GOP House Swing Votes Balk at $25,000 SALT Cap Tax Pitch (1)

Key House Republicans are pledging to oppose their party’s tax bill if it increases a write-off for residents of high-tax states by just $15,000 per filer, complicating lawmakers’ bid to advance the signature legislation.

Rep. Mike Lawler (R-N.Y.) in a post on X rejected a proposed increase of the $10,000 limitation on the federal deduction for state and local taxes—known as SALT—to $25,000.

"$25,000 is woefully insufficient and does not provide the needed tax relief our constituents deserve,” Lawler wrote. “Any tax bill that does not fix the cap on SALT will not have my vote.”

The SALT cap has long been a sticking point in congressional debate over extending the expiring parts of the 2017 tax law, which capped the amount of their state and local levies individuals and families could deduct from their federal dues at $10,000.

A handful of House Republicans from high-tax states have made an increase to the cap, which expires absent congressional action along with trillions of dollars in individual rate cuts, a prerequisite for their vote.

Rep. Nick LaLota (R-N.Y.) said in a statement to Bloomberg Tax that the cap in the 2017 law “undercut” the economic gains from the rest of the bill “in districts like mine.” He pointed out his predecessor in his Long Island district, EPA Administrator Lee Zeldin, voted against the law for that reason.

“A $25,000 cap doesn’t go far enough to deliver the relief Long Island’s middle-class families need—and it won’t earn my vote,” LaLota said.

Rep. Tom Kean (R-N.J.) agreed the “proposal falls far short of what New Jersey families need and deserve and it is simply not acceptable,” he posted on X.

“Negotiation and compromise that moves us in the right direction is important, however, this proposal does not do nearly enough to deliver meaningful tax relief to New Jerseyans,” Kean said.

Negotiators led by the White House and Senate Finance Committee Chairman Mike Crapo (R-Idaho) included an increase of the cap to $25,000 for individuals in their draft, according to people familiar with the plan. House Republicans had previously rebuffed proposals to double the cap for married filers and have proposed limits as high as $100,000 for individuals.

Reps. Young Kim (R-Calif.) and Andrew Garbarino (R-N.Y.), two co-chairs of the bipartisan caucus dedicated to raising the cap, also told Punchbowl News Friday that $25,000 for individuals “does not get close to bringing relief to families unfairly burdened by the current cap.”

Lawler, who is considering a bid against New York Gov. Kathy Hochul (D) next year, confirmed to Bloomberg Tax that he texted with House Speaker Mike Johnson (R-La.) and House Ways and Means Chairman Jason Smith (R-Mo.) this week seeking a seat at the negotiating table on the SALT cap and that they agreed. Smith has previously acknowledged the SALT cap would need to be addressed to get to a deal and that all sides would need to compromise.

Lawmakers are trying to fit a suite of new tax cuts into their multitrillion-dollar extension of the 2017 law. The SALT cap is among the most expensive changes to the tax code in contention, with each increase of $10,000 per filer costing hundreds of billions of dollars.