contend that the SALT deduction subsidizes fiscally irresponsible states that have high levels of spending and debt.

Marc Short, an alumnus of Trump’s first administration who played a key role in the 2017 tax negotiations, echoed this sentiment. "I think from a tax perspective, what’s unfair about that is you’re basically taking much of middle America that live in states that are better governed and asking them to subsidize the residents in states that are poorly managed and continue to generate huge deficits," Short said.

High Stakes for Vulnerable Republicans

The SALT deduction issue is particularly important for vulnerable Republicans in high-cost-of-living states, whose seats are key to Republicans holding onto their slim majority in the House. These lawmakers face intense pressure from their constituents to deliver on SALT relief, and their political futures may depend on their ability to secure a favorable outcome in the tax bill negotiations.

The Republican margin is so small in the House that a handful of New England Republicans have a lot of sway over this bill and are pushing to raise that deduction.

Uncertainty Looms Over Tax Bill

As the House Ways & Means Committee prepares to unveil its portion of the tax bill, the future of the SALT deduction remains uncertain. The deep divisions within the Republican Party, coupled with the high stakes for vulnerable lawmakers, make it difficult to predict the final outcome.

The debate over the SALT deduction highlights the challenges of crafting tax policy that is both economically sound and politically palatable. As Republicans navigate these challenges, they must weigh the competing interests of their constituents, the needs of the country, and the legacy of President Trump’s tax agenda.