GOP’s SALT Failure Gives Democrats Cudgel in Tight House Races

Blue state House Republicans are on defense over a federal cap on the wildly popular state and local tax deduction—with Democrats gleefully reminding voters how it came to be.

Members of both parties in Democratic-leaning states oppose the GOP 2017 tax law’s $10,000 deduction limit. But Republicans have had control of the House for the past two years, making them vulnerable to attacks from Democrats for failing to change it.

“Everybody wants it to go away,” said Lawrence Levy, executive dean at Hofstra’s National Center for Suburban Studies. “The question is, which party do you trust to do the things they say they’re going to do?”

In a New York district held by Republicans for a decade, incumbent Rep. Nick LaLota’s Democratic challenger has kept issues like SALT and abortion a core part of his message.

“Trump Republicans raise their taxes by taking away their fair share of the state and local tax deductions,” Democrat John Avlon said in an ad from his campaign, referring to a family in his district. “I’ll fight to expand the child tax credit and restore that deduction.”

Republicans from high-tax states like New York, New Jersey, and California held disproportionate power in the GOP-led House this Congress. The party’s slim majority meant just a handful of unhappy lawmakers could jam leadership and grind business to a halt. But efforts by SALT opponents failed.

Now, despite plenty of other hot-button issues on the ballot in November, inaction on the cap is plaguing Republicans defending some districts where nearly half of residents used the deduction in 2016.

Estimated to cost about $1.2 trillion over a decade if the cap is removed, the break faces opposition from progressives who see it as a handout to the rich. It’s also opposed by many Republicans who argue it’s a giveaway to states with high taxes.

GOP Seat Flippers

Individual provisions from the GOP’s 2017 law, including the cap, expire next year, and Democrats argue it’s time for their party to take control to end the limit.

The SALT cap’s inclusion in the 2017 law led a handful of Republicans to vote against it. Many of those members are gone now, but a new slate of GOP lawmakers has tried to ease the limit ever since.

For example, LaLota joined 2022 GOP seat-flippers, including fellow New York Reps. Anthony D’Esposito and Mike Lawler, in a bid this year to get married couples a bigger deduction to alleviate the hit from the SALT cap. That was unsuccessful, but they say they will keep working on a potential fix.

The New York Republican members of the bipartisan SALT Caucus argue that re-electing them and retaining the GOP’s House majority gives them their best shot at resolving the issue next year. And, they argue, that in the last Congress, Democrats couldn’t do much better despite controlling the House, Senate, and White House.

“I’ve worked across the aisle to lower costs, restore our SALT deduction, secure the border, end cashless bail and empower Suffolk cops,” a LaLota ad said.

D’Esposito and his Democratic challenger Laura Gillen took shots at each other over the issue during an October debate where he blamed Democrats in the Senate and White House for stonewalling, while she hit back citing GOP-led House inaction.

Lawler has also run ads touting his bipartisanship with the deduction.

Outside groups have also piled on SALT messaging in some races, airing ads for lawmakers like Rep. Marc Molinaro (R-N.Y.), who narrowly beat challenger Josh Riley in 2022 and faces him again this year.

The National Association of Realtors Congressional Fund is airing an ad in support of Molinaro. “He is leading the effort to restore the state and local property tax deduction,” the ad said.

Senate Majority Leader Chuck Schumer (D-N.Y.) has promised to end the deduction cap if Democrats keep the Senate majority. Former New Yorker and GOP presidential nominee Donald Trump signaled openness to eliminating the cap, despite his party’s objections to the trillion-dollar price tag and his signature on the law capping it.

“People may not feel it on a daily basis,” said former Long Island Democratic Rep. Steve Israel. “But they’re reminded of it as they begin preparing for every tax season, and it irks the hell out of people.”