New York Republicans, led by Congressman Mike Lawler, are pushing to raise the SALT deduction cap, a move that would largely benefit wealthier individuals in high-tax blue states. They aim to pressure House conservatives to include this increase in President Trump's spending bill.
The current $10,000 SALT cap, imposed as part of Trump's 2017 tax cuts, disproportionately impacts residents of high-tax states like New York and California. Lawler's previous attempt to eliminate a perceived “marriage penalty” by raising the limit to $20,000 for couples failed due to conservative opposition. Proposals for a $25,000 cap have been deemed insufficient by some Republicans.
Studies indicate that raising the SALT cap would significantly reduce federal revenues. Lawler's proposed increase to $100,000 for individuals and $200,000 for couples would lead to substantial revenue losses. Even a more modest increase disproportionately benefits the wealthiest 10% of households. The Bipartisan Policy Center's data shows that the SALT deduction is heavily used in blue states.
The tight House majority, consisting of several deficit-conscious conservatives, creates a significant hurdle. While some bipartisan support exists for increasing the SALT cap, it's unclear how much support Lawler will garner among Democrats.