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GOP Divided Over Reassessing SALT Cap
Rep. Mike Lawler, R-NY, spoke on ‘Sunday Morning Futures’ regarding Donald Trump’s engagement with blue state Republicans about potentially lifting the SALT cap and addressing NYC congestion pricing.
President-elect Donald Trump is granting Republicans the go-ahead to negotiate on an important tax issue, which may be vital for the party’s plans for a significant policy reform in the coming year.
During a weekend gathering at Mar-a-Lago, Trump met with various factions of House Republicans, including those in the House SALT Caucus. This group contests the existing $10,000 cap on state and local tax (SALT) deductions that predominantly impacts urban and suburban inhabitants in states with high income and property taxes, notably New York, New Jersey, and California.
Rep. Nicole Malliotakis, R-N.Y., described the meeting as “productive and successful,” emphasizing that Trump is supportive of efforts to enhance the SALT deduction. She noted that he recognizes the financial burdens placed on taxpayers by mayors and governors in blue states and is keen on providing federal relief.
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President-elect Trump assured New York Republicans of his collaboration on several key issues (Chip Somodevilla/Getty Images)
However, Trump acknowledged the resistance he might face from other GOP members, particularly those representing rural districts, who consider SALT deductions as benefits exclusive to wealthier individuals. Before the implementation of the cap in 2017, taxpayers were entitled to deduct all state income and property taxes from their federal returns without any restrictions.
“He tasked us with developing a set of proposals aimed at offering relief to middle-class families burdened by high state taxes while also building consensus toward achieving a 218-vote majority,” Malliotakis explained.
She continued, “It’s clear there’s little support among Congress or among the general public for completely removing the SALT cap, especially when it comes to providing tax breaks for the wealthy.”
“Our focus remains on targeting middle-class families to strike an appropriate balance,” Malliotakis added.
The $10,000 SALT deduction cap has faced ongoing criticism from lawmakers in New York and California since its introduction in Trump’s Tax Cuts and Jobs Act.
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According to Malliotakis, Trump expressed his intent to collaborate on issues like congestion pricing, which adds fees for driving in certain Manhattan areas (Drew Angerer/Getty Images).
Last September, Trump hinted at potential changes during a second term, posting on Truth Social his intentions to “reinstate the SALT deduction, reduce your taxes, and implement numerous other measures.”
These discussions are part of broader conversations among Republicans aiming to advance a substantial fiscal and conservative reform through a legislative process known as “reconciliation.”
This process simplifies the passage of certain budget-related legislation by allowing it to progress with a simple majority in the Senate rather than the usual two-thirds vote requirement, contingent upon the controlling party holding both congressional chambers and the presidency.
Notably, some pro-SALT Republicans, such as Rep. Mike Lawler, R-N.Y., have indicated they may withdraw their support for the final legislative package if the cap remains unchanged.
“My only firm position is that I cannot back any tax bill if it neglects to raise the SALT cap,” Lawler asserted during his appearance on Fox News.
He also confirmed that Trump concurred that adjustments to the SALT deduction caps are necessary.
Given the slim Republican majority from Trump’s inauguration until likely April, House Republicans have little margin for error.
Rep. Mike Lawler expressed that adjustments to the SALT deduction caps are a crucial criterion for his support of a budget reconciliation proposal (Tierney L. Cross).
In addition to the SALT discussions, Trump assured New York Republicans of his assistance in combatting the congestion pricing initiative, which has been a contentious topic within the state.
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“He recognizes the unfairness of this policy and its potential impact on the city’s economy and the constituents we serve; we are exploring legal avenues to challenge the Biden administration’s approval,” Malliotakis stated. “If there are legal means for him to suspend the congestion pricing, he is willing to act.”
“This pricing scheme affects essential workers such as police, firefighters, and nurses who need to travel during unconventional hours, often opting to drive due to safety concerns regarding the public transit system.”
The congestion pricing implementation began in New York City earlier this month.
Fox News Digital has reached out to the Trump transition team for comments regarding this weekend’s engagement.
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